Budgeting is part of any effective Life Care Plan and becomes even more important when seniors experience a big life change, such as moving into an assisted living facility, losing a spouse or having a drastic change in health. It begins with an assessment of your resources and your needs. The purpose of Life Care Planning is to improve the quality of life for the person for whom we are planning. Budgeting helps us understand what tools and resources we have to work in accomplishing that goal.
As you prepare your budget, there are several basic concepts you should consider. First, you should determine your needs, broken down on a monthly basis if possible. Consider everything from daily living expenses (rent, food, utilities) to recurring monthly fees (car payments, Netflix subscriptions) and other miscellaneous expenses (charitable donations, gifts, recreational activities). Don’t forget to include extraordinary emergency expenses that could catch you off guard (replacing a roof, unexpected healthcare expenses, etc) as well.
Then think: Is your monthly income sufficient to meet your needs and, if not, how will you supplement or enhance your income to meet your needs? Be realistic. Where possible, consider limiting certain risks by purchasing insurance. If you need professional help, speak with a Certified Financial Planner or someone else who has the skills to help you establish a budget.
Armed with this, we can help you move forward in drafting a Life Care Plan (and the appropriate Medicaid planning) that will give you the best life possible, without depleting your life savings or going into debt.
To Refresh:
Create a budget by:
1. Naming categories that describe your expenses.
2. Estimate expenditures for each category. Use last year’s expenses as a guide.
3. Find areas where you can cut back.
4. Implement your budget, and stick to it.
5. Review and modify your budget at regular intervals.
Helpful Budgeting Links:
BetterBudgeting
Kiplinger Household Budgeting Worksheet
Key Dollar Amounts for Elder Law
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