How The Sandwich Generation Can Take Control Of Their Finances
Do you feel like you are stuck between caring for your aging parents and supporting your children? If so, you’re part of the sandwich generation, and you’re not alone.
According to Pew Research Center, nearly 12% of parents fall into this category—mounting stress and bills at a rapid rate. The same study also found that people in the sandwich generation experienced more financial and emotional challenges than those who were not part of that group.
Intergenerational finances bring immense challenges like navigating your financial health and also carrying the financial and emotional weight of your children and parents. Bienvenue Wealth is here to help. We built our practice to help Gen X maximize their resources and achieve a life of financial security and independence.
The road to financial freedom for the “sandwich generation” may be riddled with tough conversations, a large dose of patience, and lots of organization, but we’ve got your back.
The Sandwich Generation Must Prioritize Financial and Personal Wellness
Getting caught in a web of external priorities often leaves your personal well-being on the back burner. The first step to taking control of your money is to put your plan front and center. On the surface, prioritizing yourself may seem selfish. The uncomfortable truth is that without a solid foundation for you and your future, it will be extremely difficult to help those around you.
- Are you saving enough for retirement?
- Are you allocating adequate resources to properly save for other long-term goals like travel and housing?
- What do you need today to live your ideal life?
- Are you making room for your personal passions (now and in the future)?
Even though it’s challenging, those in the sandwich generation need to learn how to prioritize themselves. It might be easy to think that your children will gladly take care of you in retirement, but it would be better to not rely on that option. Many parents wouldn’t want to place this burden on their children. There’s no loan for your retirement plan, so take care of your needs before you extend more financial assistance to others.
Discuss and Tackle: Your Parents’ Retirement Plan
Conversations about intergenerational finances aren’t necessarily considered a fun Friday night activity. With that said, it’s not something you can just ignore. Strike up the conversation with your parents about their retirement plan.
- Do they have a plan for long-term care needs?
- What are their expectations about your role in their care?
- Do they have an estate plan in place?
- How do they manage their digital assets (i.e. passwords, logins, etc.)?
Many parents don’t want to burden their children as they age, let alone dive into the inner-workings of their finances. Think about it from their perspective—how comfortable would you be talking with your children about the nitty-gritty of your retirement and estate plan?
These conversations might not come naturally, but they are critical to understanding everyone’s future needs and expectations. You don’t have to cover every aspect of your parent’s plan in one sitting. Let this be an ongoing conversation so you can both set honest, clear, and realistic expectations for the future.
When it comes to financial conversations, keep them open, honest, transparent, and judgment-free. The more you can do that, the more likely you’ll all come to a fair outcome.
Discuss and Tackle: Childrens’ Financial Responsibilities
When you’re in the sandwich generation, you and your kids must be on the same page with money and finances moving forward. It’s important that both of you set clear financial expectations and boundaries.
When they’re younger, they don’t need to understand every detail but they also can’t be completely in outer space. Without some level of understanding, your children may expect too much from you (leading to arguments and tensions).
So how can you instill a sense of financial responsibility into your children? Let’s take a look at a few ideas.
Talk About Money Early and Often
Money is an essential topic, one that you can start teaching your kids about quite early. Your lessons can advance as they get older and include elements like bank accounts, credit cards, investment accounts, saving vs spending, goal setting, and other foundational items. As we all know, our education system does not do a great job of teaching us about personal finance. Embrace this task NOW for your children’s sake.
Learn the Value of a Dollar
As your kids get older (about teenagers), make sure they understand that money doesn’t grow on trees. Consider having them pay for certain items they really want. For example, maybe they want a $150 baseball bat. You could have them do chores around the house or get a part-time job to pay for it. There are several ways to go about this process. The most important thing is that your kids begin to understand how to earn money and the value that comes along with it.
Treat Each Moment as a Learning Experience
Money isn’t straightforward and there are times when we get it right and other times where we make mistakes. It’s important to work with your kids through both good and bad decisions. Be sure to acknowledge when they make a great financial choice, learn a new skill, or set a new goal for themselves. On the flip side, turn any mistake that they might make, like a rushed purchase, into a learning experience.
Set College Expectations
It’s no secret that college is a big-ticket item. Giving the gift of education to your children is incredible, and you should keep these two ideas in mind:
- Set expectations and boundaries
- Don’t sacrifice your retirement savings
Talk with your children about what you reasonably can and can’t pay for. Perhaps you can cover tuition, room and board, and supplies (which is amazing) but they might have to save up to finance their dream summer abroad or other travel expenses. No matter what your arrangement is, be sure you continue to save for your retirement.
The Sandwich Generation Doesn’t Have To Go It Alone
When push comes to shove, you simply may want someone in your corner to help you manage the overwhelming burden of caring for elderly parents and supporting your children.
There are friends, loved ones, family, caregivers, and many others who can help you with various circumstances faced by the sandwich generation. At the very least, having an unbiased 3rd party to bounce ideas off of and even vent to can help reduce stress.
On the financial side, Bienvenue Wealth prides itself on helping the sandwich generation balance personal financial prosperity and caring for their loved ones. We want to help you organize your extensive list of priorities and implement an actionable strategy towards your goals. Book some time with our team today and learn how you can benefit from a financial partnership.