Thanks to the COVID-19 crisis, many have suddenly found themselves thrust into the role of caregiver. If you are one of them, you know the emotional and physical drain being a caregiver can be. But, when it comes to caring for a loved one, we usually find the inner strength to face the challenges. However, one thing that many first-time caregivers overlook is the strain it can have on their personal finances.
Here are some tips on how to protect your financial future while you are a caregiver, provided by Edward Jones Investments.
Evaluate your employment options
If you have to take time away from work or leave employment altogether, you will lose income. You will also lose the opportunity to contribute to an IRA, 401(k), or other employer-sponsored retirement plans. But you may have some options. You can work remotely, or at least work part-time. Either arrangement can give you flexibility in juggling your employment with your caregiving responsibilities.
Explore payment possibilities for caregiving
Depending on your circumstances, and those of the loved ones for whom you’re providing care, you might be able to work out an arrangement in which you can get paid for your services. Even if you are a blood relative, if the person you are caring for happens to have long-term care insurance, his or her policy may pay a standard hourly fee for up to a certain number of hours a day.
Protect your financial interests – and those of your loved ones
You may well want to discuss legal matters with the individual for whom you are a caregiver. You should do this before their condition robs them of the ability to make their own sound financial decisions. This is especially true if you are caring for a loved one suffering from Alzheimer’s or some form of dementia. You may want to establish a power of attorney. This document allows you to make financial decisions and pay bills for any person who no longer can. And whether you or someone else holds the power of attorney, the very existence of this document can help you avoid getting your personal finances entangled with those of the individual for whom you’re caring.
Keep making the right financial moves
As long as you’re successful at keeping your own finances separate from those of your loved one, you may be able to continue making the financial moves that can help you make progress toward your own goals. Of course, it is easier to keep your own personal financial goals on track if you can still earn some kind of income, even if you are a full-time caregiver.
Have you or anyone you know had to give up your job to be a caregiver? How did you lessen the impact on your personal finances?