Budgeting for senior living can feel overwhelming, but ensuring seniors have a secure financial future is essential. As our loved one’s age, health issues, losses, and grief may compound distraction and contribute to poor decision-making, making it more critical than ever to create a budget that helps them manage their finances safely. Here is what you need to know about devising a budget for senior care.
Approaching the Topic of Budgeting
It is essential to approach the topic of budgeting with empathy and kindness, considering that seniors may perceive your efforts as a loss of their independence. So move forward with gentleness, compassion, and respect. Loved ones treated with dignity and diplomacy are more likely to work willingly with you as you help them with their finances.
Creating a Budget for an Elderly Family Member
To create a budget for an elderly family member, follow these steps:
Compile a List of Their Net Earnings
Start by compiling a comprehensive list of all their income streams, including social security benefits, investments, pensions, and hobbies. Deduct any applicable taxes or necessary deductions, then add up their remaining income to obtain their final take-home pay.
List Their Expenses
Start with basic fixed expenses like rent or mortgage, utilities, car payments, insurance, etc. Then include the costs that change each month, like groceries, gas, medications, and entertainment. Help them complete the list by reading their credit card and checking account statements. Watch out for sneaky expenses, such as one-time treat items, that appear regularly on bank statements.
List Their Actual Spending
Track daily spending when checks are written or credit cards are used. At the end of the week, help them record the expenses on their master tracking list and compare actual spending with costs.
List Savings Sources
Identify possible areas to make cutbacks, such as getting a senior discount with a different cable company or getting a better deal on cell service if they shop around. Little savings here and there will add up to more significant savings by the end of the year.
List Their Goals
Whether for a vacation, wedding and birthday gifts, significant repairs, or additional retirement funds, it is important to plan for these events and unexpected issues. Estimate the monthly savings required to meet their goals and prepare for anticipated caregiving costs.
List Any Obstacles
For some people, spending money fills a need. It can produce positive feelings or prevent negative ones. Some people shop for pleasure, and hunting for an item can be exciting, novel, or give a sense of empowerment and accomplishment. It can be a social activity connecting us with the community — significant for some retirees. At other times, shopping can help us avoid pain — maybe fear or loneliness. When over-spending occurs, there’s usually a negative outcome: stress, shame, or arguments. To administer a parent replace the power of a habit, brainstorm to find ways to fill the actual need.
Consider making a list of friends, family members, or organizations that can help you when your budget won’t add up. For example, Debtors Anonymous offers in-person group and telephone support meetings nationwide to people of any age.
Planning for the Future
A budget is a living document, and you must reach no single “right” number to fund senior care because a person’s needs may change with time. Instead, your budget should set a few target figures: the cost of senior care, the cost of living, the cost of healthcare, and the cost of leisure activities. It is also essential to consider factors such as inflation and unexpected expenses.
Conclusion – Creating a Budget for Senior Living
Creating a budget for senior living may seem overwhelming, but with patience and understanding, you can help your loved one manage their finances safely and prepare for their financial future. It is important to approach the topic with empathy and respect and follow the steps outlined above to create a comprehensive budget. Remember that a budget is a living document and should be revisited and adjusted. By planning for the future and considering all factors, you can help ensure that your loved one’s financial needs are met and that they can enjoy their golden years with peace of mind.
If you interested in learning more about the services for seniors offered at Vibrant Life Senior Services? Contact us today for more information!