People with kids still at home and aging parents who need care may struggle with strains on their budgets. Here’s what you can do to keep your finances balanced.
The term “sandwich generation” was first conceived in the early ’80s to describe people who were caring for both their own children and their parents. Today, nearly a quarter of U.S. adults call themselves members of this group, with Americans in their 40s most likely to have a minor child or an adult child they’ve helped with money and a parent age 65.
While that dual caregiving may stress family’s emotions and time, it also stresses their finances. According to a Wealth Watch survey, half of sandwich generation adults cite caregiving costs as the reason they couldn’t cover rent, groceries, medical care, or other essentials. And in multi-generation families, 73% report spending an average of $500 per month, often leading to trim elsewhere including retirement savings.
These increases can impact your budget and your own long-term financial health. How can you help the family members who need you most and still keep your finances in order?
Often, our instinct is that we don’t want to trouble others, or ask directly for what we need. But during times of great need, the people who love you most will want to help if they can. That may include family members, if you have them, or friends, too. Having help even in the form of just a few hours a week, or a few trips back and forth to doctors appointments, may help you defray your costs.
It can be hard to balance the sense of obligation you feel to help your elderly parents, while you factor in how your decisions will impact you and your children, both now and when they become your age. However, when it comes to saving for your post-work years, “there are tradeoffs to everything, but retirement really is on you—you can’t necessarily count on anyone or anything else,” says Stanley Poorman, financial professional with Principal®.
To protect your savings and take care of your children and parents, spend some time with your budget. Are you spending differently? What are you spending more on? What are you spending less on, and could some of that money be directed toward caregiving costs? Where might you be able to decrease other spending? You may also want to familiarize yourself with assistance and other programs to see if you or your parents qualify for aid.
A financial professional and tax preparer may also be able to advise you on additional benefits you may be eligible for as a result of your changing circumstance, tax implications of your caregiving obligations, and revised strategies to continue to meet your financial goals. For example, it’s possible a family member may now be eligible to be considered a dependent. It can be hard to ask for help, but prioritizing your financial future matters, too.
Article previously published on HerMoney.
