The financial impact of family caregiving is a growing concern for many families. As the population in the US ages, the number of people who rely on family caregivers to provide support and care for their aging loved ones grows.
Unfortunately, this often comes at a great cost to the caregiver. In addition to the emotional and physical tolls of caregiving, there are also heavy monetary costs associated with providing care for a loved one.
The Financial Effects of Caregiving
Caregiving can have both positive and negative effects on a family’s finances. On the positive side, providing care for an aging parent or other loved one can be rewarding in terms of time spent together and a better quality of life.
On the other hand, there are financial costs associated with providing supportive care. These costs can include lost income due to time away from work, additional expenses related to medical care and supplies, and even personal expenses such as food and clothing that may be used to support the person being cared for.
Examples of Caregiver Expenses
One of the most common expenses incurred by caregivers is lost wages due to time away from work. This is especially concerning if the caregiver is employed full-time or works multiple jobs. Caregivers may incur expenses related to medical care or supplies needed for their loved ones.
Common expenses include prescription medications, over-the-counter medications, medical equipment such as wheelchairs, walkers, or grab bars, and even extensive home modifications such as ramps or stair lifts. Caregivers may also incur personal expenses such as food or adaptive clothing that may be used to support their loved one’s needs.
Tips for Managing Caregiver Expenses
Some expenses are inevitable when managing the care and support of an aging parent. However, with a little planning and thinking ahead, some expenses can be alleviated or eliminated altogether.
Tips for managing caregiver expenses include the following:
- Develop a realistic budget for your caregiving costs. Include all potential expenses and changes to your resources like reduced income due to time away from work, expenses related to medical care and supplies, and personal expenses such as food and clothing.
- Talk to your employer about flexible work schedules or reduced hours that will allow you to balance your caregiving responsibilities with your work responsibilities.
- Talk to other family members about sharing the responsibilities of caregiving. If other family members are available to help, you may be able to reduce some of the financial burden associated with being a family caregiver.
- Talk to your doctor about potential assistance programs that may be available to you. Many states have programs offering financial assistance to caregivers who are caring for loved ones who are disabled or elderly.
- Seek out community resources that may be helpful to you. Community resources may include support and advocacy groups that may be able to offer you financial assistance or counseling related to caregiving.
- Talk to a financial professional about your situation and about the financial options that are resources to you as a caregiver. A financial professional can help you manage your caregiving costs and develop a strategy that can help you meet the financial needs of you and your loved one.
- For more information on caregiver expenses, visit the Consumer Financial Protection Bureau’s website.
Disadvantages of Being a Caregiver
In addition to the financial burden, there are also other disadvantages that come along with being a caregiver. Many caregivers experience physical and emotional exhaustion due to the demands placed on them by their loved one’s needs.
Caregivers may experience social isolation due to spending so much time caring for their loved one instead of engaging in activities outside of the home.
Long-term caregiving can have a negative impact on career opportunities due to gaps in employment history caused by taking time off work to provide care for a loved one. Caregiver burnout is common and includes the following signs to watch for.
- Not eating/ sleeping
- Mood swings
Caregiver Financial Impact
One of the biggest challenges faced by caregivers is managing their own financial resources while caring for a loved one. This is difficult if the caregiver is already living on a budget or has limited access to financial resources.
Many caregivers struggle with balancing their own needs with those they are caring for, which can lead to feelings of guilt or frustration. Some caregivers find it difficult to ask for help when needed, which can further increase their caregiving burden.
5 Ways to Manage the Financial Impact of Caregiving:
- Ask for Help: Just as caregivers need to ask for help when they feel overwhelmed by their loved one’s care needs, they also need to ask for help and support from others throughout the caregiving process. This could include asking for the assistance of other family members or friends to help with caregiving responsibilities, asking for financial assistance for care-related expenses such as medical equipment or home modifications, and asking for assistance with tasks such as meal preparation or transportation.
- Stay Organized: Caregivers who stay organized can better manage their time and finances and reduce stress related to caregiving responsibilities. For example, caregivers can write out a schedule for each day that includes specific caregiving tasks and reminders for important appointments and errands. Caregivers can also keep a calendar of family events and important dates such as birthdays and anniversaries to help them plan activities outside of the home.
- Set Limits: Caregivers who set limits for themselves and their loved ones can better manage their own time and finances and avoid becoming overwhelmed with caregiving responsibilities. For example, caregivers can establish a care schedule that limits the amount of time they spend helping with daily activities such as bathing and dressing. Caregivers can also set limits on the amount of time and money they spend on care-related expenses.
- Budgeting: Caregivers who are on a budget can better manage their family finances and avoid becoming overwhelmed due to unexpected expenses associated with caregiving responsibilities. Caregivers should keep track of how much money they spend on care-related expenses such as prescription medications, medical equipment, groceries, and clothing that they may use to support their loved one’s needs.
- Plan for Future Needs: Think about the care a loved one currently needs- what does that look like in six months? A year? As needs increase, the cost of care will too. Even though it may not be necessary now, look into the cost of hiring in-home care, respite care, and senior housing like assisted living.
According to AARP, there are currently over 40 million unpaid family caregivers in the United States who provide an estimated $470 billion worth of unpaid services each year. These unpaid family caregivers are often women juggling multiple responsibilities such as caring for children in addition to providing care for an aging parent or other relatives.
Unpaid family caregivers often face financial hardship due to lost wages and increased personal expenses associated with providing long-term care for a loved one.
Resources to Offset the Cost of Caregiving
There are a number of resources to help alleviate some of the costs associated with providing care for a loved one. These resources will differ from state to state, a great place to start is your local Area Agency on Aging.
- Medicaid/Medicare: While these two programs are very different in terms of what services they cover and who can benefit, it’s important to understand Medicaid vs Medicare and what is available for you and your loved one. Some states offer a Medicaid waiver program that provides financial assistance to families caring for an elderly or disabled family member.
- The Family and Medical Leave Act (FMLA): This federal law provides eligible employees with up to 12 weeks of unpaid leave per year to care for a family member with a serious health condition. Oregon and about a dozen other states currently offer (or will offer this year) a Paid Leave Program as of the date of this writing.
- The Veterans Affairs (VA) Aid and Attendance Program: The VA provides financial assistance to veterans and their families to help cover the cost of in-home care and supportive senior housing.
- Tax deductions and credits: Family caregivers may be eligible for tax deductions and credits to help offset the cost of caregiving.
- Non-profits and charities: Some non-profits and charities offer financial assistance or other resources for family caregivers, such as support groups and counseling services.
- Help with the cost of incontinence supplies: Diaper banks, the Salvation Army, local charities, and Medicaid benefits are all resources to explore if you are looking to lower the bill for incontinence supplies. Some companies even send free incontinence brief samples to help customers figure out proper sizing.
The financial impact of family caregiving is an important issue that should not be overlooked when discussing long-term care options for older adults and their families. While providing care for an aging parent or another relative can be rewarding in terms of quality time spent together and improved quality of life, it also comes at a great cost both emotionally and financially.
It is important that family caregivers understand the potential financial impacts associated with providing care so they can make informed decisions about how best to manage their resources while still providing quality care for their loved ones.
Amie Clark, BSW
Aging Advocate and Senior Care Expert
Amie has worked with older adults and their families for the past twenty-plus years of her career. Her senior care knowledge is based on her experience as a social worker, family caregiver, and senior care consultant. Learn more about Amie here.