Being A Caregiver Can Be CostlyPosted on November 14, 2014 by ElderCare Resources in Blog, Caregiver Education, Caregiving, Education, Financial Services, Senior Living
The financial cost of being a caregiver
By: Katie Gilstrap
Family caregivers are not only helping their loved ones with the everyday activities of living, but studies show they are also helping them financially. The impact of this financial sacrifice is significant. There is a correlation between the expenses covered for a loved one and the stress and overall toll on those providing the support.
Consider the following findings:
- The most common expenses that caregivers cover are household goods and food, followed by transportation and medical-related costs.
- The money used for financially supporting a loved one typically comes from cutting back on leisure activities, minimizing vacations, reducing retirement savings and putting off major purchases and repairs.
- Caregivers often sacrifice their income by cutting back on hours at work or quitting their jobs altogether. The impact of these changes goes beyond the loss of immediate income by also affecting retirement income and health insurance.
- Caregivers who continue to work full-time use vacation time and sick days to provide care. It is not uncommon to have to take an unpaid leave of absence to be a caregiver.
- Long-distance caregivers bear the biggest financial burden. Travel-related expenses have a significant impact on a caregiver’s bottom line.
- Besides the emotional and physical effects of being a caregiver, these individuals also have higher out-of-pocket expenses. Small expenses — a prepared meal or hiring someone to help out during a personal appointment — can take a bite out of the budget.
If you are a caregiver, consider keeping a log for 30 days to track your expenses. Make sure to separate what you spend on your loved one and what you spend on the rest of your household.
To calculate what you are spending on your loved one, ask yourself, “Would I be incurring this expense if I were not a caregiver?” Not only will this exercise help you get a clearer picture of the impact on your financial situation, it also will help during tax time.
Some expenses are tax deductible or qualify for tax credits, so keeping track can really pay off when you talk with your accountant.