How to Put an Elderly Loved One on a Budget | By: Rosanne Rogé

How to Put an Elderly Loved One on a Budget | By: Rosanne Rogé

Budgeting is hard for everyone; in particular those older individuals on a fixed income.

For adult children, talking to aging parents about money can be a challenge. However, there are ways for family members and caregivers to tackle this somewhat daunting task. Here are a few steps that we have utilized in our practice.

Prepare an expense worksheet: The first step we recommend is filling out an expense worksheet (a sample of which is provided below) that includes all of your loved one’s monthly income and expenses. This will provide you with a good handle on their expenditures, and help you identify which areas, if any, need to be pared back. If there is a shortfall in the monthly income, there are some things you can do.

  • Cut down utility costs: Contact utility companies to see if they offer a monthly budget plan, so the amount is the same every month (this is particularly helpful with the changes in the heating/air conditioning seasons; instead of paying higher monthly bills, the cost is spread over 12 months).
  • Pay insurance over time: Insurance premiums can be paid on a variety of modes (such as monthly, quarterly) versus annually. Depending on your loved one’s cash flow situation, it might be more cost-effective to pay premiums on a monthly or quarterly basis, rather than in one large lump sum.
  • Advantages for older homeowners: If your loved one owns a home, there are savings methods for them, if they meet certain eligibility requirements. You can also check with your state and local Department of Taxation and Finance to see if they have a STAR Program for which your family member may qualify. In addition, check with your local Veterans’ Affairs Department. If your loved one was on active duty, they may qualify for some property tax relief.
  • Dealing with credit card debt: If credit card debt is an issue; your loved one can apply for a debit card that can be replenished every month to cover emergencies.This is just one of several credit card strategies for retirees.
  • Benefits of packaged services: Cable, internet and telephone companies often offer bundled service packages at a lower cost than if each service was paid for individually.

Take the time to talk about finances: Be sure that there has been a discussion regarding the existing financial situation between all the parties involved (the elder, their family members and the caregiver). You want to be sure that your loved one is comfortable with providing this type of information to those caring for them. If it is a family situation, there is usually one child (or sibling) who should be considered “in charge” of the finances, to keep things simple. We usually recommend holding a family meeting where this topic is discussed among the siblings and one individual is chosen to oversee this function. After that person has been designated, an appointment should be made with an attorney to create a financial power of attorney (POA) that allows an elder to appoint an attorney-in-fact (usually a trusted family member, or friend) to act on their behalf to manage their financial matters. This POA can be limited to certain functions, or be broad enough to cover all financial actions.

We usually advise that a family member be given financial POA. However, if the family can’t decide who should receive financial POA, we recommend that you have this function taken care of by a Daily Money Manager.

The American Association of Daily Money Managers has members who provide daily money management services directly to individuals and their families. Their services meet a variety of needs from organizing and keeping track of financial paperwork to writing checks, paying bills and maintaining bank accounts.

The above recommendations are especially important if the senior is suffering from any mental issues, such as Alzheimer’s and other forms of dementia.

With a member of my family, we had all the bills sent to our local post office box and set up on line bill paying via their checking account. This way we were certain the bills were being paid on time and not being ignored.

Remember to reach out to resources to assist you. As a caregiver, the key point is to remember you are not alone!

Sample Expense Worksheet

Rosanne Roge is a certified financial planner, a certified senior advisor and co-author of the book, “The Banker and the Fisherman: Lessons in Life, Happiness and Wealth for the 21st Century.” Visit her full Expert Profile.


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