9 Family Spending and Budgeting

Introduction

Assisting a patient and their family to effectively manage their money may be an important task for a Home Health Aide/Personal Care Aide. It is also important for the HHA/PCA who assists patients with shopping to be sure to effectively utilize a patient’s money by observing cost-saving techniques. This module focuses on how to assist a patient and their family with managing their money. We will discuss how to record expenditures and how to shop effectively in order to reduce costs for the family. Home Health Aides/Personal Care Aides should remember to always follow the Care Plan to decide whether or not they should provide assistance with money management and shopping and they should keep accurate records when they do so.

Unit A: The Role Of the Home Health Aide/Personal Care Aide in Family Spending and Budgeting

The Home Health Aide/Personal Care Aide’s Role in Family Spending and Budgeting

Home Health Aides/Personal Care Aides may be asked, as directed in the Care Plan, to assist their patient and their family with developing and sticking to a budget. They may also be asked to assist the patient with paying bills and running errands, such as grocery shopping or banking for their patient. It is important to remember that assisting someone with their money is a task in which accurate record keeping is paramount (very important). Home Health Aides/Personal Care Aides must always carefully and immediately document how much of the patient’s money they spent and what they spent it on.

Home Health Aides/Personal Care Aides should only provide assistance with managing and handling a patient’s money and budget as directed by the Care Plan. Their employer will tell them the policies and procedures for the agency they work regarding whether or not they will help with handling a patient’s money and what the rules are for doing so. If Home Health Aides/Personal Care Aides are not allowed to handle money, they must NEVER agree to do so, as they could get into a lot of trouble and potentially lose their job. If a patient or family member ever asks a HHA/PCA to handle their money and they are not allowed to do so or do not feel comfortable doing so, they should discuss this with a supervisor and seek their guidance.

Even if part of their job is to handle a patient’s money, Home Health Aides/Personal Care Aides should NEVER use the patient’s money for their own needs, even if they are planning to pay them back (Leahy, Fuzy & Grafe, 2013). This is considered to be stealing. They could lose their job, get their agency into a lot of trouble, and face legal and criminal action, such as getting arrested. Document all use of the patient’s money as directed by the Care Plan and the agency’s policies and procedures. Use checks instead of cash whenever possible. This is the easiest way to accurately keep track of how money was spent. It is much more difficult to keep track of cash. The patient must sign the checks, which demonstrates that they intended the money to be used for the purpose they assigned.

Self-Check Activity m9-1


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Self-Check Activity M9-1

True or False

1. It is okay to buy yourself something at the store with your patient’s money. True or False? ___________

2. It is okay to borrow money from your patient, as long as you promise to pay it back. True or False? ___________

3. Using a patient’s money in any way other than that directed in the Care Plan or for which they have specifically instructed you to do so is considered stealing and could result in losing your job or going to jail. True or False? ___________

Check your answers!

Income

Many people, including patients and their families may live on a fixed income. A fixed income means that a person lives on a set income and must plan their expenses in order to fit into the amount of money that they have coming in. People may have income from a variety of sources. Income is the amount of money that enters a household. Some people get a paycheck once a week or biweekly. Biweekly paychecks are usually paychecks that come in twice per month, or every other week. Others receive a pension from a retirement plan. Some people may receive financial assistance from state or government sources.

If Home Health Aides/Personal Care Aides will be helping their patient plan a budget, they must first know the amount of money that is coming in to the household in order to help make a plan. The patient may be sensitive about the amount of money they make. Never be judgmental about the amount of money or the source of a patient’s income. Allow a patient to manage their budget independently if they prefer, but offer assistance when needed. Some patients may require complete assistance with planning for their budget. The Care Plan will direct the HHA/PCA as to how much assistance they will provide their patient and their family with managing expenses.

Self-Check Activity M9-2

True or False

1. Income is the amount of money coming in to a household, regardless of source. True or False? _________

2. A fixed income means a person can spend as much as they want regardless of how much money they make. True or False? _________

Check your answers!

Debt and Stress

Money can be a real source of stress for many people. If we are unable to buy things we need or want, it can cause great frustration, anger, or depression. When people spend more than the amount of money they have, they can incur debt. Debt is any money that is owed. Some people incur debt by spending more money than their income (money they earn). They may borrow money from family, friends, or lending agencies, such as banks. They may also use credit cards to purchase items they cannot afford. If a person does not pay their credit card bills on time or in the full amount due, over a relatively short period of time, a higher amount of money than what the person borrowed becomes due. This is because credit card and lending agencies charge what is called interest. Interest is the amount of money a person pays on top of what they borrowed. When we borrow money from lending agencies or credit card companies, we are charged interest. This is the cost of allowing us to borrow money that we do not currently have.

