How to Effectively Handle Your Finances While Caring for Aging Loved Ones
Estimated Read Time: ~9 minutes
Reviewed by: Mark Zagurski, CLU®, ChFC®, CMFC® and CRPC®
Summary: Caring for aging loved ones with compassion while protecting your own well-being and financial stability can be a delicate balancing act. But with smart planning and thought, you can handle this journey with confidence and some peace of mind.
In this article:
- Create a comprehensive financial plan
- Communicate openly with family members
- Get legal and financial authority in place
- Use technology and tools to monitor and organize finances
- Explore public benefits and cost-reduction programs
- Seek professional guidance when needed
- Managing your finances as a family caregiver
- Frequently asked questions (FAQs)
Being a family caregiver is a responsibility many people take on willingly. For many of us, it’s instinctive to want to give back to the people who have enriched our lives with their love and support. While caregiving is often rooted in love, the demands it places on caregivers can be significant. In fact, according to the National Partnership for Women & Families, Americans who provide care to loved ones can be valued at around $1.1 trillion a year in unpaid labor1.
Caring for aging parents can take a toll on you, whether it’s physical, financial or emotional, so it’s important to plan and ensure your own future needs aren’t overlooked. Mark Zagurski, host of the Make it Personal Podcast puts it into perspective, “Caregiving is an act of love — but love without a financial plan can quietly become long-term stress. The goal is to protect your parent without sacrificing your own future.”
Financial planning for caregivers can make a meaningful difference, helping balance your loved one’s needs with your own financial security.
In this comprehensive guide, we’ll explore strategies to help ensure that your financial plan stays strong while allowing you to care for others in your family.
Create a comprehensive financial plan
The first step in effectively handling your finances as a family caregiver is to create a comprehensive financial plan if you don’t have one in place already.
For some people, this may mean assessing the current financial situation of their aging parent or relative first. Understand their income, expenses, savings, investments and any outstanding debts before you begin the financial planning process. Considering both your finances and theirs is essential to managing caregiving and personal finances effectively.
Afterward, determine how the expenses related to caring for your family member, such as medical costs, home modifications, and long-term care services, will be funded. This will help you avoid dipping into your own funds for expenses that your loved one’s retirement savings could have met. Or, if additional funds are needed, you may need to find alternative resources through public and family assistance.
Beyond the basics, your plan should include potential future costs, from short- to long-term. Short-term costs might include prescriptions, meal delivery, or medical co-pays, which are common considerations for a family caregiver. Financial planning for caregivers often involves anticipating these expenses to ensure both caregiving and personal finances remain stable. Mid-term costs for an aging parent or relative could involve respite care or mobility devices. Long-term costs may cover assisted living or home health aides. Writing these out and estimating ranges, even if approximate, can prevent surprises and make it easier to plan savings strategies.
Consulting with a financial professional can be really helpful in this process. A Mutual of Omaha financial professional can assist you in assessing both your and your relative’s financial situation, helping to craft a plan that ensures all needs are met. They can provide insights into managing expenses, maximizing savings, and potentially finding resources or benefits that you may not be aware of.
Communicate openly with family members
Caregiving often involves leaning on a strong support network of family and friends. But each person in this network may have their own ideas and opinions about how to manage finances and care for elderly loved ones.
Open and honest communication is the key to avoiding conflicts and ensuring everyone agrees. Seeding a conversation early, ideally before your loved ones need active care, may help in finding out the exact state of their financial preparedness and preferences. It also helps in defining the roles each family member will play in the caregiving process.
Discuss each person’s responsibilities, expectations and financial contributions to help distribute the caregiving burden evenly among family members. Putting too much financial responsibility on any one party can lead to financial burnout and feelings of discontent within the family in the long run.
It’s helpful when everyone in the family contributes towards the care of your dependent family members in a capacity they are comfortable with. This way, you can have more breathing room to build and/or protect your savings, and take care of your other financial obligations, like your children’s education and your own retirement.
Get legal and financial authority in place
Consulting with legal and financial professionals can provide valuable guidance in navigating complex matters such as estate planning, wills and trusts.
Plus, a time may come when you will be the one to make emergency or family decisions. Therefore, setting up power of attorney and healthcare proxies is advised, so you (or their chosen representative) can make financial and medical choices if they can’t.
It’s also prudent to set up a living will or advance directive that outlines their wishes regarding medical treatment and end-of-life care. Doing so now could save you from stressful, contentious discussions down the line.
These documents also help protect you as the family caregiver. Without proper authority, you may find yourself unable to access bank accounts to pay bills, speak with insurance companies, or authorize urgent medical treatments. This lack of access often leads to delays, added stress, and sometimes, financial penalties. Addressing these matters while your loved one can still express preferences ensures their wishes are respected and your role is legally supported.
Don’t overlook digital assets in today’s world. Many seniors have online accounts for banking, retirement plans, and even social media. Including instructions and permissions for digital access can prevent complications later. Attorneys who specialize in elder law can help ensure both physical and digital matters are accounted for in legal planning.
Use technology and tools to monitor and organize finances
Technology can be a lifesaver for a family caregiver when it comes to managing caregiving expenses. Budgeting apps, a critical tool in today’s digital environment, allow you to link bank accounts, credit cards and bills in one place.
This makes it easier to spot unusual charges or growing debt. Many apps also let you share access with other family members, promoting transparency and collaboration.
Document storage tools can also be helpful. Secure cloud platforms allow you to upload medical records, insurance policies and receipts for easy access when you need them. Having everything organized digitally saves time during emergencies and reduces the risk of losing important paperwork.
