Resources and Financial Tips for Families

By Kaitlyn Szabo • March 2, 2022

One of the scariest parts of making money decisions is knowing that your actions impact not just yourself but also the family members for whom you are financially responsible. It is a pressure-filled and lonely position to be in, so we wanted to share resources and strategies that focus on the financial needs of caretakers and their families.

Build a Realistic Budget

We discuss this in greater detail in our previous blog about managing your finances in a multigenerational household. Still, it is so important it’s worth repeating: build a budget or money plan that works for everyone.

1. Establish your base income. Add up all the money all household members bring in to find your total household income. (Your income may include wages earned, Social Security or disability checks, or other benefits.)
2. Identify your essential expenses or “needs.” Work together to take stock of all the money you spend monthly. Split these costs into “needs” and “wants” sorted by priority (most important to least important). 

Budgeting is an ongoing challenge. It is often more difficult when you are the only income-earner in your household or if your combined income is volatile or too low to meet your needs. With that in mind, there are still ways you can change your mindset and incorporate new habits.

• Take inventory of what you have before making a purchase. Most savings tips are about spending less, but if you can pay nothing by using what you already have first, that’s even better!
• Rely on your network for non-financial support. Even if you don’t feel comfortable asking for money, people in you life can still provide emotional or other support.

How You Can Support Them

You have enough on your plate as a caretaker for a child or dependent adult. That’s why it is critical you seek out additional support or resources in your community.

• Research assistance programs to find affordable child care. For some helpful resources, check out Child Care Aware of America, Head Start, or the State of Minnesota’s COVID-19 guide for families. 
• Connect with a local CAP agency for more resources. Local CAP agencies throughout Minnesota offer services that can greatly assist families, like child development support and senior citizen care.

If you are responsible for a dependent (a child or other relative who relies on someone else for financial support), then you may be able to claim an exemption on your tax return.

• The child tax credit is a fully refundable credit that for tax-year 2021 offers up to $3,000 per qualifying dependent child 17 or younger on Dec. 31, 2021 (up to $3,600 per qualifying dependent child under 6).
• Taxpayers with dependents who don’t qualify for the child tax credit may be able to claim up to $500 in non-refundable credit for other dependents who meet specific criteria.

For more support, connect with our partner, Prepare + Prosper, for help with tax preparation, including a Do-it-Yourself (DIY) Tax Prep option for eligible individuals.

How They Can Support You

By definition, a dependent has limited, if any, ability to contribute to the household financially. But there are many ways for dependents to work together with their families to make a meaningful, realistic contribution.

• Perform household chores. Assigning age-appropriate tasks (with or without an allowance) builds life skills and helps lift pressure from a caretaker who might otherwise be responsible for those chores.
• Include in decision-making whenever possible. Even if the final decision is up to you, involving others as appropriate builds trust and transparency, especially if the issue directly affects them (and it often does!).

Ultimately, you cannot take care of someone else without first taking care of yourself. Nobody is perfect, and you can only do so much. While you can always try to improve, don’t be too hard on yourself. Practice self-care and give yourself credit for what you can do without berating yourself for what you cannot.

Money Management E-Newsletter: February 2022