Sandwich generation: financial survival tips


The so-called “sandwich generation” finds itself in a unique and challenging position as its members balance financial support for both aging parents and children while managing their own financial goals.

The pressure this generation faces can lead to personal and financial stress, resulting in less retirement savings, difficulty paying bills, or overwork as they are forced to take on a second job to make ends meet.

Below, I will provide some practical advice to help those of this generation who feel stuck or unable to move forward with their personal financial goals.

What is the sandwich generation?

According to Corinne Rusch-Drutz, director of the Toronto-based Kensington Health Foundation, the sandwich generation is made up of people who are caring for children under the age of 15, as well as elderly or sick parents.

However, this could also be extended to parents with adult children living with them who are balancing providing room and board for their working-age adult children while also trying to financially support aging parents.


Who is most likely to belong to the sandwich generation?

A recent Statistics Canada report found that people aged 35 to 44 are most likely to be sandwich caregivers, followed by those aged 45 to 54.

People between 30 and 40 years old are more likely to have teenage or cohabiting adult children, as well as parents over 65 years old.

Thanks to advances in medical and healthcare technology, many over 60s remain healthy and working. This is one of the reasons why the average retirement age has increased from 60 to 65 in the last two decades.

That said, even seniors who still work part-time may need financial assistance or regular physical assistance that can keep sandwich caregivers away from their careers and full-time jobs.

Even seniors who work part-time may need occasional financial or physical support. This can take sandwich caregivers away from their full-time jobs or careers to provide needed help.

Challenges facing the sandwich generation

For many, sandwich caregiving means higher living expenses, limited retirement savings, and a constant push and pull between work and family commitments.

Of those surveyed by Statistics Canada, 86 per cent of sandwich caregivers say their position has affected their overall health and well-being. Some of the most common challenges this generation faces include:

● Difficulty saving for retirement due to increased financial obligations.

● Personal stress due to work-life balance.

● Burnout due to overwork or balancing multiple jobs to provide

● Less personal time for hobbies, health or recovery.

Practical Financial Survival Tips for the Sandwich Generation

Do you feel like you are burning the candle at both ends? Here are some practical tips that sandwich caregivers can use to regain some financial control and peace in their lives.


1. Encourage your children who live with you to contribute to the bills.

If your high school teen is old enough to work, encourage him or her to get a summer or weekend job to help take care of personal expenses or needs. Not only will this give them valuable life experience and teach them how to manage their money, but it also means you won’t have to foot the bill for their weekend activities.

If you have an adult child over the age of 18 who lives with you and is not a full-time student, you should encourage them to pay a portion of the household bills. This means charging them a few hundred dollars a month for their room or asking them to contribute to grocery, electricity, water, or internet bills.


2. Explore government benefits and tax credits

Government tax credits and benefits can also be a good way to put extra money back in your pocket. For example, parents who care for children can receive Canada Child Benefit. Those caring for elderly or ill parents may also qualify for the Canada Caregiver Credit.


3. Buy wholesale food for the whole family

If you are buying food for your children, yourself, and your elderly parents, consider purchasing wholesale food from wholesale stores to help you save on your expenses. Once you bring the groceries home, divide it up and ask for contributions.


4. Prioritize your retirement savings

Don’t let feelings of guilt make you deprioritize your own retirement savings. After all, you are the only person capable of taking care of yourself.

Even though you can give more to your children or parents, make sure you continue to prioritize your retirement savings. One day, you will no longer be able to work and you will need these savings to pay bills and take care of personal expenses.


5. Reduce your lifestyle costs

This goes hand in hand with the advice above about prioritizing retirement savings. If you have to cut back on spending in one area of ​​your life, it shouldn’t be the amount you save for retirement. Instead, you should increase your retirement contributions and decrease your lifestyle costs.

This could mean:

  • Trade in your vehicle for a more affordable/reliable one.
  • Go out fewer times a month.
  • Reduce costly habits like drinking, smoking, or compulsive shopping
  • Reduce your entertainment subscriptions
  • Savings and buying second-hand.


6. Set personal boundaries

To prevent stress from affecting you and maintain peace of mind, it is important to establish personal boundaries. Talk to your children and parents, be honest about your situation and ask them to empathize with you.

You don’t have to stop helping them, but from time to time you have to be willing to say “no” for your benefit and, ultimately, theirs. At the end of the day, you’re no good to anyone if you’re exhausted, stressed, and teetering on the edge of a financial cliff.

Preparing to be a sandwich caregiver

As children live at home longer and medical advances allow older generations to live longer, I believe sandwich generations will become even more prevalent in the future.

Even if you’re not part of the sandwich generation yet, you should start planning for it, especially if you have kids now or are planning to start a family in the near future.

If you can, start setting aside extra money for retirement and emergency savings now so you can sacrifice more in the future if necessary.


Christopher Liew is a CFA holder and former financial advisor. He writes personal finance advice for thousands of daily Canadian readers at Blueprint Financial.



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