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A Caregiver’s Guide to Financial Planning for Their Loved One

Handling finances can be difficult for anyone, and it’s even more challenging for people living on a fixed income. Fortunately, there are steps that you can take to take a lot of the stress out of their financial fears.

According to the Social Security Administration (SSA), a typical senior needs around 70% of their work income to live comfortably after retirement. That need for money can be overwhelming for some seniors, which is why your help can go a long way toward stabilizing their financial needs. Use this guide to learn how you can help your loved one budget around their needs and create a financial plan for their future.

Organize Personal Finances

Managing your loved one’s finances can be tricky. It’s even more difficult if you don’t have all the access and information you need to assess your loved one’s financial situation. Take the following steps to make sure you have everything you need to make important financial decisions.

  • Identify existing financial accounts. Create a comprehensive list of any assets, loans, or other existing assets or fiscal responsibilities.
  • Gather important documents. Locate and store documents such as property deeds, power of attorney, and other papers and store them in a secure, fire-proof place.
  • Update documents if necessary. Review each document to see if they’re still up to date or if anything needs to be renewed or altered.
  • Establish online access. Make sure that you know the username and passwords for online payment portals. You may also need to update passwords if they’re old or too simple.
  • Have contact information ready. Know who you can reach out to if there are any accounts where you’ll need to speak with someone.

Simplify Your Loved One’s Finances

Seniors can benefit from downsizing more than just their home. As you organize loved one’s finances, you’ll likely find that there is plenty of account information, documents, and other details to go through. The following strategies can help pare down what you and your loved one need to manage and simplify future fiscal responsibilities.

  • Consolidate accounts. The fewer accounts there are, the easier they will be to manage. Take stock of how many different bank accounts and credit cards your loved one has and consider combining or eliminating some if possible.
  • Eliminate unnecessary costs. Review financial statements to save money and lower the total number of bills. Evaluate bigger expenses and recurring subscriptions to see what you can cut or replace with a cheaper alternative.
  • Set up payment schedules. Create a list of all the ongoing bills that your parents need to pay, including how often they’re paid and estimates for how much they’ll cost.
  • Look out for senior savings. Sometimes the best way to simplify finances is to find easy opportunities to save money. Take advantage of senior discounts and use community resources to save a few bucks or eliminate some bills altogether. For example, some communities offer free snow plowing services for seniors. 

Create a Senior-Friendly Budget

Budget management is one of the best ways to identify and adjust spending needs as people get older. Creating a monthly budget makes it easier for you and your loved one to track their finances, prioritize spending, and set healthy goals for future stability. Use these steps to start planning a budget for the future.

1. Calculate monthly income

In order to create a budget, it’s important to know how much your loved one has to spend and save. Create a list of different income sources and document how much income they earn each month. These sources should be pretty consistent, as you don’t want to base your budget around infrequent income. Common income sources include:

  • Active earnings
  • Social Security
  • Pension
  • Public assistance
  • Veteran’s benefits
  • Miscellaneous income

2. Track expenses

Once you’ve identified and streamlined your loved one’s financial accounts and bills, you can use that information to document their expenses. Your budget should include monetary breakdowns of the following information.

  • Fixed monthly expenses
    • Mortgage or rent
    • Loans
    • Phone and internet services
    • Subscriptions and memberships
  • Variable monthly expenses
    • Food (groceries, takeout, etc.)
    • Utilities
    • Personal care (haircuts, massages, etc.)
    • Hobbies and entertainment
    • Subscriptions and memberships
    • Clothing
    • Charitable gifts
  • Periodic expenses
    • Healthcare and prescriptions
    • Repairs and maintenance
    • Taxes
    • Insurance premiums
    • One-off personal expenses (vacations, luxury items, etc.)

This information can feel like a lot, but you don’t need to make any budgeting decisions right away. Track how much you spend for any items that apply to you, along with any other regular expenses. After a few months, you should have a better idea of how much you spend compared to your expenses.

Annual expenses can be a bit tricky, but there are a couple of ways to factor them into your tracking. If you like to evenly spread these costs out, you can always divide the expected amounts by 12 and add them to each month. You can also keep them in separate months and adjust your monthly budgets as needed.

3. Build your budget

Once you have all these sub-totals, you can total them up to determine your total income and expenses for the month. There are different ways that you can track these numbers – a digital worksheet is a great option, although you can certainly track everything with pencil and paper if you prefer. As long as you can reliably total numbers and track the difference between total expenses and income, you’ll have the details your loved one needs to plan for both now and the future.

