Managing Financial Anxiety While Caregiving
With the baby-boomer population aging, many adult children are likely to become caregivers to parents or loved ones in the near future. To this point, data collected by the US Census Bureau suggests that by the end of the decade, approximately 20% of Americans will be age 65 or older. While this may not seem significant, this milestone will mark the first time in U.S. history that older adults are expected to outnumber children.
Caregiving Can Lead to Financial Anxiety
Becoming a caregiver of an aging family member can often occur suddenly, leaving you feeling ill-prepared mentally, physically, and even financially. The shocking fact is, according to a study conducted by AARP, caregivers spend nearly $7,000 a year on caregiving expenses. In addition, caregivers in the U.S. collectively spend close to $190 billion annually for their loved ones.
Taking on a sudden financial responsibility like caregiving can lead to stress and anxiety. This can also leave you unsure of how to navigate the immediate future while providing the best care to your loved one – without jeopardizing your retirement.
It is important to learn where this financial anxiety originates so you can identify and correct the precipitating factors. By understanding the root causes, you can begin to identify solutions that will help you manage the care of your loved one while staying organized financially.
What is Financial Anxiety?
Financial anxiety is the feeling of fear or worry about your financial situation. According to a study conducted by the Investor Education Foundation [FINRA] and Global Financial Literacy Excellence Center [GFLEC], 60% of participants reported feeling anxious when thinking about personal finances, with 50% feeling stressed if discussing their financial situation.
Identifiers of financial anxiety might include depression, social isolation, panic attacks, headaches, or elevated blood pressure – just to name a few. You might also find that you worry excessively about money, are obsessed with spending, are irritable, or have difficulty concentrating.
What Causes Financial Anxiety for Caregivers?
Conditions leading to financial anxiety generally include insufficient income, high amounts of debt, lack of assets, poor money management, lack of planning, and low financial literacy. However, financial anxiety that is directly related to caregiving for a loved one might involve different challenges.
Taking on the caregiver role suddenly can lead to a whirlwind of changes within your home. You may be moving the loved one in with you, or perhaps you are trying to serve as a caregiver remotely. Either way, being a caregiver to a loved one is a heavy lift – both emotionally and financially. You are gaining responsibility for your loved one’s health as well as handling their financial matters, thus adding to your plate of pre-existing responsibilities. Causes for caregiver financial anxiety might result from early retirement from your job, having to dip into savings to cover added expenses, or having no other support financially for your loved one.
What Are the Solutions?
It’s no secret that financial anxiety can be overwhelming, and insufficient planning can exacerbate the situation. To overcome these feelings, explore these tactics to promote wellness and success.
Try to avoid an unexpected crisis by planning ahead with your aging loved ones. Work with an experienced financial planner to evaluate their finances to determine the baseline of their situation. According to AARP, 66% of caregivers report a want for access to financial advice.
You should also consider evaluating your loved one’s will and estate planning needs or adding your name to their banking accounts to manage bills as they arrive. Some people may need to establish powers of attorney for financial or healthcare needs. It’s also important to think about long-term care needs as well as end-of-life wishes for your loved ones.
You should also work with a financial advisor to ensure that you have a baseline of your own financial situation, to better map the caregiver scenario that you might face in the future. The goal of planning ahead is to feel prepared so you are not caught off guard should the unexpected arise.
It is no secret that anxiety and stress take their toll on the human condition. That’s why you must remember to check on yourself – to evaluate your emotions, your stress levels, and your financial wellbeing. After understanding your symptoms and their triggers, accept them and establish coping strategies to reduce the feelings in the future. Most importantly, recognize when you need to take a break, so you are able to re-energize.
Ask for Help
Asking for help involves approaching family members for relief so that you can not only have a time of respite, but also so that you are not solely responsible for the emotional and financial impacts related to caregiving. When possible, do not take on these burdens alone.
Asking for help also involves discussing your situation and that of your loved one with an experienced financial advisor. An effective advisor can help you find ways to save money and reduce costs – while staying on track for your own retirement. They can also assist in making certain that you are receiving any benefits that your loved one may be due, such as government services, long-term health benefits, or insurance.
In addition, don’t forget to ask doctors or other service providers for help. They can often provide free samples or prescription coupons. And don’t forget to take advantage of senior savings such as discounts on food, hotels, retail, and medical supplies.
Connect with the Team at Brookstone Wealth Management
Working with an experienced financial advisor to evaluate your current financial situation can help you to better prepare for the future and the care of your loved ones. At Brookstone Wealth Management, we can develop your Financial Fingerprint™ – a customized wealth management plan that takes long-term care needs into account, and is quick to assemble, easy to understand, and simple to modify as your circumstances change.
We offer a complete suite of wealth management services, supported by an experienced team of financial and legal professionals. Our focus is on coaching, teaching, and mentoring our clients and we would love the opportunity to help you find your True North.
To get started, contact us today.