If a patient has a high amount of debt and is having difficulty paying their bills or loans, and would like assistance with this aspect of their life, Home Health Aides/Personal Care Aides could speak with their supervisor about what options their patient has. Many communities may have credit counseling services available to help patients and families manage their debts and plan for living expenses appropriately. If Home Health Aides/Personal Care Aides think their patient could benefit from this type of service, they should discuss their concerns with their supervisor. The home care team may be able to provide budgeting assistance and referrals to community agencies to help families with this type of need. The best way to reduce stress about money is to budget and plan for expenses.

To help your patient and family determine their debt to income ratio, a Debt to Income Ratio Calculator Worksheet can be downloaded and copied from American Consumer Credit Counseling at: http://www.consumercredit.com/media/11405/debttoincomeratio.pdf

Self-Check Activity M9-3

1. Which of the following best describes debt?

a). The amount of money coming in to the household.

b). The expenses that a family has.

c). The amount of money in a person’s savings account.

d). The amount of money a person owes after borrowing.

Check your answers!

Daily Expense Tracker

One way to determine where money is going in the household and to properly set up a budget is to use a daily expense tracker which helps to keep track of daily expenses for a period of time. This can give a patient and their HHA/PCA useful information where money needs to be allocated (distributed or assigned to a particular category) and where spending cuts can be made. When doing this, it is important to keep track of every item that is purchased, even if it seems small or insignificant. Oftentimes, people may not even realize the amount of money they spend on unnecessary items. These can be helpful places to cut back on expenses without too much hardship.

You can make a daily expense tracker in a software program such as Excel or using a word document. You can even keep track on a piece of paper with headings indicating the date, type of expense, and amount spent. Alternatively, a Daily Expense Tracker Worksheet can be downloaded from American Consumer Credit Counseling at: http://www.consumercredit.com/media/11395/dailyexpensetracker.pdf

A Daily Expense Tracker Worksheet Home Health Aides/Personal Care Aides might look like the following example.

Daily Expense Tracker Worksheet

Date Type of Expense (What and where was the money spent on) Amount Spent

Let’s look at a sample daily expense tracker that has been filled out:

Daily Expense Tracker Worksheet

Date Type of Expense (What and where was the money spent on) Amount Spent
01/15/15 Gas for car-gas station $20.00
01/16/15 Groceries-supermarket $27.21
01/16/15 Lunch-Fast food restaurant $5.99
01/16/15 Gum & soda-gas station $4.51
01/17/15 Cleaning products-grocery store $15.61

As you can see from the previous example, expenses were tracked for 3 days. Money was spent on gas, groceries, lunch, gum & soda, and cleaning products. Using a daily expense tracker such as this may be a helpful way for a person to recognize that they are spending some money on unnecessary items such as eating out or purchasing gum or soda. If they find their expenses exceed their income, eliminating unnecessary items is one way to help income meet their expenses.

Self-Check Activity M9-4

1. Which of the items from the sample daily expense tracker worksheet are probably unnecessary? Select all that apply.

a). Gas for car

b). Groceries

c). Fast food

d). Gum and soda

Check your answers!

Planning a Budget

A budget involves planning for expenses within the limits of the amount of income (money coming in). People often find it helpful to set up categories of expenses when planning their budget. The first step is to determine all the household expenses. The second step is to determine all sources of income. Then, once all the data has been collected, a person will be able to determine if the monthly income meets, exceeds, or is less than the monthly household expenses. We will take a look at how to determine expenses and income next. A Household Budgeting Worksheet can be downloaded and copied for personal use from American Consumer Credit Counseling at: http://www.consumercredit.com/media/11393/household_budgeting_worksheet_2013.pdf

Determining Expenses

The next step in effectively managing money is to determine what the actual expenses of the household are. Actual expenses are expenses the patient and family have. These include rent or mortgage payments, car payments, car or health insurance payments, groceries, gas and electric bills, water bills, tuition for school, prescription medication costs, gas for the car, and clothing. Depending on the patient and their family’s unique needs, types of expenses will vary. Home Health Aides/Personal Care Aides should discuss with their patient the expenses they have in order to best help them develop a budget.

Remember; never be judgmental in how a patient spends their money. People choose to spend their money in very different ways. Home Health Aides/Personal Care Aides may not agree with the way their patient spends their money, just like the patient may not agree with how a HHA/PCA spends their own money. Remember, it is the patients money, just like a paycheck is the HHA/PCAs money. The job of the Home Health Aide/Personal Care Aide is to assist the patient and family with being able to plan effectively so as to reduce their stress about money, and to live independently and according to their income restrictions and preferences.

