Every stage of life has unique financial planning challenges. Young individuals and couples need to figure out how to start a retirement account and a college fund. Financial planning for many people in their middle years revolves around career progression, child-related expenses, and figuring out how much they need to save for retirement. Retirees deal with fixed incomes, Social Security payments, and estate planning.

But financial planning is most complicated for individuals and couples “sandwiched” between their own children and their aging parents. If you’re part of the sandwich generation, you may have to figure out how to support both your children and your parents. This is a complex situation that requires nuanced financial guidance from knowledgeable experts.

Navigating the Complexities of Multiple Finances

At Guiding Wealth, we know that financial planning often gets more complex as you grow older. This is especially true if you are juggling multiple financial realities: your own, your children’s, and your parents’.

Middle age is an important time in your own financial planning; it’s when you start finalizing your retirement goals and maximizing your savings. But if you’re like many people, you have to manage those issues while also keeping track of your children’s and/or parents’ finances.

Even if your grown children no longer live at home, you may be financially supporting them through a college fund or living expenses. Many grown children are also returning home in the challenging financial atmosphere created by a recession, rising living costs, an unstable job market, and the pandemic.

At the same time, you may be increasingly more involved in your parents’ or in-laws’ finances. This is especially common for people who serve as caregivers for aging parents, but it can also happen even if your parents are still living independently. 

Balancing Your Financial Responsibilities

If you’re part of the sandwich generation, financial management can be stressful. You may feel overwhelmed thinking about being responsible for your parents and your children as well as yourself and your partner. What if your parents need part-time or full-time medical care? Can you cover the costs while also paying for your child’s college tuition? Can you do it without cutting your own retirement savings?

Before you can answer these questions, it’s essential to figure out where your responsibilities truly lie. How much financial help do your parents or in-laws need? Do you have siblings who can contribute? Is your child going to need to live at home for a while? Take some time to talk with your spouse or partner to decide what your financial responsibilities are. Once you have this information, it’s easier to make a realistic and actionable plan.

Caring for Your Parents and In-Laws

Taking care of aging parents is a top concern for many middle-aged individuals. What this looks like for you and your spouse will depend on your exact circumstances: your parents’ and in-laws’ health, their financial resources, and where they live relative to you. It’s important to sit down with your spouse and siblings to discuss needs and plans for taking care of your parents if/when necessary.

Putting Your Financial Security First

While it may seem like financial planning as a member of the sandwich generation is all about your children and parents, it’s actually best to think about yourself and your spouse first. If you aren’t in a solid financial position, providing financial assistance to others can become stressful and unsustainable. 

Before you start writing checks for college or assisted living, make sure you understand your own finances and what you need to do to keep them secure.

Meet your financial commitments first

45% of parents gave their adult children money during the pandemic — and 79% of those people said those funds were meant for their own finances.

It may feel like you should focus your financial planning on your parents or children and their needs. However, it’s actually better to figure out your own finances first. Remember, taking care of your own needs isn’t selfish; it’s like putting on your own oxygen mask before helping those around you. 

When you meet your own commitments, you can remain financially stable while helping your loved ones. Plus, taking care of your own financial health can ensure that your children won’t need to sacrifice their financial security to take care of you later on.

Get hard numbers

To stabilize your finances, you need to calculate some real numbers. It’s impossible to know how much you can give your children or parents if you don’t know how much you need to keep for yourself and your retirement. 

Take the time with your partner and your financial planner to figure out your financial needs. How much do you need to save for retirement? What should your investment portfolio look like? Once you have definite numbers, you can make real decisions about how best to take care of those who need you.

Consider alternative living arrangements

If your parents or in-laws can no longer safely live on their own, you need to figure out a different solution. However, most elder care options are costly. Nursing homes and assisted living facilities can be prohibitively expensive, and even paying for a home healthcare worker may not be financially viable. 

You may want to consider some other options. Perhaps your parents or in-laws could come to live with you. Maybe you could find a new home that includes an in-law suite that provides additional privacy and independence for both you and your parents. Maybe your parents don’t need to live with you yet but should downsize to a condo or townhome that’s easy to maintain.


Finding Support From Your Community

Most members of the sandwich generation agree: it’s an extremely stressful place to be. The financial burdens of caring for multiple family members are just part of it. It’s also emotionally challenging to know that so many people are counting on you for significant support. Consider reaching out to coworkers, friends, members of your religious community, or online forums.

It’s often helpful to connect with a community of others who are in a similar situation. Having a group of friends going through the same thing can be helpful for everyone. It gives you a place to share fears and frustrations. You may even work together to help each other find new options for housing or care. 

Preparing for an Ongoing Conversation

Once you have some plans for taking care of your parents and in-laws, you can initiate the conversation with them. Remember that your parents’ cognitive abilities may be slowing down, and thinking about taking money from children is a concept that is very hard emotionally for many people. 

It’s better to think about building a supportive and evolving relationship with your aging parents than to plan on making all the decisions in a single conversation. Focus on patience, not efficiency.

Effective Financial Planning Is Often a Slow-and-Steady Process

Money management is a fluid concept that changes as you grow older and need to think about how to care for your aging parents along with your children. Even with the best planning, conversations can be challenging, especially if your parents or children aren’t willing to acknowledge their needs.

Here at Guiding Wealth, we help our clients through every stage of financial planning. We know that being part of the sandwich generation is tough, and our expert team is ready to provide helpful resources and personalized guidance. Download our free guide for reliable tips and expert advice on talking to your parents about money.