Taking care of your elderly parents can be tough on your emotions and on your finances. This is especially true if you are the sole breadwinner in your family and will be using your personal finances for the care. However, it is a rewarding experience as you will know that your parents will be well taken care of in their old age.
You will need to ensure that there is an allowance in your budget for funeral cover for parents as well as ensure that your medical aid will allow you to put them on as beneficiaries. If you are going to be caring for your elderly parents in the future, read on below for tips on how to plan for this financially.
Take financial inventory
One of the first steps you will need to take is to take a financial inventory. Set up a family meeting with your parents, siblings and other family members to find out the state of the finances you have available.
If your parents are in their seventies or eighties, they will already have solid funeral cover in place but, if not, then you will need to find out about funeral cover for parents or take out family funeral cover. Ask your parents if they have any savings available to them and be sure to ask your siblings if they are able to contribute to monthly expenses. You could even speak to your aunts and uncles for financial aid.
The true struggle for creating a budget for elderly care is determining how long you will need to budget for. You will need to do your best to work out how much of a monthly budget you will need and how long you will require it for.
While this might not be the most pleasant thing to consider, it is important to do so that you can project how far into the future your savings will take you. Thinking long-term also involves considering the day-to-day costs, such as special groceries, caregiving costs and maintenance costs of any equipment your parents might need, like walkers or wheelchairs. If you have the help of other family members, ask them to help you draw up a future-facing budget.
Ask about equity
If your parents still have and own their home, it might be a good idea to tap into this for caregiving expenses. This might mean selling it and downsizing your parents to living with you or in a granny flat and using those funds to supplement their care.
You could also move your parents out of their home, renovate it and rent it out to bring in some extra money each month. Be sure to gain the approval of your parents before you look at any plans involving their equity, as they will need to sign off on all decisions. If your parents are already living with you, you could ask them if they are willing to sell their car in order to bring in more funds to help with their care.
Review your budget regularly
If there is one thing that every caregiver needs to know about elderly care, it is that the budget needs to be flexible. This means that you need to review it regularly in order to make any of the necessary changes to the expenses, so set aside a day each month to go over the budget and any changes that need to be made.
If one of your parents suddenly becomes ill or has to undergo an operation, you will need to factor in that their needs will change, which will affect the budget. If one of your parents should pass away, you will have to adjust the budget to suit the parent who is still with you. Luckily with funeral cover for parents, the funeral will be paid for, so this will not eat into your small monthly budget.
Call in a financial planner
If you are battling to draw up a budget, then you should call in a financial planner for some help and sound advice. Ask them for help in organising your parents’ finances so that you can use the money to pay for their care, and be sure to include your parents in these meetings for their input.
It might sound clichéd, but your parents are probably more likely to take advice from a stranger than they are from their children, which will help to ease them into the idea that you will be caring for them, both physically and financially. A financial planner will also help you choose the best funeral cover for your parents and can give you advice on how to handle any equity sales and transactions. An expert opinion can sometimes help immensely in handling this delicate matter, and will help to put both you and your parents at ease.