Ideally, your loved one will go over their financial affairs with you and show you how to find all the documents you’ll need. It’s common, though, for a caregiver to have to do some detective work, sifting through mail, files and so on. The important thing is that you gather every document you can find that might have an impact on your loved one’s finances.
You’ll want to get a clear picture of what your loved one has—income, assets and insurance. So you need to look for documents such as tax returns, bank and brokerage account statements, pay stubs and Social Security payment information, as well as retirement benefit statements for pensions, 401(k)s and other retirement accounts. You’ll also want to find copies of all of your loved one’s insurance policies—health, life, disability, long-term care, homeowner’s, auto and any others.
Then, you’ll need to learn about their expenses. You’ll need to gather bills and receipts for things such as their mortgage and other loans, their medical care, their credit cards and all their other basic living expenses—food, utilities, you name it.
Armed with this stack of papers, you’re ready to create a monthly budget. A good budget provides a reality check of how much you have to work with and how it’s spent from month to month. Is the amount of money coming in every month more than the amount of money going out? If so, your loved one’s finances are on the right track. If your loved one’s expenses are higher than their income, you have some work to do. Your goal should be to increase available sources of income while decreasing monthly expenses. Going forward, redo the budget every month to track how things are going.
One of the advantages of a budget is that it helps you to discover ways to save money. When you have a clear view of where money is going every month, you’ll probably see some expenses that you can trim.
Check out our Personal Finance
section to learn more about budgeting. You’ll also find useful information on other financial topics, such as how to manage debt and how to lower healthcare costs. Also, try out Allsup’s interactive financial calculators. They’ll make it much easier for you to do all the math that goes along with financial planning.
Tip: Create a monthly budget for yourself, too. If you use a budget to guide your own financial decisions, you may find that it’s easier to manage the expenses you take on as a caregiver.