4 Budgeting Tips for the Sandwich Generation

Protecting your financial health during this chaotic time of economic uncertainty is challenging enough. But if you happen to be sandwiched between your aging parents and adult children, your budget, time, and emotions are stressed to the limit. Juggling your financial priorities requires unique strategies. Here are four budgeting tips to help you.

Who is the Sandwich Generation?

The “sandwich generation” is caring for parents 65 or older while also raising growing children or supporting adult children. According to demographics, roughly 45% of adults aged 40-50 have parents 65 or older. However, the most pressing reality today is the number of post-college young adults who have returned home. According to the Pew Research Center, the percentage of 18-29-year-olds living with their parents rose to 52% in July.

Unique Financial Challenges

As parents, you already have your plate full with the challenges of balancing home and work, advancing your career, and raising your children. If you’re sandwiched between your aging parents and adult children, it can feel like you’re juggling three full-time jobs. Your financial responsibilities are magnified.

Yet, at the same time, you can’t afford to ignore yourself. Protecting your financial health is paramount to reducing the money stress you face from caring for multiple generations.

Four Budgeting Tips for the Sandwich Generation

1. Review Your Budget and Financial Plan

A financial plan and operating budget are imperative right now. Determine fixed expenses that are independent of your parents, grandparents, or adult children. Then factor in costs related to the support you are providing for your parents and adult children.

Identify expenses that can be covered differently.

  • Do your parents or grandparents have savings, pension, or retirement income that can be used to offset some of the expenses you’re covering?
  • Are there non-profit or government agencies that provide financial or long-term care support?
  • Can your adult children share in the total household budget? Perhaps they can contribute to the rent and groceries and pay their bills, streaming services, and cell phone provider.

You should review your budget and financial plan every month, making adjustments that enable you to stay on track with your financial goals.

2. Keep Saving for Your Retirement

In general, Americans are underfunding their retirement accounts. If you’re in the sandwich generation, saving for retirement may appear to be an impossible dream. With all you have going on, it’s easy to put it on the back burner. However, it’s essential to take care of yourself too, and this includes your financial future.

If you have an employee-sponsored retirement account 401(k), make every effort to contribute the maximum amount. Your employer’s match will help you reach your retirement savings goals.

Automatic deductions can help you deal with the temptation to de-prioritize your retirement in the face of conflicting demands from children and parents.

3. Build Up Your Emergency Savings Account

Now more than ever, you need an emergency savings account. Try to put aside enough to cover three months of household expenses. Whenever you have extra money, pay off a bill, or receive an increase in income, put that money right away into your emergency savings account.

4. Automate Your Bills

It’s easy to lose track of essential bills such as your mortgage, car payment, or loans. Falling behind will cost you more money and harm your credit score. Rather than relying on memory or on when you have time, automate all your bills.

Bottom Line

If you find yourself in the sandwich generation, you’re not alone. There are many resources to help you create a robust financial plan. Keep the lines of communication between you, your parents and, your children open. Discuss the money situation and be clear about what you can handle. And don’t forget to take care of yourself, financially and emotionally.