Caring for Aging Parents: Budgeting for Family Caregivers

Every month, Bonnie gives thanks for the arrival of her mother's long-term care insurance check.

Long-term care insurance pays for her mother's home care–which means that, while her mom receives the care she needs, Bonnie can run errands, attend programs at the kids' school and take a few moments to breathe.

The long-term care benefit also taught Bonnie the importance of a budget for care. With a budget, Bonnie can plan appropriately for her mom's care needs, giving Bonnie a sense of control in a situation that can feel so out-of-control.

The budget also means that Bonnie schedules regular time off for herself. Looking forward to having a break has become a critical coping strategy for Bonnie. She finds the she can manage her stress much better when she knows she soon will have a few hours to herself.

Role Reversal

Bonnie isn't alone in caring for her mom; a 2009 survey sponsored by National Alliance for Caregiving in collaboration with AARP found that that 29% of the U.S. adult population, or 65.7 million people, provide care to a family member.

Unfortunately, caregiving comes as a surprise to many. According to a recent survey of Americans aged 35 and older sponsored by Genworth Financial, long-term care is rarely top-of-mind until an event actually occurs.

The stress of helping a parent or another family member after a crisis or a diagnosis can be overwhelming. Understanding how to create a budget for care can be critical in helping to manage that stress.

These suggestions can help you create your care-giving budget:

1. Think short-term. Look at the needs for each month for your parent and for yourself. During the day and night, when will your parent or family member need care? During the day, when do you need a break?

2. Think long-term. The true struggle of a budget for care is determining how long you'll need a budget. It's so difficult to predict how long caregiving will last. So, do your best to map out how long finances and benefits, like long-term care insurance, could last. Use a  cost-of-care calculator, like this one from Genworth Financial,  to understand what costs will look like next year, in two years and in five years.

3. Be flexible. Care needs will increase which means the amount of help you and your parent will need will increase. Recognize that the care budget will change as your parents care needs change.

4. Pick a day each month that you'll review the budget. Perhaps on the 15th of each month you review the monthly budget. Ask yourself:

Is my parent getting the help he or she needs when he or she needs it? Am I getting the breaks when I need them?

Your budget may stay the same. Or, it might adjust as care needs increase in the morning or at night or during another time during the day. Or, it may change depending your need for much-deserved time away from caregiving.

5. Pick a day each year that you'll review the budget. Perhaps November 30 becomes the day that you review how you used finances during the year to pay for care. Consider: What worked well that you'd like to bring into the next year? What would you like to adjust or change?

6. Pass on the lessons learned about budgeting. If you have children, teach them what you've learned about a budget. This  article from SmartMoney.com offers suggestions and ideas on teaching kids about saving money for their own future.

Where Can You Find Help?

Because budgeting can be intimidating, look to professionals who can offer guidance. A financial planner and a geriatric care manager can be great resources for you. The financial planner can offer insights on managing the money; a geriatric care manager, typically a social worker or nurse, can help you find and organize your parent's care.

You can find a financial planner through National Association of Personal Financial Advisors and can learn more about hiring a geriatric care manager here.  You also can purchase a subscription to  tools that can help you organize your parent's care.