If you’re a person in your late thirties, forties, or fifties who cares for children and your aging parents, you’re part of the “Sandwich Generation.” It also means that you have a lot of financial obligations on your plate. In order to make ends meet, keep your stress low and prepare for the future, you need to have a plan for balancing your finances. Here are 5 tips to help you take control.
Get to Know Your Parents’ Finances
In order to properly prepare for supporting your parents financially, you will want to first make a comprehensive list of their finances. Locate all their records, legal documents, bank account information and insurance policies, and make an inventory. Once you have that information, it should be a lot easier to have an open discussion with your parents about their finances.
Talk with them about their essential living and discretionary costs as well. You should get a clear picture of your parents’ expenses, income, and assets, so you know exactly what to provide for them now and down the road. Make sure to talk through the details as soon as possible. Don’t wait until a parent gets sick or there is a financial crisis to deal with.
Discuss Your Parents’ Health Care Options
It’s vital to discuss health care with your parents. Make sure you talk about their preferences for medical treatment, and start making a plan for how to pay for their care when they may no longer be able to take care of themselves. For people age 65 and older, there’s a high probability that they will require some type of long-term care. Get details on your parents’ health and long-term care insurance to find out if they have a good policy, and if they can afford to keep paying for it.
It’s also a good idea to protect your family by looking into life insurance in case something happens to you. Insurance can help with caring for your loved ones in the event you die or become immobile.
Make an Estate Plan for You and Your Parents
As part of the Sandwich Generation, it’s important that you have a basic estate plan in place for yourself and for your parents. Estate planning can help ensure that family money and assets are passed down to the right people. Gather important documents such as wills, trusts, health care proxies, and powers of attorney so that all your parents’ wishes and goals, as well as your own, will be met.
Don’t Neglect Your Retirement
With all the responsibility you have to your parents and your children, it’s easy to forego your retirement plans, or to dip into your nest egg to support them. But sacrificing your retirement money means you’ll likely depend on your children for financial support when you retire. Break the wheel by saving money for yourself. Many people try to save at least 70 to 90 percent of their yearly income for every year of estimated retirement, so make some calculations to determine what you think you might need. Once you have a target, you can work toward building your nest egg. If you aren’t sure how much you need to save for your own retirement, you could talk to a financial professional.
Get Help if You Need it
If you are having a difficult time wrapping your head around all the financial responsibilities you have in your life, consider talking to a financial professional, who can help create a plan and guide you down the right path. If your day-to-day caregiving responsibilities become overwhelming, you may also want to explore ways to get some assistance and lighten the load. Talk to your relatives about helping out, or consider hiring in-home care to help you get some balance in your life.