How Caregiving Can
Impact Your Finances

Issues to Consider

How their finances might impact yours.

Not much is more important than your Finances. But what is your parents’ financial situation? How much do they have and how much do they need? Is there enough? If there is plenty of money, knowing is less important (but knowing where their important documents and telephone numbers is).

If you’re unsure, or think they will come up short, their situation can impact yours. (A recent study shows that caregivers pay an estimated $5,531/yr. out of pocket for caregiving.)

Do you need to plan for this possibility? If Mom can’t afford to hire a caregiver, will you have to foot the bill (and can you) or chip in for prescription drugs, adult day care, help, home modifications or long-term care?

Find the right approach.

Getting that financial information from Mom or Dad may be tricky. Money can be emotional and in our culture, talking about it can feel unnatural and even crass.

There are other reasons why your parent may be reluctant to share their finances: they may be nervous about running out of money (justified or not), embarrassed that they don’t have more or aren’t doing a good job of managing it, unhappy that your inheritance may be reduced because of them, believe they are giving up control or think you just want to know how much you are going to inherit.

Explain that you are not being nosy, but rather, responsible. If they say, “don’t worry, there’s plenty of money,” let them know that’s great, but you still need to know for their planning purposes and yours. You might need to tell them you are worried for them and for you, and you must have peace of mind.

If they won’t budge, urge them to consult a financial advisor (that’s helpful regardless). And, an elder care lawyer will tell you what documents they need or help update the ones they have. Ask your parents to tell you where they keep important information, including their recent tax returns, bank, investment and other statements, and a list of their service providers.

How caregiving can impact your work.

Think whether caregiving will affect your job. Will you need to cut back on work, turn down assignments or a promotion or quit altogether? That will impact your earning power, from reduced Social Security benefits and a smaller pension (if you’re lucky enough to have one) to health insurance to savings and investments.

Understanding a durable power of attorney.

If your parents are unable to take care of their finances, someone will have to step in. That person needs a document called a durable financial power of attorney to have access to their bank accounts, write checks on their behalf, and manage their money. Many states have their own forms or you can get one on the Internet (Google “durable power of attorney form.”) They need to be stamped by a notary. Even if your parent is in tip-top shape, having a power of attorney designee and document is critical in the event of an accident or illness. It is part of responsible estate planning.

Tapping siblings for help.

Your parents’ finances call for a family talk with sibling participation, if possible. Does one sibling have far more money than the rest? Might she be willing to pay for help, or a higher percentage, if it‘s too much of a burden to the others? You can contribute in other, non-monetary ways (i.e. your time, coordinating care).

Be aware.

Also, be aware that money issues (not paying bills, uncharacteristic or unexplained spending, paying bills more than once, struggling to understand cash transactions) can be signs of cognitive decline.