Individuals may feel overwhelmed while acting as a full-time caregiver for a spouse, child or aging relative. When a serious illness requires round-the-clock care, some caretakers quit their jobs or reduce their hours. An individual may also sell off his or her assets to help a loved one recover.
A study conducted by AARP revealed that in 2019, unpaid relatives spent more than $7,400 of their own money on a family member’s expenses. These costs appeared nearly twice as high for individuals caring for a relative over 50 and living at least one hour away.
Caretakers often use their own money for a loved one’s expenses
AARP’s researchers found that more than 75% of caregivers paid at least $3,000 toward a loved one’s mortgage or making changes to a home. Out-of-pocket expenses included installing devices to accommodate safety, healthcare and remote monitoring.
Caregivers also spent their own money on a family member’s insurance co-payments, such as for prescriptions and doctor’s visits. Individuals paid an average of about $1,800 for a relative’s medical needs including wheelchairs, hearing aids and other items.
Caretakers may find themselves burdened with both stress and debts
The effects of a long-term illness may create a financial burden in addition to stress and emotional strain. As reported by CNBC, caregivers may experience adversity from their employers and have saved an average of only $68,000 for their retirement. For many, it may have appeared logical to quit a job and live off savings to care for an ill relative. The costs of helping a loved one, however, may go unnoticed until a caregiver has trouble paying his or her own bills.
Financial problems that arise without fault may require relief through a Chapter 7 bankruptcy petition. The court may discharge a caretaker’s outstanding consumer debts including his or her own medical bills.