Over the past year, the pandemic has put caregivers under increased financial stress in addition to increasing their caregiving responsibilities. LendingTree shares tips on how caregivers can maximize their budgets during the post-pandemic recovery.
The pandemic has had a profound effect on seniors.
Deaths and hospitalizations from COVID-19 were substantially higher among people aged 65 and up – many of whom lived in nursing homes.
It’s no surprise that many older adults have decided to avoid moving into senior housing facilities as a result. From 2020 to 2021, senior housing occupancy dropped by 6.8%, according to the National Investment Center.
That, in turn, has increased demands on caregivers, who’ve reported extreme exhaustion and greater concerns about their mental health and emotional wellbeing during the pandemic.
Their finances have also taken a hit.
Many say that trying to balance caregiving with work responsibilities has increased their financial stress.
Let’s take a closer look at the costs of caring for aging relatives, along with some tips on how caregivers can maximize their budgets during the post-pandemic recovery.
The financial cost of being a caregiver
The pandemic dealt a double blow to caregivers and their finances.
Not only did it increase their existing responsibilities, for many, it also added new caregiving responsibilities, according to Kaiser Family Foundation.
Some have needed to take time off from paid jobs to keep up with increasingly demanding role as caregivers.
“That unexpected, additional time away from work means the caregiver is losing their vacation time or a chunk of their paycheck,” said Todd Christensen, an accredited financial counselor and education manager at Money Fit by DRS. “Lost vacation time means less opportunity to recover their emotional resilience, while lost income adds financial stress to the situation.”
The extra responsibilities have led to increased costs during the pandemic.
A report from New York Life, which found that the monthly costs of caring for an aging relative are about $1,000, showed that costs have climbed even higher for 54% of caregivers during the pandemic.
Nearly a quarter of caregivers say they’re shelling out $200 or more than usual every month of the public health crisis.
Plus, like many people during the pandemic, caregivers may have also experienced higher costs of daily living, especially if they took extra safety precautions for their vulnerable older relatives.
“Fear of getting out or bringing dangerous things into loved ones added grocery and restaurant food delivery costs,” said Allyson Dennen, an accredited financial counselor who runs the personal finance website for women Fablifenow.com.
Even as we return to a sense of normalcy, some of those costs may continue to remain high.
According to a study from late 2020, 63% of people will continue to splurge on grocery delivery, even after the pandemic.
That’s why finding ways to maximize budgets may remain critical for caregivers moving forward.
4 ways to maximize your budget as a caregiver
Looking for ways to make your budget go further?
Here are some tips you can use to ease financial stress as you navigate post-pandemic senior care.
1. Use grocery pick-up and delivery
Despite the extra costs that may come with grocery pick-up and delivery, this convenient service may offer some hidden ways to potentially save money, Christensen said.
“Shopping online means you are far less likely to make impulse purchases that result in the majority of overspending at the grocery store,” he said.
Plus, you may also be able to use digital coupons to lower the cost of your grocery bill, Dennen said.
“Many online grocery stores will use an electronic coupon system to click to add the coupons and discounts as you are shopping, saving money while you add to your cart,” she said.
2. Consider a mortgage refinance
Mortgage rates have dropped considerably in recent months.
Credit-worthy caregivers who own their own homes may be able to leverage these low rates to reduce their monthly costs.
“Lowering your mortgage APR by a single percentage point can save you a couple of hundred dollars per month,” Christensen said.
You may also be able to use your savings to build out a dedicated home office so you can work remotely, which can ultimately help you make ends meet amid higher caregiving costs.
3. Reduce your taxes
People who take care of an older adult in their home, cover more than half their expenses, and meet certain other requirements may be able to claim that person as a dependent and receive the Child and Dependent Care Tax Credit.
It provides a $500 tax credit per qualifying dependent for caregivers in 2020, among other benefits.
Talk with a tax professional to see if you qualify for these and other tax credits and deductions for caregivers.
4. Search for discounts on prescriptions
With the Kaiser Family Foundation reporting that 89% of people aged 65 and up take prescription medication, caregiving for an older adult can come with sky-high pharmacy bills.
You may be able to lower the costs of prescription medications through an assistance program. These are often offered by pharmaceutical companies to help people with Medicare Drug Plan (Part D) pay for their medications.
Keep in mind that the price of medications can vary significantly between drugstores, and you may be able to find a lower price by switching pharmacies.
Research from the U.S. Public Interest Research Group found that shopping around could save you hundreds or thousands of dollars on medications and that smaller independent pharmacies tend to be less expensive than large drugstores.
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Guest contributor: Joshira Maduro works as a market research analyst for LendingTree, where she writes insightful pieces that empower people to make better financial decisions. She lives in Charlotte, NC, navigating care for her elderly parents.
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