How to be a Financial Caregiver

Much like a health care power of attorney will assist with medical decisions; a caregiver may also obtain financial power of attorney. This document grants the caregiver the power to make financial decisions and handle administrative affairs on another person’s behalf (source). This can prove to be especially important as people grow older and may not have the same mental awareness as they did before. As we have discussed in previous articles, there are many out-of-pocket costs associated with being a caregiver. If you are not a power of attorney but manage the general spending activities of your aging loved one, then you are a financial caregiver.

What or who exactly is a financial caregiver? We have provided some helpful tips on how to be a financial caregiver below.

Who is a Financial Caregiver?

If you are a financial caregiver, then you are typically involved with, or responsible for, at least one of the following on behalf of your aging loved one:

  • Bill paying
  • Making or monitoring bank deposits
  • Filing and tracking insurance and benefit claims
  • Making savings and investment decisions
  • Preparing tax documents

How to be a Financial Caregiver

Being a caregiver is hard enough. To care for someone emotionally and physically can be difficult but adding in the financial management aspect may seem especially daunting. Please don’t feel lost or overwhelmed. You can be a financial caregiver! To help you stay organized and feel more confident in your abilities, follow the suggestions below.

Start Your Financial Planning Now, Before an Emergency Arises



Be prepared. That is the first and most important piece of advice. Take the time now to get organized and define exactly what you will be doing with or on behalf of your aging loved one. Preparation will be critical in the event of an emergency, especially when fast decisions or finding information quickly is required. To be prepared, consider these additional tips:

Make Sure you have Immediate Access to Important Financial Documents



As your parents get older it will become important for you to make sure you keep their critical financial documents organized. Obtaining and retaining these documents will give you the information you need to protect your parents’ financial assets. However, how do you know which documents are essential for you to hold onto? See the full list on our blog post about What Financial Documents Do I Need to Keep for My Aging Parents? The documents are organized as follows:

  • Essential Records
  • Defined-benefit plan documents
  • Estate-planning documents
  • Insurance information

Help Your Aging Loved One Save Money and Invest

Everyone’s financial situation is different, but we can all try to save just a little more. Depending on where your loved one is on their financial journey – consider helping them map out ways to save more each month and propose doing some investing if they haven’t already. You might also consider involving a financial advisor if you have not consulted one before.

Get Access to All Financial Accounts (Checking, Savings and Investments) 



To write checks or withdraw funds, you need to be able to access the accounts and should most likely be named on the account as well. Take action today to get the appropriate access and account information. This kind of information will be especially helpful if you provide long-distance caregiving support because you will then be able to access accounts online and over the phone.

Have Important and Recurring Bills Set Up as Automatic Payments 



Arrange for water, electric, health insurance, mortgage, and other recurring payments to be set up as automatic payments or withdrawals. Not only will this ensure the payments occur on time, but automatic payments can sometimes save you money by up to a few percentage points. It’s also a good idea to link the payments to the best checking account to ensure there are always funds available.

Avoid Paper Checks and Move to Auto-Deposits for Benefits and Other Earnings



A direct deposit is often safer and easier to track than a paper check. Determine what regular payments your loved one receives and see if any can be directly deposited into their account. Like the auto-payments of bills, this will allow you to see where the funds are, know when to expect payments, and make sure they are deposited into the right checking account.

These are only a few tips on how to be a financial caregiver. Speak to a financial advisor and your aging loved one about what makes sense for you.