Home Health Aides/Personal Care Aides can determine expenditures (expenses) by writing down the cost of all the family’s living expenses. They could do this in a spreadsheet, a word document, or on a piece of paper with categories. Once they have figured out all the categories of expenses and how much each costs the family on a monthly basis, they should then add up the total expenses.

A sample expenditure sheet may look like this:

Expenditure Worksheet

Expenditure Cost
Rent or mortgage
Automobile payment
Automobile insurance
Health and dental insurance
Homeowner’s/renter’s insurance
Life/disability insurance
Child support/alimony
Food
Electricity
Gas
Water
Garbage
Education (tuition, supplies)
Prescription medications
Cleaning supplies
Clothing
Household items
Personal care (hair, nails)
Health club membership
Club memberships and dues
Entertainment
Subscriptions
Total Monthly Expenses Total:

Determining Income

Once Home Health Aides/Personal Care Aides have figured out the expenses, they need to determine the amount of income the household has. Determining income is done by writing down all the sources of income and the amount of income from each source. An example of what this might look like is this:

Monthly Income Worksheet

Income Source Amount of Income
Salary/wages (self)
Salary/wages (spouse, significant other)
Social security
Unemployment
Child support/alimony
Financial aid/scholarships
Pension plan/retirement
Food stamps
Public/government assistance
Total Monthly Income Total:

Now that they have figured out expenses and amount of income for the month, they need to figure out the balance left after expenses. To do this, subtract the Total Monthly Expenses from Total Monthly Income. This is the amount leftover. They may find that the Total Monthly Expenses exceeds (is more than) the Total Monthly Income. In this case, they will need to assist the family to determine where expenses can be eliminated (removed). In other cases, the Total Monthly Expenses is less than the Total Monthly Income. In this case, the family has extra money beyond their expenses.

Let’s look at some examples of how to do this.

Example:

Total Monthly Income: $5,300

(-) Total Monthly Expenses: $4, 750

__________________________________________

Amount leftover: $550

In the previous case, there is $550 leftover after accounting for all the monthly expenses. This means the family has more income than expenses. Families can decide to put this money into savings in order to build up retirement savings, pay for future college expenses, save for a more expensive item, or to save for an unexpected cost.

Example:

Total Monthly Income: $6,250

(-) Total Monthly Expenses: $7,500

__________________________________________

Amount leftover: -$1250

In the previous case, the family is spending $1250 more than what their income is. Their expenses exceed their monthly income. They will need to make adjustments to their spending in order to live within their means.

Self-Check Activity M9-5

In the following example, does the family have enough income to meet their expenses?

Total Monthly Income: $3,500

(-) Total Monthly Expenses: $3,750

__________________________________________

Amount leftover: -$250

a). Yes

b). No

Check your answers!

Unit B: Ways to Make the Most Effective Use of the Family’s Finances

In addition to helping the family plan and work within a budget, Home Health Aides/Personal Care Aides can also help the family cut or reduce their costs. Costs can be reduced in many ways. We often do not even realize all the little things we can do to cut our costs. Saving a little bit here and there and cutting back even just a little add up in the long run to big savings! Here are some ways Home Health Aides/Personal Care Aides can help their patient and their family cut costs and things they can think about doing to help the family save money!

The following tips will help the Home Health Aide/Personal Care Aide assist the families with whom they work to save on groceries, household costs, and energy costs. You can view these and other tips to save on groceries and household expenses by visiting American Consumer Credit Counseling at: http://www.consumercredit.com/media/90298/SavebyCuttingBack-2013.pdf

How to Save on Grocery Costs

  • Pack lunches and snacks for work, school, and trips to avoid spending money on fast food or junk food.
  • Check expiration dates in the refrigerator and pantry and use items that will spoil sooner first.
  • Use grocery circulars, advertisements, and coupons to select foods that are on sale to prepare for meals.
  • Plan meals for the week and write a grocery list of items needed. Look through the refrigerator and pantry to see what items are on hand before buying them. Use those items to plan meals.
  • Make and stick to a grocery list while shopping to avoid spending money on extra items. Don’t shop on an empty stomach as you will be more likely to be unnecessary items.
  • Find protein sources in less expensive items such as dried beans and eggs.
  • Buy bulk items. Larger amounts tend to be cheaper, but don’t buy extra if it will spoil before you can use it.
  • Buy generic or store brands to cut your grocery bill.
  • Shop at large supermarkets or discount grocery stores rather than convenience stores such as gas stations as you will get better prices and sales.
  • Buy fresh foods when they are in season and incorporate seasonal fruits and vegetables into menu planning. Produce is cheaper when it is in season.
  • Avoid processed and already prepared foods as these are not only less healthy, but tend to be more expensive than foods you must prepare.

