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Lowering the stress from being in the sandwich generation

For those with kids and living parents, financial pressures could very likely come from both generations sometime in the future, hence the term of being a member of the sandwich generation.  Planning now can help lower the possibility of this becoming a stressful financial situation. 
 
What can make this situation so stressful?
Not being prepared and having a lack of knowledge are the two biggest reasons for stress from multi-generational family finances. For most of our lives we probably have not ever had a true, in depth conversation with our parents or in-laws about their financial situation.  The concern is that without this knowledge, we can be caught off guard and not really have any time to plan for any issues that may arise.
 
What types of discussions are important to have with your parents or in-laws?
First and foremost is a discussion of finances.  This includes determining if they have the sources of income to last for their life expectancy and the insurance to cover any medical expenses that might occur. A second important discussion should be about their health condition because difficult medical conditions can often lead to financial hardship.  Helping them plan through these issues are very important.
 
What are some of the more difficult discussions to have with parents or in-laws?
Probably the two most difficult are the discussion of estate planning documents and finding out what they want regarding their final arrangements.  No one really likes to talk about these plans but knowing them is important.  It is the only way you can help make sure their final wishes are meet and that they are financially prepared for paying for those wishes.
 
The other side of the sandwich then is your kids, how can you get them involved?
It starts with involving your kids in your financial matters and modeling good financial habits. These early lessons can help them understand the importance of making smart financial choices all through their life.  Also, having them help take care of their grandparents by doing little things like having them help with transportation can be meaningful for all involved.
 
Are there important situations to discuss with your children?
There are a couple of key discussions. First, be clear on your financial commitment to their education so that they pick a school that is affordable based on the financial resources available.  Secondly, when they are starting out on their own, make sure they are making the right choices with health insurance and their own saving habits.  Getting them started saving in a 401k or other retirement planning options is vital important at an early age.
 
What are some of the pitfalls for the people in the middle?
It is very easy for the people in the middle to spend so much time with both sides that they neglect their own financial situation, specifically developing a plan for retirement.  They are then caught playing catchup or perhaps even have to lean on their own kids when they get to retirement.
 
What would you give as the top three things for those in the middle to do?
One, find a reliable resource that understands managing a multi-generational household. Two, have open discussions with your parents or in-laws and kids.  The goal is to make it a partnership. And three, don’t lose focus on your own financial situation.


Posted: 5/22/2015 with 0 comments

Categories: Kids and Money, Money Matters, Planning



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