Family caregivers spend an average of $7,242 a year out of pocket, roughly a quarter of their income, and most of that never appears in a budget as caregiving. It shows up as groceries, gas, a phone bill, a hardware store run, and a rent payment that isn't yours. The total stays invisible because the spending doesn't look like what it is.
If you've found yourself in this role, you're in a very large group. AARP and the National Alliance for Caregiving found that 63 million Americans, nearly one in four adults, provided ongoing care for an adult or a child with a complex condition in the past year, an increase of 20 million since 2015. Very few of them planned for it financially, because almost nobody does.
How much does family caregiving actually cost?
The average is $7,242 a year in direct out-of-pocket costs, and 78 percent of caregivers report having regular caregiving expenses. AARP's study of nearly 2,400 caregivers found those costs consuming about 26 percent of caregiver income on average, with only 5 percent reporting no caregiving expenses at all.
Where does it go? Household costs make up the largest share at around 52 percent, with medical costs at about 17 percent. That split surprises people who assume caregiving expense means prescriptions and copays. In practice it's frequently groceries, utilities, transportation, and home supplies for another household.
The magnitude of unpaid care is worth seeing at scale too. AARP's March 2026 report valued the economic contribution of family caregiving at $1.01 trillion annually, which exceeds total federal, state, and local Medicaid spending and nearly doubles all out-of-pocket health care spending in the country. The work you're doing is a load-bearing part of the health system, and it's largely uncompensated.
For a sense of what it replaces: Genworth's cost of care data put the national median for a home health aide at roughly $77,800 a year. That's the market rate for the hours many family caregivers provide for nothing.
Why doesn't caregiving show up in your budget?
Because caregiving spending doesn't look like caregiving. It looks exactly like your own ordinary spending, filed into the same categories, and it blends in completely.
Consider what a typical month contains. You buy groceries for two households on the same card. You drive to appointments, which is fuel and mileage that never gets separated from your commuting. You pick up prescriptions, supplies, and a grab bar from the hardware store. You add a line to your phone plan.
AARP's research found that 30 percent of caregivers covered rent or mortgage payments for the person they care for, and 21 percent paid for home modifications. Those are substantial amounts that land inside categories labeled housing and home improvement, indistinguishable from your own.
Here's why that matters beyond bookkeeping. You can't make decisions about a number you can't see. Caregivers routinely underestimate what they're spending, not because they're careless but because the information genuinely isn't available in the form they'd need it. Nearly half of caregivers in the 2025 study experienced at least one major financial impact, including taking on debt, stopping saving, or being unable to afford food, and much of that accumulates without anyone noticing a decision point.
What's the cost that never appears on a receipt?
The work impact, which is usually larger than the out-of-pocket spending and considerably harder to see. Nearly one in four caregivers provides 40 or more hours of care per week, which is a full-time job layered onto whatever else they're doing.
AARP found that about a third of caregivers report two or more work-related strains, such as changing their schedule, cutting hours, or taking leave, associated with an average annual outlay of $10,525. Reduced hours mean reduced income now, reduced retirement contributions, and reduced Social Security credits later. Older research from MetLife estimated lifetime losses in wages, pension, and Social Security averaging around $300,000 per caregiver, higher for women, and while that study is now dated, the direction and rough scale are consistent with more recent work.
Duration turns this from an episode into a trajectory. One third of caregivers have been in the role five years or more. At $7,242 a year, five years is over $36,000 before counting a single reduced paycheck.
Naming this isn't an argument against caregiving, and it isn't a suggestion that you should be doing something different. It's that decisions made without seeing the numbers tend to be worse than decisions made with them, and a lot of caregivers reach a crisis point that visibility would have flagged a year earlier.
How do you separate caregiving costs from your own?
Give caregiving its own category structure so the total exists somewhere. This is the single most useful practical change, and it takes about fifteen minutes to set up.
Build a caregiving parent category with real subcategories
You want to see the total and the composition. A structure that works: a Caregiving parent with subcategories for groceries and household, medical and prescriptions, transportation, home modifications, paid help and respite, and direct financial support like rent or utilities.
Most budgeting apps hand you a preset category list built around one household with ordinary expenses, which has no way to express this at all. Lucky Friday lets you create unlimited custom categories and subcategories with your own icons and colors, so the structure can match a situation the app's designers never anticipated. That's on the permanently free tier, with no category limits and no credit card required.