How to Save on Household Costs

  • Cancel unnecessary subscriptions to magazines, cable, and other services.
  • Find cost saving plans for combining utilities such as cable, phone, and internet services.
  • Pay bills on time. Many companies charge a late fee, which can add up significantly over time.
  • Work with a consumer credit agency to effectively manage debts and consolidate credit card debts.
  • Don’t use disposable paper products, such as paper plates.
  • Use cloth diapers instead of disposable diapers.
  • Buy clothes when out of season when stores discount them and shop at thrift or second hand stores.
  • Keep clothing in good repair to avoid having to replace it.
  • Look at store advertisements and weekly circulars to purchase cleaning and other household products that are on sale.
  • Take advantage of pharmacy discount programs, such as purchasing a 3 month versus a 1 month supply of regularly used medications. Oftentimes, these types of programs can help save costs on prescription medicine.
  • Use the generic brand of medication and over the counter medications when appropriate and after discussing this with a physician.
  • Purchase gas for your car at the least expensive gas station and when there are gas sales.

How to Save on Energy Costs

Energy can create a substantial cost to a household. The following and other energy saving tips for each room in the house can be reviewed by visiting NYSEG at: http://www.nyseg.com/UsageAndSafety/usingenergywisely/energywisechecklist/default.html

  • Use electricity during off-peak hours whenever possible. It is often less expensive to do wash and run dishwashers at night during off-peak hours, when energy use is generally low.
  • Lower energy bills by turning off lights in rooms when not in use or lowering or turning off the heat or AC when no one is home.
  • Use a programmable thermostat to control heating and cooling costs. Set the thermostat to 65-70 degrees during the winter and 58 degrees when no one is home.
  • Save energy costs by washing only full loads of clothing or dishes in washing machines and dishwashers.
  • Use the cold or cool setting whenever possible when washing clothing.
  • Check the lint screen in the dryer frequently. This prevents fires as well as allows the dryer to work more efficiently.
  • Don’t over-dry clothing in the dryer. Dry only for the amount of time necessary to get clothing dry. Whenever possible, hang clothing to dry on a clothesline.
  • Using energy efficient appliances whenever possible can help reduce costs.
  • Have chimneys, heating, and cooling systems inspected and maintained on a regular basis to ensure they are working efficiently.
  • Replace furnace or air conditioner ducts when dirty.
  • Use fans instead of air conditioners.
  • Use energy saving shower heads and faucets.
  • Take shorter showers.
  • Do not leave water running when unnecessary. Turn off the water while brushing teeth and in between washing dishes.
  • Defrost your refrigerator on a regular basis. Ice build-up increases the cost of energy as the refrigerator has to work harder to be efficient.
  • Open and close refrigerator and freezer doors infrequently and quickly. Plan for what you need prior to opening the doors.

By following these cost saving suggestions, making and sticking to a budget, and reducing debt, Home Health Aides/Personal Care Aides can help their patient and their family meet their expenses without having to feel anxious. Home Health Aides/Personal Care Aides should follow the Care Plan guidelines as to what ways they are expected to help their patient budget and manage money. Always document tasks completed and money that is spent. Whenever in doubt, seek guidance from a supervisor.

For more information, you can visit a resource such as the American Consumer Credit Counseling (ACCC) by following this link: http://www.consumercredit.com/. The ACCC is a company which specializes in consumer credit counseling, and which provides free and low cost services to assist people budget and pay off debt. Budget worksheets and cost calculators are available free of charge on this website.

