One of the biggest challenges and breakdowns in families is the handling and utilization of money. Let’s face it, we all have different ways in which we spend it, earn it, and value it, and the average American has no clue or comprehension of the cost of later life care.
In families, it’s often one sibling that is responsible for the care of a loved one. That individual is faced with decisions each and every day about little things that effect spending overall.
Bear in mind:
- Most of us are not independently wealthy.
- We don’t have unlimited funds to draw from.
- We are often times emotional in spending due to a stressful life.
- Families are often conflicted when it comes to money and how it is spent.
Being the front-line Family Caregiver has its own set of challenges when it comes to money.
According to the National Alliance on Caregiving, studies show that Family Caregivers experience a 40% job loss as a result of their caregiving. According to the Family Caregiver Alliance, they are 2.5 times more likely to live in poverty. As profound as these statistics are, families still argue and have conflicts about finances, even according U.S. Administration on Aging, most older adults with long term care needs — 65% — rely on a family member or friend exclusively to provide care and assistance.
So what gives? How do we deal with it?
Let’s face it — money management and caregiving is like oil and water. There is nothing that produces more polarizing perspectives than how it’s handled, and it truly doesn’t mesh well together.
As the Family Caregiver, you may be constantly putting out your own funds to care for a loved one. These expenses may be as low as buying grocery items at the store, a tank of gas, time off work without pay or they could be higher. There are many things that Medicare and a fixed income for a senior cannot pay for. That includes things like hearing aids, home modifications, or ongoing expenses like maintenance or home repairs.
For the non-caregiver family member, they do not live the day-to-day life with a loved one. They do not relate to all of the little (and big) expenses that go on from day to day.
The National Alliance on Caregiving says that the average Family Caregiver spends close to $5,500 per year on direct caregiving expenses. Thus, it can be a financial burden to you, and to your family, they may not recognize all the outlay of costs that can create an added stress to you in your caregiving years.
Here are some tips on helping you make it easier:
- Set up a separate Caregiving Account and give your family online access to view it. Be transparent in how money is received and spent. Keep all receipts.
- Work together as a family to contribute to the overall costs if necessary. A Caregiver should not bear these costs alone.
- Prepay and plan your loved one’s final funeral expenses. Not only does it save money, but it also will eliminate family conflicts upon your loved ones’ death.
- If your aging loved one lives with you, check with your tax professional. You may likely be able to claim them as a dependent.
- Schedule regular family conference calls to keep family members on the same page and engaged in the ongoing financial needs of Caregiving.
- Discuss with your family members on ways they can participate. If they cannot contribute financially, perhaps they can be responsible for home maintenance, cleaning, meal preparation, or taking Mom or Dad to a doctor appointment so you don’t have to take off work.
In conclusion, we know that every family’s financial situation is different. We also know that even though families are optimistic about a loved ones’ ability to finance their own long-term care, things can happen. 43% of seniors today are outliving their money and need to qualify for Medicaid to take them through the rest of their lives. Because there is a 5-year look-back into a senior’s finances to qualify for Medicaid, The State of Washington pays extra scrutiny toward financial transactions that occur from your aging parent to their loved ones. That means any loans, payments, gifts or financial transactions to them that are not verified for their own purpose can be red-flagged and must be paid back before Medicaid funding can be accessed.
Having full transparency, also means keeping all receipts and documentation. Taking these extra steps may be an effort now, however it will mean a great sense of relief in the future.
(Lead image © Can Stock Photo/yongtick)