Log the cash and the untracked
Cash purchases, mileage, and anything you buy at their request are the pieces that vanish. Manual transaction entry is included free and handles exactly this. If you'd rather have transactions import automatically from your accounts, bank sync through Plaid is available on the premium plan, though the caregiving-specific items usually still need categorizing by hand.
Track reimbursables separately
If the person you care for, or a sibling, reimburses you for anything, that money leaves and returns on different timelines and will distort your categories in both directions. A dedicated reimbursable subcategory keeps it straight and gives you a record of what's still outstanding.
Review annually, not monthly
Caregiving costs are irregular by nature, so a monthly view tells you very little. The annual budget view is the one that produces the number worth knowing, and being able to select any past year lets you see whether the trajectory is climbing.
Keep records if taxes might be involved
Depending on the circumstances, you may be able to claim the person as a dependent, or deduct medical expenses you paid on their behalf. The rules are specific and worth asking a tax preparer about rather than guessing. Either way, the documentation has to exist before you need it, and transaction filtering by date range makes pulling a year of records straightforward.
What financial support actually exists?
More than most caregivers realize, and almost none of it finds you. You have to go looking.
Medicaid self-directed programs
This is the biggest one people don't know about. Medicare does not pay family caregivers, but many state Medicaid programs offer consumer-directed or self-directed care options that can pay a family member to provide care. Program names, eligibility rules, and whether a spouse can be paid all vary substantially by state. Start with your state Medicaid office or your local Area Agency on Aging.
Area Agencies on Aging and the Eldercare Locator
The Eldercare Locator, at 1-800-677-1116, connects you to your local Area Agency on Aging, which is the front door to most local services. The National Family Caregiver Support Program funds counseling, training, and respite care through those agencies. This call is the highest-value thirty minutes available to most caregivers and very few make it.
Respite care
Funded respite exists in many areas and is chronically underused, partly because caregivers feel they shouldn't need it. Ask about it specifically. Sustaining care over years requires breaks, and a break you take is worth more than one you feel you deserved.
Veterans programs
If the person you care for is a veteran, the VA runs caregiver support programs, some of which include stipends. Eligibility criteria are specific, so start at VA.gov or ask a VA social worker.
State tax credits
Oklahoma became the first state to enact a comprehensive caregiver tax credit in 2023, Nebraska followed in 2024, and roughly a dozen states considered similar legislation in the 2026 session. Check whether your state has one.
Pending federal proposals
Two bipartisan bills have been under consideration: the Credit for Caring Act, which would provide a nonrefundable tax credit of up to $5,000 to eligible working family caregivers, and the Lowering Costs for Caregivers Act, which would let caregivers use HSA or FSA funds for qualified medical expenses on behalf of parents. Both remained pending as of 2026, so plan without them and treat passage as upside.
How do you handle the money conversation?
Have it earlier than feels comfortable, and get the documents in place before they're urgent. The conversation is much harder in a hospital corridor than at a kitchen table.
The practical items to sort: a durable power of attorney for finances, understanding what income and assets exist, knowing where accounts and documents are kept, and whether long-term care insurance is in place. None of that is pleasant to raise, and every caregiver who has needed authority without having it will tell you to do it anyway.
Keep your money and theirs separate wherever you can, with a record of anything you pay on their behalf. That protects you if Medicaid eligibility is ever assessed, since transfers and commingled funds can complicate a look-back review, and it protects the relationship if siblings later ask questions.
Speaking of which, have the sibling conversation explicitly. Uneven contribution is the norm rather than the exception, and the resentment it generates is usually about the absence of an agreement rather than the imbalance itself. A short written note about who does what and who pays what prevents a great deal of later conflict.
How do you protect your own finances?
Set a limit, say it out loud, and keep your own retirement contributions running if there's any way to do it.
Stopping retirement contributions is the most common and most costly move, because contributions missed in your fifties can't be made up later and the compounding is gone. If you have to reduce, reduce rather than stop, and put a date on when you'll revisit it.