4. Adjust the budget to fit your loved one’s needs

All the income and expense information can help you develop a budgeting strategy that addresses current needs and wants while setting your loved one up for future financial safety. Now it’s time to determine how much they will need available to spend and how much they should try and save.

It’s generally best practice to try and budget roughly 50-80% of your income to go toward expenses, and aging adults are no exception. Of course, that guideline leaves a fair bit of wiggle room. If you and your loved one aren’t sure where to start, you can try the 50/30/20 rule.

  • 50% toward fixed expenses and general needs, such as housing and groceries.
  • 30% toward personal wants, such as subscriptions and dining out.
  • 20% toward savings and investments.

These numbers are general guidelines, as some people won’t be able to save 20%, whereas others may be able to set more aside. You and your loved one will have a better idea of what target percentages work best for you, so set initial goals that are attainable and remember that you can always adjust them in the future.

Take Measure to Protect Their Finances

Financial planning is an important step in improving your loved one’s fiscal health. Unfortunately, there are threats out there that can wreak havoc on all your plans. The following tactic can help you defend your loved one’s hard-earned money from fraudsters.

  • Turn on account alerts. Banks and credit cards typically offer alerts for some types of transactions. Activate these alerts to stay notified if anyone tries to fraudulently use your loved one’s accounts.
  • Teach your loved one about scams. Seniors are typically more susceptible to fraudulent attacks. Make sure your loved one knows about false investment scams, fake donation solicitations, and other common scams that target seniors.
  • Monitor mail. Fraudsters don’t only target seniors online. Check your loved one’s mail for fake bills and other scam mail. If you don’t live nearby, the U.S. Postal Service’s informed delivery allows you to receive emails with images of incoming mail.
  • Consider credit and identity monitoring. Scammers may try and use your loved one’s identity to open new accounts or use their personal information. Think about investing in a monitoring system to stay on top of these threats.

Plan for Their Future

While financial planning is great for addressing immediate needs, it also plays a critical role in your loved one’s fiscal future. Here are a few major areas to consider when planning for your loved one’s financial future.


Saving money is a critical part of financial planning, no matter how old someone is. Social security payments only replace around 40% of an average retiree’s former income, leaving a notable gap that can leave seniors scrambling for funds. Savings help fill that gap so that your loved one can retire comfortably.

The good news is that the opportunities to save aren’t over after retirement. Regardless of whether your loved one built up their 401(k) or some other retirement account, it’s still wise to invest money in low-risk accounts that can help them earn money over time. Common options include:

  • High-yield savings and money market accounts
  • Certificates of deposit (CDs)
  • Treasury bills and bonds
  • Dividend-paying stocks
  • Fixed annuities

There are other options as well, although some may be better suited for your loved one than others. If you aren’t sure about the best path forward or want to know the best way to maximize social security benefits, you can always consult a financial advisor. Some expert advice can help your loved one make the most out of their money by developing a savings plan based around their current and future needs.

Legacy planning

It’s not always the easiest topic to discuss, but financial planning also involves what happens to your loved one’s estate after their death. A legacy plan puts a plan in place that allows seniors to dictate what happens with everything they own when they pass away. That plan typically includes the following details.

  • Designations for who receives wealth and assets and when they’ll receive them.
  • Ways to minimize tax implications for loved ones.
  • Specific order for carrying out other wishes.
  • Arrangements for guardianship of other loved ones.

As with savings, a financial advisor can help guide you through this process. The legacy planning process involves several legal documents and steps, so having an expert to put these in place can help secure your loved one’s wishes instead of forcing their family to go through probate court during a difficult time.


One of the most notable financial decisions seniors must make revolves around where they should spend their golden years. There are pros and cons to aging in place on their own or in a senior living community, so you’ll need to factor in which solution makes the most sense for them. Here are a few factors that will impact what type of senior housing is right for your loved one.

Whether your loved one is best suited for senior housing or living on their own, you’ll want to keep their housing needs in mind as they get older. There are a variety of expenses that will affect their ongoing budget, such as rent, home health care, and more. Savings can help address some of these growing needs, but it’s best to have a plan in place for addressing your loved one’s housing needs sooner rather than later.

Looking for senior living communities for your loved one? National Church Residences owns or operates more than 340 senior housing communities in 25 states and can help you find a community that helps your loved one live their ideal lifestyle.

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