Strategic Financial Moves for Professional Women Juggling Work and Caregiving

Caregiving often comes as an unexpected turn in life, bringing with it a mix of emotions, burdens and unanticipated challenges. While it can be deeply rewarding, the responsibility can also introduce significant stress, especially for those who have professional careers. Many women find themselves managing the dual roles of caregiver and professional, needing to navigate the complexities of work, family and caregiving simultaneously.

As a financial advisor for women, I’ve seen many clients face these challenges at various stages of their careers—whether they’re in the midst of climbing the corporate ladder or approaching retirement.

No matter when caregiving enters the picture, it can disrupt your financial stability and personal well-being. In this blog post, I’ll provide practical, real-life strategies to help you manage the financial impacts of caregiving, drawing on insights from both earlier career stages and the pre-retirement phase.

Managing Income and Employment Adjustments

Challenge: Reduced Work Hours Due to Caregiving

If your role as a caregiver has caused you to cut back in work hours, you may see a noticeable drop in income.

Strategy: Income Replacement Options

• Short-Term Disability Insurance: If your employer provides short-term disability insurance, check if it can be used in caregiving situations. For example, some policies may offer benefits if you need to reduce your hours significantly due to caregiving responsibilities.
• Family and Medical Leave: Review your company's family and medical leave policies. If applicable, use this leave to manage caregiving without completely losing income.

Strategy: Explore Flexible Work Arrangements

• Negotiating Flexible Hours: Propose flexible working hours or remote work options to your employer. For instance, if you're a project manager, working from home a few days a week can help you juggle caregiving tasks and professional duties more effectively.
• Part-Time Opportunities: If feasible, consider a part-time role or job-sharing arrangement. This can allow you to continue working while managing caregiving responsibilities, reducing the financial impact of a full-time position.

Challenge: Career Impact Due to Caregiving

You may feel your career progression could be be stalled because caregiving responsibilities are causing you to miss important professional opportunities.

Strategy: Career Development Adjustments

• Professional Development: Engage in online courses or certifications that can fit into your schedule. For example, an online leadership course can keep you competitive and prepared for future career advancements when your caregiving load lightens.
• Temporary Career Goals: Set short-term career goals aligned with your current caregiving situation. Focus on maintaining your professional skills and networking to ensure you're ready for future opportunities.

Managing Medical and Caregiving Costs

Challenge: Unexpected Home Modifications

Depending on the individual for whom you are responsible, you may need to update your home to install things like stairlifts or other special physical or mobility accommodations that can cost thousands of dollars.

Strategy: Budgeting and Financial Planning

• Allocate Savings: Create a dedicated savings account for caregiving-related expenses. For instance, if you foresee needing to modify your home, setting aside a portion of your income each month can help manage these costs without financial strain.
• Cost-Sharing: If possible, involve other family members in sharing the costs of home modifications or caregiving expenses. Discussing this with siblings can help distribute the financial burden more evenly.

Strategy: Financial Assistance Programs

• Government Programs: Look into government assistance programs like Medicaid or local community grants that may support home modifications. For example, Medicaid can sometimes cover modifications deemed medically necessary.
• Local Grants and Nonprofits: Research local nonprofits and community organizations that provide financial aid for caregiving costs. Organizations such as the Family Caregiver Alliance offer resources and grants that can ease the financial load.

Challenge: Ongoing Medical Expenses

Your loved one for whom you provide care requires regular medical treatments leading to significant out-of-pocket costs.

Strategy: Insurance and Tax Strategies

• Review Insurance Coverage: Ensure your/their health insurance covers as much of the medical expenses as possible. For example, consider using a high-deductible health plan with a health savings account (HSA) to manage out-of-pocket costs efficiently.
• Tax Deductions: Track all caregiving-related medical expenses for potential tax deductions. Medical expenses exceeding 7.5% of your adjusted gross income (AGI) may be deductible, potentially providing some financial relief.

Strategy: Financial Planning for Medical Costs

• Set Up an Emergency Fund: Build an emergency fund specifically for medical expenses. Aim to save at least 3-6 months’ worth of medical costs to cover unexpected expenses without disrupting your budget.
• Explore Financing Options: If immediate costs are overwhelming, consider medical credit cards or personal loans with favorable terms. For instance, a medical credit card offering 0% APR for a promotional period can help manage large expenses over time.

Maintaining Financial Independence

Challenge: Managing Financial Independence

You’re worried about maintaining your financial independence while handling caregiving responsibilities.

Strategy: Financial Independence Strategies

• Assess Financial Stability: Regularly review your financial situation to ensure you remain independent. Work with a financial advisor to adjust your plan if caregiving impacts your income or savings.
• Emergency Fund Planning: Strengthen your emergency fund to cover unexpected caregiving-related expenses without jeopardizing your financial independence.

Strategy: Financial Planning for Future Confidence

• Retirement Savings Adjustments: If caregiving leads to reduced contributions to retirement savings, develop a plan to catch up on savings when your financial situation improves. Consider increasing contributions or adjusting your investment strategy to stay on track for retirement goals.
• Review Investment Strategies: Adjust your investment strategies to align with current financial needs and future goals. A financial advisor can help create a plan that balances immediate caregiving costs with long-term financial security.

Managing income, employment and medical costs while caregiving requires a strategic and practical approach. By exploring income replacement options, negotiating flexible work arrangements and utilizing financial assistance programs, you can alleviate some of the financial pressures. Effective budgeting, insurance review and emergency fund planning will help you maintain financial independence and stability.

For personalized advice on managing these financial aspects, consult a financial advisor. If you don’t have one or would like a second opinion on your financial strategy, I would be more than happy to talk to you. Please don’t hesitate to reach out today.

Please Note: Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

These policies have exclusions and/or limitations. The cost and availability of Long Term Care insurance depend on factors such as age, health, and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of Long Term Care insurance. Guarantees are based on the claims paying ability of the insurance company.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Lauren Smith and not necessarily those of Raymond James.