10 Steps to Financing Care at Home (US Guide)

When it comes to caring for someone, finances can be sensitive. There may be trust issues from the person being cared for or other family members. Managing our own money is a big part of independence, so losing that ability can be very difficult for your loved one. From now on, make sure to:

• Understand existing plans and expectations. Before you start, find out whether your loved one or other family members already have a plan. If so, make sure everyone understands it so you can help deliver and improve it if needed.
• Explain the need for a plan and your involvement. If no sufficient plan exists, make sure everyone understands the benefits of planning and what can go wrong if finances are not managed well.
• Be transparent, keep a record, and keep everyone updated. Your loved one and family should be able to view transactions and important decisions at all times.

Talk with your loved one and try to get a complete picture of their financial circumstances. Ask if you may look at bank statements and recent correspondence. Try to find out:

Debts: credit cards, mortgage, loans, finance agreements, overdrafts

Bank accounts: checking, savings, credit

Income: Social Security, pensions, employment, rental income, royalties, dividends

Savings and investments: retirement accounts (401(k), IRA), bonds, stocks

Property and assets: what they own and approximate values (a professional estimate early on can help)

Regular monthly costs: property tax, water, internet, electricity, subscriptions, food, insurance (auto, home, health), transportation

Use the spreadsheet template at the bottom of this article to record your findings and estimate monthly and future costs.

A durable power of attorney lets you act on your loved one’s behalf for financial decisions. A health care proxy (or medical power of attorney) covers treatment decisions. These become especially important if they lose the ability to communicate or manage affairs.

Arrange these as soon as you can — requirements vary by state and paperwork can take time. Without them in place, managing finances and care decisions becomes much harder if health declines quickly.

Contact an elder law attorney in your state, or start with resources from USA.gov on power of attorney.

An up-to-date will and related documents matter for decisions made before someone passes away. Depending on how care is funded, the estate may have debts (such as a reverse mortgage) where accessing assets after death is important. Without clear documents, everything becomes more complicated for your family at an already difficult time.

AARP estate planning resources list affordable and free options.

This is delicate and you may need to return to it later, depending on how independent your loved one is now. Only use or access someone’s bank cards and accounts with their explicit permission and full transparency.

You will likely reach a point where you need to make day-to-day purchases and handle financial tasks on their behalf — talk about this ahead of time. A durable power of attorney is vital for ongoing access; in the meantime, your loved one may be able to authorize some actions directly.

With an older relative, there may be costs that are no longer needed, forgotten, or from a provider that is not offering the best deal. Examples include an extra car, inefficient appliances, forgotten subscriptions, credit card interest, or buying too much food and throwing it away.

Review bank transactions to spot these costs, then cancel, reduce, or switch to a better deal.

This is important for both financial and practical reasons. Your local Area Agency on Aging can help coordinate an assessment of your loved one’s needs. Medicaid and many state programs also require a functional or financial eligibility review before paying for in-home care.

The assessment can identify equipment or home modifications for mobility and other needs, and show whether they qualify for subsidized home care (covered in step 8).

Find your Area Agency on Aging (Eldercare Locator)

Medicaid home care overview (Medicaid.gov)

Make sure you and your loved one are receiving all financial support you are entitled to.

Medicaid and Home- and Community-Based Services (HCBS)

Medicaid may cover in-home care for people who meet income and functional eligibility rules. Rules vary by state. Contact your state Medicaid office or Area Agency on Aging.

Medicaid eligibility basics (Medicaid.gov)

Medicare (limited home care)

Medicare covers short-term, skilled home health care after a hospital stay — not long-term personal care. Still worth understanding what it may pay for.

Medicare home health coverage (Medicare.gov)

Social Security and SSI

Your loved one may qualify for Social Security retirement benefits, Social Security Disability Insurance (SSDI), or Supplemental Security Income (SSI) depending on age, work history, and income.

Social Security benefits (SSA.gov)

VA Aid and Attendance

Wartime veterans and surviving spouses may qualify for additional pension benefits to help pay for in-home care.

VA Aid and Attendance (VA.gov)

Caregiver support programs

Some states offer paid family caregiver programs through Medicaid waivers. The National Family Caregiver Support Program connects caregivers to local resources.

SNAP, LIHEAP, and property tax relief

Food assistance (SNAP), energy bill help (LIHEAP), and property tax exemptions or deferrals may be available depending on income and location. Check your state and county websites.

Long-term care insurance

If your loved one has a long-term care policy, review what in-home care it covers and how to file claims.

Some assistive technology and reminder services may also qualify for public funding — see what public funding options are available for CareCalls specifically.

I am not a qualified financial adviser. This section lists options to investigate further. For each source, consider:

• How much is needed?
• Is the source growing, shrinking, or static? (Rising investments might be a last resort; a reverse mortgage can work but charges interest and fees.)
• Has tax already been paid? Will tax be due?
• How quickly can it be accessed? How far ahead must you start?

Income and pensions: rental income, royalties, dividends, required minimum distributions from retirement accounts

Savings and investments: brokerage accounts, bonds, stocks

Assets: selling extra vehicles or valuables; reverse mortgage (a loan against home equity, usually repaid when the home is sold); downsizing to a smaller home

Once you understand the financial situation and have done everything possible for now, plan ahead.

Use your records from step 2 to estimate how much care and day-to-day life will cost month by month, and how long the current arrangement can last before a new approach is needed.

Families often combine savings, public programs, and home equity over time. A written plan helps you know when to start the next step — rather than reacting in a crisis.