When it comes to helping aging parents or an elderly relative, you’ll soon realize that your responsible for a lot more than just their personal health.
Being the primary caregiver means that you’ll have to take care of their lives in general, including everything from regular outings, social gatherings and doctor visits to their finances.
Helping them handle their finances will usually be one of your more pressing concerns, whether you’re comfortable with being responsible for their money or not. When you think about it, in an ideal world there would be very little that you have to do and you wouldn’t need to spend much time on it your parents would have an unlimited accumulation of wealth. However, in reality that is rarely the case and you’ll need to sit down and put together a budget for them. Setting up a budget will allow you to have enough money to pay all of their bills, miscellaneous expenses, and also have money set aside for a rainy day (and for savings).
A Budget will also enable you to be on top to due dates for all upcoming bills. Utility companies are extremely notoriously and unsympathetic if bills are not paid on time, so be very thorough when you begin budgeting from the very first day. You don’t want your loved one to have their electricity/water or heat cut because of a late payment
Here are a few simple steps you can follow to help make this process a lot easier for the both of you:
- Before you start putting together a budget for your elderly loved one, you’ll need to figure out exactly where they stand with their finances. Now, you can do this by getting organized and setting up a spreadsheet or even just having a designated notebook to keep track of their income and expenses etc. on a weekly basis.
- Write out all the different accounts they have, then create a list of all their income and expenses for the past 12 month. Make sure to be as accurate as possible, look at all of the household bills & any outstanding debts. By doing this you will get a better idea of where they stand with their finances.
- You’ll want to take into account any income from pension plans, social security, 401K or any other income sources, also you should take the previous years’ expenses as a good indicator of what you can expect to pay out in the coming year. You’ll also have a better idea of the amount of money they will have left over for miscellaneous expenses and savings. Income is very important when it comes to budgeting.
- Do your due diligence and research all of your elder’s income sources including any lines of credit, this will ensure that their past income level will remain the same for the foreseeable future. If you fail to prepare and research, you might find yourself in a financial mess!
As mentioned earlier, when helping aging parents it is very important to set aside some money each month to put into a rainy day savings fund on behalf of the aging parent/relative. The future is always unknown so it is best to be prepared for any situation that may arise both good and bad. However, if your elder needs special care or treatment and has to pay out of pocket for it, you may find yourself in a very tough financial situation. Seniors often have to sell their homes or assets in order to get the medical care needed. Medical care can be in the form of home help, medication, surgery, therapy etc. That’s why it’s best to avoid those unexpected situations by preparing your aging parent/relative financially for every eventuality.
As a primary caregiver, budgeting on behalf of your elderly loved one may prove to be tough, especially if you are striving to handle all of their other needs as well. However, it is very necessary to give them a helping hand, they may not be able to live out their golden years peacefully otherwise. For many people helping aging parents or relatives can be overwhelming at times, but it does prove to be rewarding. Being able to care for the person/s that once cared for you is a blessing in itself.
We hope that this blog post was helpful to you, be sure to leave us your questions or comments below!