Everyone wants the freedom to live their own life. But for the sandwich generation, this is easier said than done. Having a family can put a serious dent in your budget. Add taking care of elderly parents to the mix and you find that balancing your family and financial obligations is ten times harder. These budgeting tips for the sandwich generation will help you get through this.
As someone in the sandwich generation, you know just how hard it is to raise children while also taking care of your aging parents.
One of the best ways to manage and come out on top is through effective budgeting. Keep reading to learn money tips for the sandwich generation.
1. Be Open & Set Boundaries with Your Parents
Though it can be hard to have tough conversations with those you love, these talks are a must. While you want to support your parents in any way possible, it’s important to balance your own health, happiness, and finances while doing so.
Talk to your parents about what makes the most financial sense and help them plan their budget. If one of their wants simple isn’t feasible for you, such as moving into your home, it’s okay to say no.
Discuss the financial impact and discuss other housing options that are affordable and safe.
2. Boost Your Emergency Fund
Planning for the unexpected is a must. From unforeseen medical expenses to car or home repairs, it’s best to be ready for the worst to happen just in case it does.
Being sandwiched requires financial preparation. The best way to plan and prepare is by having a healthy emergency fund.
Make sure that you have at least 6-9 months’ worth of expenses saved. This way you can cover any unexpected expenses while also having peace of mind if you lose your job.
If feasible, encourage your parents to start aggressively saving as well.
3. Set Up a College Savings Plan
Odds are that you want your children to go to college. And while there are scholarships and grants to help offset the cost, it never hurts to set up a college savings plan as soon as possible.
By saving when your child is still young, you have years to plan, which means years of compound interest and growth. There are many ways to save for college, including:
- 529 Plan
- U.S. Savings Bonds
- Coverdell ESA
- Roth IRA
- UGMA/UTMA custodial accounts
Start saving now, and by the time your child is 18, you’ll have a lot less stress.
4. Keep Saving for Retirement
Dealing with financial obligations and responsibilities from all sides makes it all too easy to put yourself on the backburner. While you want to take care of your family and your parents, don’t forget about your own needs. Check retirement account options as early as you can.
At this stage of life, you’re likely planning for your own retirement and thinking of how you want to live out your golden years. To give yourself some financial stability, continue to contribute to your retirement savings.
Maximize your earnings by contributing as much as possible, diversifying your portfolio, and taking advantage of any employer matching.
Taking care of your own family while taking care of your parents is no easy feat. However, with these budgeting tips, you’ll find that you can lead the life you want without feeling overly burdened or pressured.