Becoming a long-term caregiver for a family member or friend is never an easy task. Not only might you have to step away from your own life and profession, but you are starting a job that doesn’t have regular hours. You may be called to help your loved one both day and night, depending on how their condition progresses.
Burn-out concerns aside, there is a huge financial aspect to becoming a long-term caregiver. Keep reading to learn how you can better financially plan when caring for a loved one, and some tips and tricks for preserving both of your financial futures.
Step 1: How Much Will Caregiving Cost?
Although step one is to estimate how much it will cost you to care for your family member, it is important to note that you may not know exactly how long you will have to be in a caregiver role. Sometimes, those with only a few months left live for several years, and vice versa. Therefore, we recommend making estimates based on the following.
- Are you leaving work entirely or just scaling back to part time?
- Can you return to your job when your caregiving is finished?
- Does your offer to return ever expire?
- How will you continue to contribute to your own retirement?
- How much of your own money will you put toward caregiving (gas to drive them around, food for yourself while at their home etc)
- How will your bills be paid if you are no longer working?
All of these questions should be carefully considered prior to becoming a caregiver. Many individuals are taking to the legal side of things, turning their caregiving into a legally established contract job, to ensure they can go back to their old job post-care, or receive some sort of compensation for their work (even if it is just having bills covered.)
**It is important to note that we recommend exhausting all other options before leaving your job completely. This is because you give up far more than pay when you stop working. For example, when you leave a job, you stop contributing to your pension, lose years of service toward certifications, and you likely also lose your own health insurance.
Step 2: How Will You Survive as an Unpaid Caregiver?
We understand, it’s your family we are talking about here. And just because you can make it into a legal agreement doesn’t mean you should. But you do need to make sure you can survive financially while you devote your life to someone else’s. Below are some ideas to make caregiving cost effective for all involved.
- Moving in with the family member you are taking care of–so you don’t have home bills of your own.
- Selling the cars of members of the family you are caring for (and just using yours when needed.) Chances are, if they need a caretaker, they shouldn’t be driving anyway.
- Budgeting their income (social security, pension) carefully to ensure there is enough to continue a house payment and cover the costs of food for both of you. Consider meal planning.
- Investigate local social programs that could help with some of the costs (such as charities or churches). There are also government programs that can help alleviate some costs.
- Ensure they have medical insurance. From this point forward their care will only grow more expensive, so be sure they have Medicare or a private health plan.
Whether you decide to do all or none of the above, we want to reiterate that you should not be touching your personal savings. While you have agreed to care for your loved one free of charge, they should be at least able to cover your living costs while you help. If this is not the case, it may be better to keep your job and apply for government help because, otherwise, you might find yourself in financial ruin in a few years.
Step 3: Pay Off Debts Before Becoming a Caregiver
While everything above may make caregiving a solution for you–especially if you can live with your aging family member, it is critical to pay off debts before leaving your job. This is because interest compounds, and planning to spend several years performing unpaid labor will only create your financial issues before becoming a caregiver.
Step 4: Discuss Inheritance Before Starting
It can feel wrong to discuss inheritance while your family member is still alive, but if you are quitting your job to take care of them, then this is an absolute must.
Even if your family has no money to leave you, where is their house going when they pass? What about any of their remaining retirement? If you are moving in to take care of them in your final years, then you should probably get their house when they die–you would be surprised at how few people think of this–leaving their caregivers homeless and without a job when they pass.
Regardless, we recommend writing up an official will before you begin full-time caregiving. This will ensure there are no misconceptions when it comes to your payment for giving up your life for your loved one–even if it isn’t monetary in value.
Step 5: See If You Can Get Paid
In the United States, the government does recognize the value of caregiver unpaid labor. While it isn’t as much as we would hope, there are ways to be paid from Medicaid for the labor you provide for your family member.
Your family doctor will need to prescribe your care to your family member, and in some states you may even need to take a training course to become a caregiver. Either way, it is always worth pursuing if it can help you even a little bit financially.
Even if you don’t qualify professionally as a caregiver, there are Medicaid programs which allow for cost-covered adult daycare for your loved one. While this won’t completely eliminate your workload, it may be enough to allow you to work part time while also caring for your loved one in their final years.
If your loved one is a veteran, you may even receive additional benefits from the Department of Veterans Affairs. Not only do they offer options for hiring/paying an in-home caregiver, but they also have several aid options that can help your family member remain partially independent for longer.
Overall, leaving your job to care for a family member can torpedo your life financially. Therefore, you need to take steps to ensure you can continue to pay your bills, and yourself, even when your family member no longer needs you.
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