Navigating Financial Strain as a Caregiver

Caring for someone you love is a big job—and while it can be deeply meaningful, it often comes with a price tag you didn’t see coming. Before long, you might find yourself wondering how to keep supporting your loved one without draining your savings or putting your own future at risk.

If that sounds familiar, you’re not alone. Millions of family caregivers face the same struggle every day. While financial strain is very real, there are ways to get ahead of it—or come back from previous setbacks. 

With a little planning, some helpful resources, and a few mindset shifts, you can find a balance that allows you to protect your financial stability while still showing up for the people who need you most.

Why Financial Strain Hits Caregivers Hard

Part of what makes the money side of caregiving so tricky is that the costs don’t just come from one place—they tend to pile up in ways you might not expect. 

There are the obvious out-of-pocket expenses, like supplies, transportation, and even home modifications to make a house safer. Then there are the costs you don’t see right away—smaller paychecks, missed retirement contributions, and even lost Social Security credits if you leave your job. Over time, those hidden losses can quietly snowball and hit your finances harder than you’d think.

But with recognition comes relief. It’s easier to make a plan—and ask for help—when you fully understand where the pressure is coming from.

How To Protect Your Finances as a Caregiver

Revisit Your Budget

When money feels tight, taking a closer look at your budget can feel intimidating—but getting a clear picture of where your money is going is the best way to understand your unique situation. 

Start by tracking all of your expenses for a few weeks. This could be as simple as jotting things down in a notebook or using a budgeting app to log every cost. Make note of which costs are one-time expenses, and which are ongoing. Also, review how caregiving is affecting your income, retirement contributions, and even your insurance. 

Once you see the numbers in front of you, it becomes easier to set a realistic budget and identify vulnerable spots or opportunities to cut down on expenses. 

Review What Your Loved One Has

In addition to taking stock of your own finances, you'll want to review what resources your loved one may already have. Understanding their insurance benefits, assets, and income can help you tap into support without dipping into your own reserves.

Start by reviewing any health insurance plans, including Medicare, Medicaid, or private coverage. Each may offer different benefits like coverage for in-home care, medical equipment, or therapies that could reduce out-of-pocket expenses. It’s also a good idea to look into any long-term care insurance policies, which can help cover extended care costs.

Don't forget to factor in other assets when financial planning—look at any savings accounts, retirement funds, or properties. Knowing what your loved one owns or is entitled to can open doors to programs or assistance you might not have known about.

This review can feel overwhelming, especially during stressful times, so don’t hesitate to ask for help—from financial advisors, elder law attorneys, or local caregiver support organizations—to get a full picture and plan accordingly.

Build a Safety Net 

An unexpected hospital stay, a sudden home repair, or a gap in your income can easily throw things off balance. However, a strong emergency fund can help you weather these surprises. 

Experts generally recommend building up three to six months’ worth of essential expenses. It may take some time to get there, but it's one of the best ways to beat financial setbacks. 

You can dedicate a small percentage of your budget, then set up automatic transfers into a savings or high-yield savings account to simplify the process.

Leverage Workplace Benefits

Work can be more than just a place to clock in and out of—sometimes, the right insurance or workplace perk can bridge a financial gap. Start by reviewing your current health and long-term care insurance; you may be missing out on unknown support.

Then look to benefits like health savings accounts (HSAs) or flexible spending accounts (FSAs) if you have a lot of out-of-pocket medical expenses. They allow you to set aside pre-tax dollars for medical expenses, which can put more money back in your pocket. It's also worth asking your employer about employee assistance programs (EAPs), which may be able to help you take advantage of free financial coaching or counseling.

Finally, don't forget to explore California Paid Family Leave, which offers up to eight weeks of partial pay to caregivers.

Explore Programs and Resources

Just like your loved one needs a care team to look after their health, you need a support network to help carry the load—especially when it comes to relief and resources.

If you’re in California, your local Caregiver Resource Center, Area Agency on Aging, or 211 office, can connect you with valuable resources. These include respite grants, free financial counseling, and help applying for benefits like In-Home Supportive Services (IHSS), which sometimes allows family caregivers to be paid for the care they provide. 

If you’re caring for a veteran, the VA offers specific financial assistance and caregiver support programs. 

Make the Most of Tax Breaks

When tax season rolls around, don’t overlook potential deductions and credits. Depending on your situation, you might be able to claim your loved one as a dependent, deduct medical expenses, or take the Child and Dependent Care Credit—even for adult dependents. Consult a tax professional, who can help you identify what you qualify for.

Keeping Your Own Future in Mind

Part of navigating financial strain as a caregiver is keeping your future on track. Caring for a loved one can take a lot of time, energy, and money—and if you’re not careful, your own long-term security can take a back seat.

Here are a few ways to protect and prepare for financial security in the future:

• Keep contributing to retirement, even in small amounts. You don't want financial strain to follow you into your golden years. Instead, maximize employer matching if possible—which is free money to grow your savings faster—and set automatic deposits into your 401(k) or IRA to keep building without having to think about it every month.

• Consider your own long-term care needs. Watching the costs of care up close can be eye-opening. Look into options like long-term care insurance or life insurance with a care benefit, so you’re better prepared if you ever need help yourself.

• Protect your financial standing. Pay bills on time and avoid high-interest debt that can spiral quickly. If your debt balances are piling up, explore nonprofit credit counseling services that can help you make a plan and reduce stress.

• Talk with a financial advisor (regularly). If you’re not sure how much to save or how to balance your caregiving role with your long-term goals, a financial professional can help. They’re trained to spot gaps or risks you might miss, and can create a plan tailored to your needs that can adjust as your situation does.

The Bottom Line

The financial strain of caregiving can feel heavy, but it doesn’t have to overwhelm you. You can get ahead of caregiver financial stress by reviewing your situation and exploring resources. With a little effort, you can strike a balance that protects both the present and future you. 

Are you a family caregiver in Orange County? If so, support and resources are just a click away. Visit Caregiver Resource Center OC to learn more.