Your aging parents can no longer live independently, and they will move in with you soon. You know this is going to change your household budget, but have you adjusted it to meet your new expenses? There is a lot involved in caring for aging parents financially, emotionally, and physically. You want to make sure that your finances are where they need to be so that you won't experience unnecessary stress during the transition. The first step is to go over your parents' financial documents and meet with an estate planning attorney who can assist your parents with creating a will. Here are ways to change your budget to accommodate caring for your parents.
Boost Your Emergency Fund
Now that your parents are living with you, it's important to increase your emergency fund. You never know when unexpected medical expenses might happen due to your parents' illnesses. If you're paying down some of their debts, it's another good reason to have adequate emergency savings. Automate your savings so that you won't forget to set aside the extra money.
Utilize Budgeting Apps
Another idea would be to use a budgeting app to assist you in managing yours and your parents' finances. This is a neat way to track your spending and it lets you know the areas where you need to cut back in order to save money. You can also show your parents how to use it so they can access their information in your absence.
Review Your Parents' Health Insurance Plan
You should also review your parents 'health insurance plan. Find out which services and procedures are covered by the insurance provider and which ones you'll have to pay for out-of-pocket. Save as much money as possible to prepare for any medical emergencies. Talk with your parents'physicians about ways to manage your parents' illnesses in a cost-effective yet high-quality way.
Seek Help From Extended Family
Don' t take on this financial responsibility alone. Ask your siblings and other relatives to pitch in financially with caring for your parents. They can help with paying bills, foods for special diets that they must follow, life insurance costs, medications, clothing, and any other expenses that come up. When everyone helps out, it makes the process easier for you.
Consider a Larger Home
Moving to a smaller home generally makes sense if you want to save money and live debt-free. On the other hand, it might be a good idea to save up to move to a larger home in order to accommodate your aging parents. To do this, cook more meals at home and buy fewer unnecessary clothes or gadgets.
Increase Your Income
Maybe your regular job reduced your hours and you may have even experienced a decrease in pay. If you're the primary caregiver of your parents and in this situation, it might be necessary to explore other sources of income. You can even work from home in order to be more available to your parents. Some good work-from-home jobs include online tutoring, virtual assistant, call center representative, and online translator.
Open a Living Trust for Your Aging Parents
Another thing you can do is open a living trust for your aging parents. Leave some of your most significant assets in the trust, and they can use them to pay for household and living expenses should you pass away. You can fund this trust with stocks, bonds, cash, and other kinds of assets such as a car or another home you might have.
In conclusion, when you adjust your budget to accommodate your aging parents' financial needs, things will go smoother and there is less stress for you.
If you need help with estate planning for your aging parents, contact us. We can answer any questions you have and give you the guidance you need.