Keep your own emergency fund separate and intact. Caregiving increases the chance you'll face an income disruption, which is exactly what the fund exists for. Our guide to starting an emergency fund when you're already behind covers building or rebuilding that buffer when the budget is already stretched, and the threshold where it starts helping is lower than most advice suggests.
If caregiving has made your income irregular, through reduced hours, leave, or a shift to contract work, our approach to budgeting on an irregular income covers setting your fixed obligations against your leanest recent month rather than an average.
And decide in advance what you can sustain. A specific monthly figure you can hold for years beats an open-ended commitment that quietly consumes your savings. That isn't selfishness. A caregiver who runs out of money stops being able to provide care, which serves nobody.
One last thing worth saying plainly. Caregiving is hard in ways that have nothing to do with money, and the financial strain sits on top of grief, exhaustion, and often loneliness. If it's wearing you down, the Eldercare Locator connects to counseling and support groups alongside the practical services, and talking to someone is not a luxury item in this situation. If you've tracked spending before without much changing, our piece on why most budgeting apps never move your savings rate covers why visibility alone isn't enough, though in caregiving the visibility genuinely is the first step, because you can't ask for help with a number nobody has counted.
Common Questions About the Financial Side of Caregiving
How much do family caregivers spend out of pocket?
An average of $7,242 a year, according to AARP research, with 78 percent of caregivers reporting regular caregiving expenses and only 5 percent reporting none. Those costs consume roughly 26 percent of caregiver income on average. Household expenses make up the largest share at about 52 percent, with medical costs at around 17 percent.
Can I get paid to care for a family member?
Medicare does not pay family caregivers, but many state Medicaid programs offer consumer-directed or self-directed care options that can. Program names, eligibility rules, and whether a spouse qualifies vary substantially by state. Contact your state Medicaid office or call the Eldercare Locator at 1-800-677-1116 to find your local Area Agency on Aging.
Is there a tax credit for family caregivers?
At the federal level, the Credit for Caring Act would provide a nonrefundable credit of up to $5,000 for eligible working caregivers, but it remained pending in Congress as of 2026. Some states have their own, with Oklahoma first in 2023 and Nebraska in 2024. Separately, you may be able to claim the person as a dependent or deduct medical expenses you paid, which is worth asking a tax preparer about.
How do I track caregiving expenses separately from my own?
Create a dedicated caregiving category with subcategories for groceries and household, medical, transportation, home modifications, and any direct financial support. Log cash purchases manually, since those are the ones that disappear, and keep reimbursements in their own line. Review the total annually rather than monthly, because caregiving costs are too irregular for a monthly view to mean anything.
What support exists for family caregivers?
Start with the Eldercare Locator at 1-800-677-1116, which connects you to your local Area Agency on Aging and the National Family Caregiver Support Program, covering counseling, training, and respite care. If the person is a veteran, VA caregiver support programs may apply, some including stipends. Respite care in particular is widely available and badly underused.
Sources
AARP and the National Alliance for Caregiving. "Caregiving in the U.S. 2025," based on a probability panel of 6,858 caregivers. https://www.aarp.org/press/releases/2025-07-24-new-report-reveals-crisis-point-for-americas-63-million-family-caregivers.html
AARP Public Policy Institute. "2021 Caregiving Out-of-Pocket Costs Study," fielded March to April 2021 with nearly 2,400 caregivers. https://www.aarp.org/pri/topics/ltss/family-caregiving/family-caregivers-cost-survey/
AARP. "AARP Research Insights on Caregiving." https://www.aarp.org/pri/topics/ltss/family-caregiving/aarp-research-insights-caregiving/
AARP. "Economic Value of Family Caregiving Reaches $1 Trillion Dollars Annually." March 26, 2026. https://www.aarp.org/press/releases/2026-03-26-AARP-Economic-Value-Of-Family-Caregiving-Report.html
AARP Public Policy Institute. "Spectrum of Financial Supports for Family Caregivers." December 2024. https://www.aarp.org/pri/topics/ltss/family-caregiving/financial-supports-family-caregivers/
CNBC. "Family caregivers now provide $1 trillion worth of care annually, AARP finds." March 2026. https://www.cnbc.com/2026/03/26/family-caregivers.html
AARP. "The Overwhelming Financial Toll of Family Caregiving." https://www.aarp.org/caregiving/financial-legal/financial-impact-caregiving/