Caregiving is a meaningful way to support loved ones in need, but it comes with physical, emotional and financial demands. As a caregiver, don’t forget to take care of yourself—and your finances.
Caregiving is a selfless act, but finding the right balance between caregiving and your personal well-being is essential. It may seem counterintuitive to think of yourself first when others are your focus, but it takes the “best you” to offer the best help to your loved ones.
That starts with getting your house in order, physically, emotionally and financially. While there is no single formula for combatting caregiving fatigue, there are several steps that can help you care for yourself—and your wallet.
The majority of caregivers (78%) say they incur out-of-pocket expenses as a result of caregiving and, on average, are spending one quarter of their income on caregiving activities.1 This kind of spending can have a significant impact on your long-term financial security. To help safeguard your financial well-being, it helps to have a plan in place.
Align Financial Resources
Money conversations can be tricky, but as you take on caregiving responsibilities, it’s important to be open and honest. Take stock of the financial resources of the loved one in your care as well as the financial support your family can offer. Research which services are provided through your loved one’s medical insurance. Taking the time to identify and align financial resources will give you a full view of what is available and which remaining expenses you may need to cover.
Build a Budget—or Two
Consider creating two budgets—one for you and one for your loved one—based on your individual finances and expenses. Plan ahead for known expenditures and earmark funds to cover. Having a clear view of how care-related costs will affect your respective budgets can help you allocate accordingly.
Don’t Neglect Saving and Investing
Nearly half of caregivers (47%) have experienced at least one financial setback, including tapping into their personal savings, having to decrease personal spending and reducing contributions to retirement savings and investment accounts.1
It’s common to focus on immediate needs, but don’t lose sight of your long-term goals. Remember that when it comes to saving and investing, time really is money, thanks to the power of compound interest. Make saving a priority. Build an emergency fund for unanticipated costs that may arise, keeping in mind that even small contributions add up over time. Also, aim to make regular contributions to your retirement savings account, taking advantage of any tax benefits and employer contributions it may offer. A Financial Advisor can help you prioritize and create a plan that aligns with your goals.
Look Into Favorable Tax Options
Caregivers often qualify for federal tax credits and deductions. The Internal Revenue Service (IRS) allows you to claim some individuals as dependents on your federal tax return, as long as they meet certain requirements, such as depending on you for the majority of their essential expenses or living with you for the full tax year.2
Some out-of-pocket caregiving expenses may be deductible as well—for example, unreimbursed medical expenses and a portion of other expenses not covered by insurance. A tax advisor can walk you through eligibility requirements and other considerations.
As a caregiver, you may feel like the weight of the world is on your shoulders, but remember, you are not alone. Take a team approach to caregiving and outline your plans together.
Set Realistic Expectations
Determine how much time you can realistically commit to caregiving. If you are the chief caregiver, get others in the family involved with care. Make sure close relatives understand how much you’ve taken on and find out what level of assistance they can provide. Know your limitations; designate or outsource tasks to free up your time and mental energy.
Call in Professional Help
There are professionals, including social workers and care advisors, to help you navigate the complexities of providing care, inform you of your options, and connect you with resources. If applicable, you might also consider hiring a geriatric care manager who is trained in social work, nursing and psychology.
Lean On Your Community
There are many community-based resources and federal programs available to caregivers. You can look into organizations like the Caregiver Action Network, a non-profit organization that helps build confidence and capabilities by offering practical help, education and peer support for family caregivers.3
There are also government-subsidized programs available to help caregivers shoulder out-of-pocket expenses not covered by insurance. Learn about services that may be available to you through The National Family Caregiver Support Program, which assists family caregivers with individual counseling, support groups, respite care, training and more.4
Prioritize Your Own Well-being
For many, becoming a caregiver wasn’t a part of the long-term plan, but now it is a reality. The role comes with a lot of responsibility, so it’s only natural to feel overwhelmed. This is especially true for women, who account for upwards of 75% of all caregivers.5 The Family Caregiving Alliance found that women caregivers report higher levels of depression and anxiety, and lower levels of life satisfaction, than their male caregiver counterparts.3 The emotional and physical stress of caregiving can also have a direct impact on your physical health.
Find Ways to Relieve Stress
To sufficiently care for others, you must take care of yourself. Schedule time to refresh and recharge, whether that’s by reading, going outdoors or spending time with friends. Even taking small breaks throughout the day can have a positive effect on your well-being. You should never feel guilty about taking care of yourself.
The demands of caregiving extend far beyond the day-to-day activities of supporting your loved one. It’s essential to prioritize your overall well-being, which includes your financial fitness and physical and mental health. Remember, providing care for others requires the best you you can be.