It takes a certain type of person to care for a loved one and expect nothing in return. And while it's certainly a commendable thing to do, providing care to a family member or friend could have one unwanted consequence: a cash-strapped existence for you.

The cost of caregiving

When we think about caregiving, we tend to imagine it as a huge time commitment. But it's not just time that caregivers ultimately end up forgoing; it's money, too.

An estimated 28% of working Americans have provided unpaid care in some capacity to a relative or friend, according to a recent report by the Employee Benefit Research Institute. Of those, 26% say that providing care has prevented them from saving money in general, while 22% claim it caused them to reduce their contributions to a workplace retirement plan. Furthermore, 23% of workers have incurred additional debt as a result of their caregiving.

Woman putting arms around older woman sitting in wheelchair


All of this makes sense. Many people have no choice but to cut their working hours in order to be caregivers. And if you start earning less, you might easily struggle to save and/or cover your own bills.

The same holds true if you're forced to spend a lot of money on travel to help out a loved one. For example, if the only way to reasonably get to a loved one's home after work is to do so by car, that's an extra expense you may be forced to incur -- and one that takes the place of the contributions you otherwise would've made to your 401(k) plan.

Clearly, jeopardizing your own finances is an unhealthy side effect of caregiving you don't want to face. If you're already in a situation where providing care is wrecking your finances, it's time to have some open, honest conversations about that impact.

Don't go it alone

Often, people wind up in caregiving situations because a loved one falls ill or needs help, and there's no backup plan to address it. If you're currently racking up debt or neglecting your savings in the course of providing care, talk about it. Chances are, you're not the only person responsible for looking out for the loved one in question. If, for example, you've had to cut back your working hours to care for an ailing parent, ask a sibling to help, either in the form of being there to share that load or by writing a check to bring in a home health aide a few hours a week so that you can get back to your job.

At the same time, talk to the person who's receiving care and ask what resources he or she has available. If you're spending money to provide care (say, by paying for travel or supplies), tell your loved one you need some help with the financial aspect. He or she might have savings to tap. Or, if your loved one has equity in a home he or she owns, a reverse mortgage might generate cash to help pay for his or her care. (Keep in mind that reverse mortgages have their drawbacks -- serious ones, at that. But if you're in a desperate situation, it's an option to consider.)

Caring for a loved one is a noble act, but be warned that it can damage your finances and cause you a world of stress in the process. If that's what's been happening to you, speak up about it. Enlisting other people's physical or financial assistance could be just the thing that saves you from financial ruin in the course of being kind.