The Sandwich Generation

Those lucky Baby Boomers. With aging parents and adult children still living at home, they are literally being sandwiched without much space left in the middle for their own concerns. While a crucial contribution and one you would never give up, if this applies to you, in all likelihood, your finances, time resources and brain space will be stretched. Here are some coping strategies, both financial and otherwise.

Strategise

Your care responsibilities are not something you can easily give up. So, accepting that you are likely to be stretched in two directions, strategy and planning will be your saving grace. The two groups you will be caring for- the aging and children- have dramatically different needs. They are likely to both require forms of financial support at some stage, you need to set-up your budgets so the additional financial expenditure isn’t going to hamper your long-term financial stability. The best approach would be to discuss your parents’ financial situation with them and get some expert advice as to how best set them up over the remaining years of their life, including compensation for you should you be housing them or paying for their care. Don’t delay your own financial goals in order to accommodate the extra strain on your income. Make allowances for any lost income you might incur in order to care for your parents or children.

Budget And Be Clear

Once you’ve looked at your finances and set up your budget, it needs to be discussed with your parents and your children. If you’ve taken a role as primary carer of your parents, you need to discuss with your siblings what your financial exposure will be and what contributions you will expect from them to help care for your parents properly. Ensure that your parents have long-term care insurance and investigate whether or not they have any health insurance. Without a doubt, if you are intending to eventually move your parents to a nursing home, you need to start putting their names down now. The same goes with your children- it will do them no favours in the long run if they live adrift of financial consequences, and you consistently wear the cost of their lifestyle. Beyond which, it might have severe financial consequences for you in the long-term.

Dos

Do set up power-of-attorney. Do ensure all wills are updates and that all healthcare directives have been addressed. Consolidate your parents’ assets so you have an understanding of how far their money will go towards assisting their care. Do set-up savings plans for your kids, bolster your emergency fund and continue to save.

Donts

Don’t dip into your retirement savings in order to finance your parents or children. Don’t increase your debt to wear the extra income. Don’t excuse your siblings from their responsibility to their parents, as divisive as that may be. Don’t let your children stay at home if it’s sending you broke- discuss with them how they can finance themselves in your home. A lot of it is hard. A lot of planning, a bit of time for self and forward-thinking will be what steers you through.

Related Posts

• How the GFC has affected Generation Y and their money

  At lunch today, a friend was telling me how this was her year to save. She said how it was lucky, because her new attention to finances seemed to be reflected by most of her friends. No one was suggesting expensive outings or throwing their money around as everyone felt the same way about spending; [...]

• The Truth About Generation Debt

  It seems like all we talk about these days is Generation Debt. But is that the truth of our generation? Read on for some mythbusting about Generation Next and money.

• The Inheritance That No Longer Exists

  My younger brother, a keen saver from the times of infancy, sat in dismay at about eight years of age at the thought that all my parents would leave us would be their debt. He may not be far wrong, and according to an article by Ian Cowrie in the UK Telegraph, we wouldn’t be alone in that. Two thirds of adults expect to inherit money, while half of those aged over 50 are already spending the money they would have thought to have left their children.

• Living On One Income

  For many families, the decision to live on one or two incomes is an arduous and difficult one. Unfortunately, it’s also the kind of decision that seems to draw a lot of censure, irregardless of what decision you actually make. If you should be thinking of moving to one income for your family, here are some tips, drawn from MSN Money, on how to make it work.

• Generation Y: A Guide to Personal Finance

  Listen up Gen Y! I know we’re young, I know we think we’re hip. The whole world is in front of us, and immortality is a pretty common feeling. But there’s some bad news floating around the horizon, and we better prick up our ears and listen or the bad news is going to get [...]