The Financial Impact of Being a Caregiver

Photo of money removed from wallet
Photo by Allef Vinicius on Unsplash

[By Maria Sandella]

Being a caregiver is more than just cooking a meal or two. You are essentially taking over not only their personal care, but often times their financial care as well. So it is important before you make such a big decision that you are ready for the financial impact it may have on your family.

In the United States there are over 22 million households that are providing care to a friend or relative over the age of 50. Forty percent of those caregivers are still raising their own children while sixty-four percent also work out of the home, either full or part time.

The costs of caregiving have a financial impact on the family. If the person you are caring for requires a high level of care, you may find yourself in the position of having to change your work status from full-time to part-time. The same for promotions, now that you are a caregiver, that promotion you had been waiting for requiring you to work longer hours is no longer an option; and any type of business where you would have to travel is also out of the question.

Another financial hardship of becoming a caregiver is the lost opportunities for compound returns on your 401K. You may find you have to dip into your savings or use your investments in order to supplement for lost income and with the decrease in your monthly income there is no money left for any kind of home improvements that could increase its resale value.

One study showed that an average a caregiver loses over a lifetime due to both reduced salary and retirement benefits is $659,130.

While being a caregiver to a friend or family member is a rewarding experience it is not for everyone. The loss of income may have you resenting the person you are caring for which may have an impact in the quality of care you provide, intentional or not. So before you agree to take on the role of personal caregiver it is important that you consider all the pros and cons and determine if it is something you can commit to, both mentally and financially. There are also government programs available that can help. The person you are caring for may be eligible to receive Medicare, which would eliminate their healthcare expense and drug costs which is the biggest expense a caregiver has.

Sit down with your spouse and make a household budget worksheet. Have 2 columns, 1 for your fixed expenses such as mortgage, food, bills, healthcare, and any other required monthly payments and the other column for flexible expenses which are items where the monthly budget can fluctuate, such as clothing, eating out, personal care items and any other miscellaneous purchases. Once the budget has been worked out you may realize that becoming a caregiver won’t be as much of a financial burden as you originally thought.

Family should take care of family and being a caregiver is worth the few sacrifices you may have to make in order to do it.

About the Author

Maria Sandella was the primary caregiver for her grandmother for 2 years until her passing. She also worked summers in a long-term care facility while attending college. She now works as an Application Specialist for Intercoms Online, which provides wireless intercom systems that caregivers use for communications with the elderly and disabled. For more information about a caregiver wireless intercom go to http://www.IntercomsOnline.com. Also read their article titled: Wireless Intercom for Elderly or Disabled.

Article Source:  The Financial Impact of Being a Caregiver

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