Dwindling retirement incomes and longer lifespans are sending some seniors to live in their adult children’s homes. Moving mom or dad in may feel like the right thing to do in your heart. However, moving your parent into your home means you both have to prepare for how this will impact your finances. Figuring out what to plan and budget for can help get you started.
Do find a way to make space and pay for it
Depending on space available in your home, you may need to add a bedroom on another level or reconfigure another space before moving a parent in. Bathrooms upgrades like a walk-in tub, adding a chair lift and other safety features may be needed. Price out the cost of remodeling and consider a Home Equity Line of Credit to cover this cost if cash isn’t immediately available.
Do budget for everyday expenses
Discuss expectations up front. Decide how much each of you can and will contribute to living expenses. Anticipate higher expenses such as buying more food and increased utility costs. Is your parent bringing a pet? Don’t forget to factor the costs of pet care into the new budget. Going to chauffeur dad or mom to the doctor or around town? Include more gas money in your budget to cover extra trips. Jot down a list of monthly, quarterly and annual expenses, then create a newly merged household budget.
Do find a money source for household expenses
If your parent does not have much cash to contribute to household expenses, have them consider selling assets they are not using, like property or a car. Proceeds can be placed into a money market share account to assist in covering budget costs.
As a final note, it’s a good idea to talk with your parent about estate planning. Talk to your mom or dad about their will, a durable power of attorney and a healthcare power of attorney.
Article provided by Local Government Federal Credit Union.
The advice provided is for information purposes only. Consult your financial advisor for additional guidance.