Home / Career & Money / Family Finances & Budgeting Money management tips for the sandwich generation Ivan Haidutski/Stocksy This is a crucial part of financial planning: Talk to your parents about their final affairs before they pass away. By Thea Theresa English April 16, 2024 Ivan Haidutski/Stocksy Rectangle The sandwich generation consists of people between their thirties and fifties who are not only caring for their children but are also caring for their aging parents at the same time. In addition to this, these adults are not only supporting their underage children and aging parents but also their adult children and sometimes grandchildren. According to a 2018 report from the Pew Research Center, have a child younger than 18 at home, and 12% of these parents provide unpaid care for an adult as well. Related: 7 essential money lessons to teach your kids The sandwich generation also consists of grandparents who have full custody of their grandchildren. In some situations, older Americans are postponing retirement because of these financial obligations. 9 smart money management tips If you’re also a part of the sandwich generation, here are a few ways to build a strong financial future. Talk with your parents about their financial situation One thing you can do is talk to your parents about their financial situation. Look over their current assets, debts and expenses. Help them create a budget where they’re able to track how much money comes in and how much money they’re spending. Encourage them to increase their savings so they’ll have funds for emergencies. Ask them about their healthcare plan and which medications and services the plan covers. It also helps to discuss what you can and cannot do for them financially. This helps you set healthy boundaries with your parents regarding your own finances. Revise your budget If you will be responsible for paying some of your parents’ bills, you’ll need to revise your budget to accommodate these expenses. If you’re working fewer hours because of your caregiving duties, look for ways to cut back on unnecessary expenses to keep your spending under control. This could mean saying no to your adult children’s financial requests. Teach your kids important life skills While your kids are home with you, teach them important life skills that will make them self-sufficient. Talk to them about personal finance topics such as budgeting, emergency funds, investing and how to avoid credit card debt. If your kids are teens, encourage them to get jobs so they can earn their own money and learn to manage it wisely. If they blow their check by spending it carelessly, don’t rush to their aid by bailing them out financially. They need to experience these mistakes so that they will do better next time. Related: Breaking the generational cycle of poverty: Why safe and affordable homes are essential for children’s future Utilize your workplace benefits Don’t neglect your workplace benefits when managing money for yourself and your immediate family. Contribute as much as possible to your employer’s 401K. That also means using your paid time off as often as possible during the year to tend to your aging parents’ needs such as errands, doctor’s appointments and housekeeping tasks for them. Purchase life insurance If you’re caring for both aging parents and children, purchase life insurance. Life insurance will provide your loved ones with the funds for your funeral and burial expenses as well as any other expenses associated with caring for those you left behind. Term life insurance is the most affordable type of life insurance. You purchase a policy for a specific number of years and if you pass away before the policy expires, your survivors will receive the benefits. Don’t enable your adult children financially One thing you shouldn’t do is enable your adult children financially—especially if they are able to find work. Instead, assist them with preparing resumes and cover letters or offer advice on how to find (and keep) a job. If they refuse to be self-sufficient, draining your savings and retirement income to fund their lifestyle will only create an unsustainable, negative cycle. Talk about estate planning with your parents This is a crucial part of financial planning: Talk to your parents about their final affairs before they pass away. Help your parents prepare their will, look over their life insurance policies to understand who the beneficiaries are and where the policy will be located in case you need it later. If necessary, talk to your parents about designating you or a sibling to be their power of attorney. Related: Building an emergency fund: A how-to guide Consider a living trust A living trust is an account where you transfer your assets. Your beneficiaries would receive it upon your death. While you’re alive, you’re the trustee but you’ll need to appoint someone to become the trustee after you pass away. This is the person who will distribute assets to your beneficiaries. You can put stocks and bonds, personal items, savings accounts and checking accounts in a living trust. One main benefit of a living trust is that your survivors can avoid the probate process and your beneficiaries will receive their funds without much hassle. Encourage your teens to apply for scholarships Encourage your teens to research and apply for scholarships and grants. By doing this, they reduce your financial burden for their college education and you can focus more on saving for retirement and enjoying your later years without much debt. Related: Here’s how to practice ‘loud budgeting’ with your kids—from a family finance expert The sandwich generation is here to stay but with these financial tips you can care for your aging parents and growing children effectively, without sacrificing your financial future in the long run. This story is a part of The Motherly Collective contributor network where we showcase the stories, experiences and advice from brands, writers and experts who want to share their perspective with our community. We believe that there is no single story of motherhood, and that every mother's journey is unique. By amplifying each mother's experience and offering expert-driven content, we can support, inform and inspire each other on this incredible journey. If you're interested in contributing to The Motherly Collective please click here. 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