Even simple solutions, like setting calendar reminders for bill payments or using spreadsheets to log expenses, can prevent minor oversights from becoming financial headaches. Over time, these tools help you track spending patterns and identify opportunities for cost savings.
Explore public benefits and cost-reduction programs
As a family caregiver, there may be many moments of loneliness where caregiving seems overwhelming. But remember, you’re not on this journey alone. There are various resources² available to help ease any financial burden and to access necessary assistance.
You could start by reviewing your loved one’s health insurance coverage to understand what is included. Look into government programs such as Medicaid or Medicare benefits that your loved one may be eligible for. For instance, Medicaid offers coverage for low-income seniors. For Americans over 60 who don’t qualify for Medicaid, financial help may be available through the Older Americans Act of 1965 or OAA.3
You may also want to consider joining support groups or seeking guidance from local caregiver organizations for valuable insights and assistance.
Do your research on aid programs in your local community and use them. This way, you can minimize out-of-pocket expenses that could eat into your own savings.
Beyond federal programs, many states and counties provide payments for things like transportation and respite care funding, crucial considerations for a family caregiver. Nonprofit organizations often run meal delivery services, home repair assistance or financial aid programs for specific medical conditions. Taking the time to apply for these benefits can make a meaningful difference in your monthly budget. Even a few of these smaller forms of support can add up significantly to reduce your financial burden.
Seek professional guidance when needed
Professional guidance is especially valuable when caregiving overlaps with complex financial or legal matters, a common scenario for a family caregiver. For example, an elder law attorney can explain Medicaid eligibility rules, helping protect assets while still qualifying for benefits.
Financial planners can help you balance saving for your retirement with paying for caregiving expenses. Care managers can assess your situation and connect you with local services you might not discover on your own, crucial for managing caregiving and personal finances.
Even a single consultation can prevent costly missteps. For instance, improperly withdrawing from retirement accounts could increase taxes unnecessarily. Delaying updates to a will could leave assets tied up in probate. Professionals help you make informed choices that protect both your loved one and your own financial future.
As they say, it takes a village. So, seek emotional support from close friends, family or support groups to help ease stress and prevent burnout. Don’t be afraid to ask for help when you need it, whether it’s for a sympathetic ear, practical assistance or advice on caregiving strategies. It’s helpful to be vulnerable with the people we trust, who have our best interests at heart.
Make time for self-care activities, such as exercise and your hobbies. Prioritizing self-care is crucial because maintaining your own health and well-being ensures you can continue to provide the best care for your loved ones. Consider joining a caregiver support group online or within your community to connect with others who are facing similar challenges.
Finally, take advantage of paid care services to give yourself a much-needed break from caregiving responsibilities. The National Family Caregiver Support Program (NFCSP) gives family caregivers temporary relief, by providing access to volunteers or trained professionals who can assist with care, allowing them to recharge and take care of their own needs.
Managing your finances as a family caregiver
Caring for elderly loved ones can be a complex undertaking with significant financial implications. To navigate it smoothly, take the time to build a strong financial plan that accounts for your loved ones’ and your own finances, communicate openly and practice smart savings and investment practices.
Zagurski adds, “If the caregiver’s financial foundation cracks, the whole family feels it. A solid plan protects the person giving the care just as much as the one receiving it.”
As a family caregiver, you’re a vital source of comfort and strength for those you love. Let us help you protect what matters most.
Use our life insurance needs calculator to quickly estimate the coverage that fits your family and caregiving responsibilities.
Frequently asked questions (FAQs)
How can I balance caregiving responsibilities with my own financial obligations?
Create a detailed financial plan that includes both caregiving expenses and personal finances to help you prioritize and allocate resources effectively. Don’t know where to start? Consider working with a financial professional to help you develop a plan.
How can I ensure my elderly loved one receives quality care without overspending?
Consider creating a separate budget specifically for caregiving-related costs, and track your expenses meticulously, including medication, medical supplies, transportation and home modifications. The short-term and long-term impacts of health care costs can be considerable. To help, you can consider programs such as Medicare Part D for prescription drug coverage.
What legal documents do I need to make important financial decisions on behalf of my loved one?
There are multiple legal documents that will grant you the ability the make financial decisions on behalf of a loved one. Consult with a qualified legal professional to ensure you have the necessary documents in place, such as a powers of attorney and guardianship papers, to help navigate financial and healthcare decisions effectively.
Reviewer: Mark Zagurski CLU®, ChFC®, CMFC® and CRPC®
Mark is a director of strategy and communications at Mutual of Omaha. With more than 30 years of experience, he has worked extensively in advisor development, strategy, and communications, focusing on helping advisors and their clients make informed financial decisions. He is also the host of the Mutual of Omaha Advisors podcast, “Make it Personal,” which explores personal finance and strategies to help you take control of your money and future.
Sources:
- National Partnership for Women & Families, If Americans Were Paid for their Caregiving, They would make more than $1.1 trillion, June 2025
- CaringInfo, Caregiving Resources & Links for Support – CaringInfo
- National Council on Aging, The Older Americans Act
Disclosures:
Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc. Mutual of Omaha Advisors is a division of Mutual of Omaha Insurance Company.
Mutual of Omaha and its representatives do not provide tax and/or legal advice, and the information provided herein is general in nature and should not be considered tax and/or legal advice.
Not all Mutual of Omaha agents are registered representatives or financial advisors.
628034_0226
All Categories
Medicare
Retirement Planning
Business Resources
Life Insurance
Financial Planning
Health & Well-Being
Travel & Living