If you’re balancing the demands of raising children while caring for aging parents, you’re part of the “sandwich generation”—and you’re not alone. The emotional and financial pressures of supporting two generations at once can be overwhelming, even for the most organized individuals.
But with the right strategies, you can ease the burden, protect your financial future, and continue to support your loved ones. This guide is designed to help you navigate the complexities of multigenerational caregiving, so you can not only survive but thrive in the sandwich generation.
Understanding the Financial Pressures of the Sandwich Generation
Living between two financial responsibilities means you’re pulled in multiple directions. On one end, the cost of raising kids—childcare, extracurriculars, and education—can be staggering.
According to a 2022 analysis by the Brookings Institution, the average cost of raising a child to age 18 is now over $300,000, not including college. Add in tuition, and the numbers climb even higher.
On the other end, elder care costs continue to rise. Whether your parents are living independently, in assisted living, or require medical care at home, their needs can be unpredictable and expensive. In fact, the most recent Genworth Cost of Care Survey shows that the median cost of a home health aide is nearly $78,000 annually.
Amidst all of this, your retirement savings may be taking a back seat, putting your long-term financial security at risk. That’s why finding balance is key—ensuring you can retire comfortably, achieve your personal financial goals, and still provide the support your loved ones need without compromising your own future.
7 Essential Steps to Financially Thrive as a Member of the Sandwich Generation
Step #1: Gain Clarity on Your Financial Situation
To thrive financially as a member of the sandwich generation, it’s essential to fully understand where your money is going. Small, overlooked expenses—like prescription co-pays for your parents or activity fees for your children—can add up quickly, quietly eroding your financial stability.
By getting a comprehensive overview of your income, monthly expenses, debts, savings, and caregiving-related costs, you can identify potential financial gaps before they become a problem. This clarity enables you to prioritize your spending, make adjustments where necessary, and continue working toward a secure financial future.
Step #2: Prioritize and Protect Your Retirement
As a member of the sandwich generation, it can be tempting to put your own needs last—but when it comes to retirement, doing so can have long-term consequences. Prioritizing your retirement isn’t selfish, it’s an essential step toward maintaining your financial independence and avoiding future strain on your children.
Even when money is tight, continue contributing to your 401(k), IRA, or other retirement accounts. If you’re 50 or older, take advantage of catch-up contributions to boost your savings.
Building a solid retirement plan now helps ensure that you can care for your loved ones without compromising your own future and reduces the risk of becoming financially dependent down the road.
Step #3: Build or Rebuild Your Emergency Fund
For members of the sandwich generation, having a strong emergency fund is essential to maintaining financial stability during uncertain times. It acts as your safety net, providing peace of mind when unexpected expenses—such as medical bills or urgent caregiving needs—arise. Aim for at least 3 to 6 months of living expenses, but consider building a larger cushion if your caregiving responsibilities fluctuate or are expected to grow.
Keeping your emergency savings in a high-yield savings or money market account ensures it remains accessible while still earning interest. By securing this financial buffer, you’ll be better equipped to handle both personal and caregiving emergencies without derailing your long-term financial goals.
Step #4: Have the Tough Conversations Early
Effective communication is vital when you’re juggling the needs of multiple generations. Initiating important conversations with your parents about their finances, long-term care preferences, and critical documents (such as a will, power of attorney, and healthcare directives) before a crisis arises can make all the difference. This proactive approach allows you to understand their wishes and be better prepared for any future challenges.
Equally important is having age-appropriate money discussions with your children. Teaching them financial basics early fosters independence and helps reduce the chances that they’ll rely on you for financial support in the future. By addressing these tough topics ahead of time, you create a strong foundation for financial stability within your family, giving you peace of mind as you navigate your caregiving responsibilities.
Step #5: Explore Support Resources
As a member of the sandwich generation, it’s important to remember that you don’t have to shoulder the entire burden alone. Exploring available resources—whether through your community, workplace, or government—can significantly ease your financial and caregiving load.
- Tax breaks. You may be eligible for valuable benefits like the Dependent Care Credit, medical expense deductions, or even Head of Household filing status, which can reduce your tax bill.
- Employer benefits. Many employers offer Flexible Spending Accounts (FSAs), caregiver support services, or paid leave options that can help cover expenses and provide time off.
- Community services. Reach out to your local Area Agency on Aging or similar organizations to access assistance such as meal delivery, transportation, or respite care.
By knowing what resources are available and taking full advantage of them, you can free up both time and money, allowing you to better manage the demands of caregiving while maintaining your financial health.
Step #6: Consider Long-Term Care Insurance
Planning for long-term care is an important step in protecting both your parents and your own financial future. If your parents don’t already have a plan in place, discussing long-term care insurance can help ease the financial burden on you later. This type of insurance can cover the costs of home care, assisted living, or nursing homes, ensuring that your caregiving responsibilities don’t lead to financial strain.
For your own future, purchasing long-term care insurance earlier, typically in your 50s, can make it more affordable. You may also want to consider hybrid policies that combine life insurance with long-term care benefits, which may provide additional flexibility and better meet your needs. Addressing long-term care now allows you to protect your loved ones and secure your own financial peace of mind down the road.
Step #7: Set Boundaries to Avoid Financial Burnout
Caregiving can quickly become overwhelming, but it’s essential to recognize your limits, particularly when it comes to your finances. Setting clear boundaries around what you can and cannot afford to take on ensures you don’t stretch yourself too thin or jeopardize your financial well-being.
One way to manage this is by creating a caregiving calendar or shared budget with siblings and other family members to divide responsibilities more fairly. Don’t be afraid to say “no” when necessary—it’s not selfish, it’s a form of self-care. Being realistic about what you can handle financially helps protect your long-term stability while allowing you to support your loved ones in a sustainable way.
TrueNorth Wealth Is Here to Help
Being part of the sandwich generation is a significant responsibility. While it can feel overwhelming at times, it’s also a powerful reflection of your care, resilience, and strength. Even small financial steps can have a big impact, bringing clarity and control back into your life.
If you’re feeling stretched or unsure where to begin, consider working with a financial planner who understands the unique challenges of multigenerational caregiving. At TrueNorth Wealth, our team of fiduciary CFP® professionals is here to support you through life’s milestones, guiding you through both the challenges and opportunities that come with them. Together, we’ll create a plan that protects your future, allows you to care for your loved ones, and helps you build a life that is balanced and sustainable.
TrueNorth Wealth is among the top Wealth Management firms in Utah and Idaho, with offices in Salt Lake City, Logan, St. George, and Boise. At TrueNorth Wealth, we focus on helping our clients build long-term wealth while maximizing the enjoyment they receive from their money. We do this by pairing our clients with a dedicated CFP® professional backed by an incredible team.
For our team at TrueNorth, it’s about so much more than money. It’s about serving families all across Utah and helping them achieve freedom and flexibility in their lives. To learn more or schedule a no-cost consultation, visit our website at TrueNorth Wealth or call (801) 316-1875.
