Caring for another person requires a great deal of emotional and financial currency. Those included in the “sandwich generation” know this all too well. The sandwich generation refers to a group of people who are tasked with caring for aging parents as well as financially dependent children, mostly people in their 40s and 50s. This group becomes “sandwiched” between the other two groups who both require financial and emotional support. 

Between medical bills, long-term care needs, college tuition, and emotional labor, the sandwich generation takes on its fair share of stress often leading them to forego their own financial wellness in order to support the family around them. 

While many people experience conflicting financial priorities, this generation has many added pressures that can take a toll on their emotional and financial wellness. Today, our team wanted to bring a post that talked about a few ways the sandwich generation can prioritize their own finances and set themselves up for financial and personal success.

Clean the financial house

A Pew and Research Center study found that one in seven people in the sandwich generation provides some financial support for both aging parents and adult children. As you balance your personal finances along with that of your parents and children, it is important that everyone be on the same page and that starts with financial transparency. Let’s start with your parents.

Make a plan for caregiving

While it may be difficult to broach financial topics with your parents, it is important to have these conversations so you are all aware of the financial and practical aspects that come along with caregiving. This includes what the bills are and how they are being paid for. If you haven’t had these conversations yet, now is a good time to start asking questions:

• Do your parents have a pension? 
• How much have they amassed in their retirement accounts? 
• What is their monthly Social Security benefit? 
• Do they have long-term care insurance? 
• What type of care do they need? Will you require outside or professional help as things develop?
• How can you and your family divide responsibilities?

These questions will help you and them create a plan for financially paying for their care. 

According to a recent AARP report, over 41 million people provided unpaid caregiving labor to a family member or loved one totaling about 470 billion dollars in value across 34 billion hours of care, with a majority of that care provided by women. This study highlights the integral role that caregivers play in our society. 

Since these caregivers are often family members, they juggle dual responsibilities of full-time or part-time work as well as spending 20 plus hours a week caring for their loved ones. If you find yourself in this position, it is especially crucial for you to talk with your parents and spouse about it. Knowing how you will divide daily responsibilities like food and activities and financial responsibilities like medical bills and nursing needs will help tremendously.

Establish a pattern of financial independence for kids

While you are juggling work, home life, and caregiving, it is important that you start to set some clear boundaries with your adult children. Many children need assistance with college costs or living expenses after graduation and parents are more and more willing to provide it. But be sure that you aren’t sacrificing your retirement savings and other long-term savings goals to pick up their rent or give them additional spending money. 

There are so many different ways to encourage this and one could be having your kids pay rent if they are living with you and have a job. Another way could be for them to take on some of the caregiving responsibilities to lessen the burden on your shoulders. Again, these conversations may not be easy, but by approaching them in an honest, caring, and transparent way you will be more likely to have a productive and positive outcome. 

Don’t forget about your retirement savings

With so many responsibilities swirling around you every day, it can be really easy to skip out on your retirement savings. It may start with reducing contributions or even dipping into retirement accounts to cover medical bills or education costs. This really isn’t a good idea. 

Remember, your retirement savings is about you. You will need those funds to survive when you retire and with the need to replace nearly 90% or more of your income with personal savings, many people can’t afford to delay compounding their retirement balances. 

It may seem like other responsibilities should come first, especially given your day-to-day pressures, but your retirement savings should come first followed by your other expenses. Be sure you are contributing at least enough to qualify for your employer match, should you have one, that way you aren’t leaving money on the table. If possible, try to max out your 401k savings each year, $19,500 for 2020 as it boosts your savings and decreases your taxable income. 

You don’t have to stop at your 401(k). Once you contribute the maximum to that vehicle, you can move on to your traditional or Roth IRA. You can also look at increasing the amount you are investing in order to maximize compound savings measures.

Prioritize with intention

As much as you may want to cover all of yours, your parents, and your children’s expenses, odds are that won’t be able to happen. In that case, it will be necessary for you to make a list of financial priorities and do your best to stick to that plan.

Your first financial priority needs to be your retirement savings. But after that, it is up to you and your unique situation. Once you are on track for retirement, perhaps you want to help fund your kid’s 529 plan or contribute to another long-term savings goal. 

Part of prioritizing also comes with setting your own boundaries. Caring for multiple generations can cause a strain and you should set boundaries to protect your emotional and mental wellbeing. Boundaries are healthy and will be important as you move forward. 

No matter how you set your priorities, be sure to do it with care and intention. When your financial actions correlate to your goals and values, you will have a better chance of sticking to them and being able to explain them to others who you may be caring for. 

Enlist the help of others

No one can handle a three-fold financial pressure on their own. It is important that you seek out help both personally and professionally when you need it. With your parents, perhaps you and your siblings can work out a plan to cover daily care as well as split on-going medical expenses that insurance or benefits won’t cover. 

You may need to look into government programs that can help or also professional caregiving at least part-time in order to establish healthy boundaries in your own life. Your financial planner will be another great resource during this time as they will be able to help you with your own saving measures but also other financial things like tax savings to make your plan more holistic and representative of your unique situation. 

Take time for yourself

The sandwich generation spends a lot of time caring for and thinking about others. It is so easy to lose yourself and put your own needs on the back burner. Try to be conscious of when you do this and make a plan to actively avoid neglecting your own needs, both in terms of your finances and your mental health. 

Taking care of yourself can be done in small, intentional ways every day like going for a walk or taking an exercise class or calling your best friend or spending time in meditation. Whatever it is for you, make time in your day for yourself. You won’t regret it. 

Our team at Goepper Burkhardt works with people who are in the sandwich generation all the time. We are dedicated to helping you balance your financial priorities in a way that keeps you on track to reach your goals. Ready to recommit to your financial wellness? Set up a time to talk with our team today.