Discover what this financial professional learned when she became a caregiver for a family member
Posted in , Oct 12, 2018
I have been riding the ups and downs of caregiving for the past four years. Because my work involves helping people with financial issues, you might think that managing the financial aspects of caregiving would be easy for me. It is definitely not easy! As I’ve taken on this role in my family, though, I have learned some important things.
I am the Director of Financial Counseling at Empowering and Strengthening Ohio’s People (ESOP), a subsidiary of the Benjamin Rose Institute on Aging in Cleveland, Ohio. ESOP is a non-profit Housing and Urban Development (HUD)-approved housing and financial counseling agency. It is our mission to help adults in all stages of life achieve and maintain financial wellness and housing stability. My work life is about helping others learn how to navigate complex financial issues, ranging from powers of attorney to reducing debt and repairing credit. Even with that professional experience, I have been overwhelmed by taking on the role of both caregiver and financial coordinator for my own family.
Let me give you a glimpse of what that looks like. I have notes on my computer, stuck to my bathroom mirror, in my phone and on my calendar to remind myself to pay bills online, mail the mortgage check, schedule a doctor’s appointment, help my daughter with her financial aid for school, order new medical supplies and the list goes on. I cannot tell you the number of times I have driven around with bill payments in the visor of my car ready to be sent, and yet I still forgot to mail them out.
After about two and a half years of acting as a caregiver, I realized that I was exhausted and almost every area of my life was in disarray. I could not do it all, and I needed to ask for help! I saw that I needed to take care of myself, to get things back in balance. I had to pause and take a look at my mental, physical and spiritual wellbeing.
I’m not alone.
More than 66 percent of family caregivers are women, according to the Family Caregiver Alliance, and, according to several studies, the average female caregiver loses more than $324,000 during their lifetime in wages, pensions and Social Security benefits, due to their caregiving responsibilities ("The MetLife Study of Caregiving Costs to Working Caregivers," 2001).
In addition to the financial challenges that many caregivers face, the financial aspects of caring for someone else may raise issues that are just not familiar, even if you’ve had experience with finances like I have.
There are two different types of financial caregivers. The first is a caregiver who also provides financial support and contribution for their loved one. The average out-of-pocket expenses a caregiver pays on behalf of their loved one is $7,000 per year. (According to “Family Financial Caregiving: Rewards, Stresses and Responsibilities,": AARP, 2015. ) According to a Merrill Lynch study, 68 percent of caregivers report that they are financial contributors.
The second type of financial caregiver is the financial coordinator. This person manages the hands-on financial activities of paying bills, dealing with insurance, managing assets and investments, filing taxes and monitoring accounts. According to the same Merrill Lynch study, 88 percent of caregivers handle financial coordination tasks, and 64 percent of caregivers report that they are providing both financial coordination and financial support for the person receiving care.
If you find yourself taking on new financial responsibilities, either as a financial coordinator or the person providing financial support, these practical tips can help make your tasks a bit easier.
1. Talk to your family
Open communication with family members, including parents and children, about finances and legal topics is very important. Many non-profits, including mine, offer resources for talking to your family about money.
2. Create a budget
You’ve probably heard this before. It will help you and your family even if you’re not caring for someone, but building a plan can keep loved ones from being a burden should they require caregiving. It can also help you, as you step into a caregiving role, learn about upcoming expenses and regular bills that need to be paid so that you are not surprised by unexpected costs.
3. Plan and organize important documents
Understand which financial and legal documents are needed for your situation, then ensure those files are organized and easily accessible. These are some of the documents to consider discussing with an attorney, a financial counselor at a HUD-approved financial counseling agency or other trusted person:
· Durable Power of Attorney for Finances
· Health Care Power of Attorney or Health Care Proxy
· Do Not Resuscitate (DNR) Order
· Living Trust
· Last Will and Testament
· Living Will
Caregiving is demanding, but having your family’s financial health in order goes a long way in supporting the overall health of your loved one and yourself.