Post-test

  1. True or False: Using a patient’s money in any way other than that directed in the Care Plan or for which they have specifically instructed you to do so is considered stealing and could result in losing your job or going to jail.
  2. Which of the following best describes income?
    1. The amount of money coming in to the household.
    2. The expenses that a family has.
    3. The amount of money in a person’s savings account.
    4. The amount of money a person owes after borrowing.
  3. A fixed income means which of the following?
    1. That people need to plan expenses to fit into the amount of money they make.
    2. That people can spend as much as they want regardless of how much money they make.
  4. Which of the following best describes debt?
    1. The amount of money coming in to the household.
    2. The expenses that a family has.
    3. The amount of money in a person’s savings account.
    4. The amount of money a person owes after borrowing.
  5. True or False: HHA/PCAs should never be judgmental about sources of a patient’s income and how they choose to spend their money.
  6. Figure out if the family has enough money to meet their expenses. Total monthly income=$1200. Total monthly expenses= $1700. How much money is leftover?
    1. -$750
    2. +$750
    3. -$500
    4. +250
  7. Which of the following are ways a HHA/PCA can help a family save money on groceries? Select all that apply.
    1. Encourage patients and families to pack lunches.
    2. Never use a grocery list when shopping.
    3. Purchase only name brand products.
    4. Buy food and supplies in bulk when space allows.
    5. Purchase processed, packaged, and foods from salad bars instead of foods that must be prepared.
    6. Use coupons.
    7. Plan meals for the week, using items that will expire soonest.
  8. Which are good energy saving strategies to reduce energy costs?
    1. Turn lights off in rooms when not in use.
    2. Clean the lint trap in the dryer frequently.
    3. Wash clothing using the cold setting whenever possible.
    4. Use fans instead of air conditioners.
    5. Turn faucets off while brushing teeth.
    6. Use a programmable thermostat.
    7. Wash only full loads of clothing and line dry clothes when possible.

Check your answers!

Self-Check M9-1 Answers:

1. False

2. False

3. True

FEEDBACK:

1. It is never okay to use a patient’s money for any purpose other than that directed within the Care Plan and by the patient.

2. It is never okay to borrow money from a patient or their family, even if you intend to pay it back.

3. Using a patient’s money in any way than that directed in the Care Plan could be considered stealing and is punishable by loss of job, fines, and/or jail time. The agency for which the HHA/PCA works can also face serious penalty.

Return

Self-Check M9-2 Answers:

1. True

2. False

FEEDBACK:

1. The amount of money entering a household is known as income. Income can be from a variety of sources such as pension plans, employment, and financial assistance from a government.

2. When people are on fixed incomes, meaning they have a set amount of money coming in to the household, they must be watchful of how much they spend. They should not spend more than the amount of money earned from income.

Return

Self-Check M9-3 Answers:

1. D

FEEDBACK:

Debt is the amount of money that a person owes after borrowing. Income is the amount of money coming in to a household.

Return

Self-Check M9-4 Answers:

1. C and D

FEEDBACK:

While some of these items are necessary, such as gas for the car, or groceries, other items such as gum and a lunch from a fast food restaurant are not necessary. These types of items can add up in the long run and are often items we forget about spending money on when we try to figure out where our money has gone!

Return

Self-Check M9-5 Answers:

1. B=NO

FEEDBACK:

The amount leftover after subtracting monthly expenses from monthly income is negative, or less than what is needed. Adjustments to spending will need to be made in order to live within this person’s means.

Return

Post-Test Answers

1. True

2. A

3. A

4. D

5. True

6. C

7. A, D, F, and G

8. All are ways to save on energy costs.

Return

References

American Consumer Credit Counseling. (n.d.). Household budgeting worksheet. Retrieved from http://www.consumercredit.com/media/53237/household_budgeting_worksheet_2013.pdf

American Consumer Credit Counseling. (2013, June 26). How to build savings by cutting back. Retrieved from http://www.consumercredit.com/media/90298/SavebyCuttingBack-2013.pdf

American Consumer Credit Counseling. (2015). Daily Expense Tracker. Retrieved from http://www.consumercredit.com/media/11395/dailyexpensetracker.pdf

American Consumer Credit Counseling. (2015). Debt-to-Income Ratio Calculator. Retrieved from http://www.consumercredit.com/media/11405/debttoincomeratio.pdf

Leahy, W., Fuzy, J., & Grafe, J. (2013). Providing home care: A textbook for home health aides (4th ed.). Albuquerque, NM: Hartman.

NYSEG. (n.d.). Home energy use guide. Retrieved from http://www.rge.com/MediaLibrary/2/5/Content%20Management/Shared/YourAccount/PDFs%20and%20Docs/13-0061%20NR%20Home%20EnergyUse%20Guide%20Sheet.pdf

NYSEG. (n.d.). Usage and safety: Heating and cooling. Retrieved from http://www.nyseg.com/UsageAndSafety/usingenergywisely/energywisechecklist/heatingandcooling.html

NYSEG. (n.d.). Usage and safety: Kitchen, bath, and laundry. Retrieved from http://www.nyseg.com/UsageAndSafety/usingenergywisely/energywisechecklist/kitchenbathlaundry.html

License

Icon for the Creative Commons Attribution 4.0 International License

Family Spending and Budgeting by Kimberly B. McLain, Erin K. O'Hara-Leslie, Andrea C. Wade is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.