Moving someone into your home can be a financial drain, but it can also have financial benefits.

• Lighten your financial burden by having your family member contribute. Older adults often want to contribute to the household and can pay more than a nominal amount for food. Many pay rent if they can afford it, or pay for some or all of the renovations required to prepare your home.
• There's no single right or wrong way to handle finances. Your family needs to decide what will work best for everyone. Come to a financial agreement with your family member before making the decision to have him move in. This won't necessarily be easy, because money is an emotionally charged subject in most families. To avoid problems or resentments later, have open discussions about this up front.
• By pooling your resources, you might come up with a better living arrangement for everybody. Using the financial resources of both of you, you may be able to get a home that's much more comfortable than either of you could afford alone. "I know a number of people who bought a bigger, better house for everybody to live in together," says Schempp.
• Include siblings in the money talks. If you're receiving money from your family member, will your siblings agree with this, or will they object or resent it? Will your siblings help pay for the cost of care? Big financial issues often arise between caregivers and their siblings. "How are your siblings going to feel about you getting paid money that was eventually going to be their inheritance?" Schempp asks. "There's no simple answer. It's really about families talking and deciding what the agreement is going to be."

If you move someone in, it will probably cost you, both in dollars and lifestyle. A recent study by the National Alliance for Caregiving (NAC) and Evercare found that caregivers spend on average about $5,500 a year out of pocket to care for an aging relative. A smaller study by the NAC showed the numbers may be much higher: Those who lived with their parent spent almost $15,000 a year for care.

How do people afford it? The study found that most make sacrifices elsewhere:

• Almost half cut back on vacations and leisure activities.
• One-third dip into savings.
• One-quarter cut back on groceries and spending for their own health or dental care to help pay for their aging parent's care.