Keep an expense diary and write a budget.
It's not uncommon for your daily expenses to increase when you take on care of a loved one. These costs break down into things you actually pay, money that you might lose in lost time and wages from work or in needing to reduce your own savings to help pay for your loved one's care.
As you take on added responsibilities and costs of care, we recommend you track your care-related expenses in an expense diary. Account for anything you pay for that you might not otherwise cover - include food, clothing, medical costs and housing costs. As you track your expenses, keep receipts. Over time, you will have a record of expenses that will help you adjust your own household budget in order to cover these added costs. Caregiving costs also tend to increase over time, so if you have room in your budget, we recommend you start to put away extra money each month into a dedicated savings account where you can build up funds to draw from for your loved one's care.
Track all your receipts and expenses, both for budgeting purposes and also in case any factor into your annual tax preparation.
Make sure you calculate and track:
- Everyday expenses costs
These include your daily expenses - from transportation, groceries, utilities, housing costs - as well as any monthly, quarterly or annual expenses. Account for anything you pay out-of-pocket for on your loved one's care. As these costs increase, you'll have a better sense of the kind of financial commitment that you'll have to make as a caregiver.
- Opportunity costs
As your caregiving responsibilities increase, so do the demands on your time. Often, this can result in lost time at work, using vacation time for care and, in cases where your care is full-time, possibly having to reduce work hours or leave work altogether. Document these opportunity costs - the potential income that you might miss out on as you increase in your caregiving responsibility. This will help you to determine what your priorities are and what you are willing to and can afford to give up as you increase your caregiving role.
- Non-monetary costs
Caregiving also can be stressful and wear on your own physical and mental health. The sacrifices you make as a caregiver may result in your needing to give up things you enjoy - which can affect your well-being. Plan ahead for time off, counseling and support and other things you will need to do in order to balance your own life and well-being with your loved one's.