Common Nicknames: The Sandwich Generation, The Panini Generation, The Club Sandwich, The Caregiver Generation
Financial Challenges: Supporting a larger number of dependents, inability to save for retirement or personal needs, loss of time valuable for compound interest.
Likely born between: 1962 – …
“These obligations aren’t just expensive; they are time consuming and directly affect your ability to earn.” – Dan Kadlec, Sandwich Generation, Old Story, New Story
The Baby Boomers may have been the first generation to be dubbed “The Sandwich Generation,” but it’s not necessarily going to be the last. Generation-X is, and will be facing similar challenges, as presumably will the millennials and generations to come. As people are living longer, overlapping generations are becoming the norm not the exception. So how do you plan and manage your finances when you’re not sure who may be potentially dependent on your financial support?
We’re here to expand on an issue that could very well become the reality for more than a just single generation. We’re talkin bout the Sandwich Generation, and what’s in store beyond.
There’s more than just one
What started as a generation of distinct members, is stretching into the foreseeable future. It’s becoming more and more evident that members of the Sandwich Generation (and future members) feature a wide range of individuals and families. In order to recognize if or where you fit within the sandwich generation, let’s first look at some of the different terms that are becoming more common:
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The (original) Sandwich Generation
The Sandwich Generation was coined to distinguish a generation faced with the financial responsibility for their parents, as well as their children. It’s a pattern that’s been linked to the Baby Boomers, but applies to anyone who extends financial support to the generation above them, as well as below. Being ‘sandwiched’ by the financial strain from both sides, it’s an apt nickname, though one that doesn’t necessarily communicate the emotional severity of the pressures.
The Panini Generation
Some have already gone so far as to extend the metaphor, referring to its members as the Panini Generation – a name that sounds even less serious, until the function of a panini press is considered – intense and heated pressure applied from both sides.
The Club Sandwich Generation
And the metaphor continues with the so called “Club Sandwich Generation.” Those in the Club Sandwich Generation may find themselves caring for their parents, their children and their grandchildren… stretching the financial care thin so as to support 4 different generations.
Same Ingredients For Future Sandwich Generations
Times may be changing, but some things and structures look as though they may stay the same for some time. The Sandwich Generation isn’t necessarily a new concept, it’s simply one that’s been newly defined. Future generations may be facing similar challenges. Those younger graduates who seek help from their parents, maybe one day face similiar financial pressures.
Prioritize: Take Care of Your Own Needs First
If you’re struggling to support your children and parents, you’re likely acting as a caregiver. And as caregiver, it’s essential that you care for yourself before you can truly take care of those around you. Written out, it might seem an instruction for selfishness. But it’s critical that anyone providing financial care to generations above and below are first and foremost thinking about their own long-term well-being. That means knowing where what’s happening with your retirement contributions, how you plan to support yourself in the future, and what options are available to ensure that you won’t be putting yourself into unnecessary debt.
The High Costs You’re Facing
Pushing off the needs of others to take care of your own isn’t easy. It can induce intense feelings of stress, guilt and shame. That’s why one of the main struggles faced by members of the Sandwich generation is successfully providing financial aid to family, while still maintaining a financially stable life for themselves. In looking at the costs that can be put upon the shoulder of those ‘sandwiched,’ it’s easy to see why.
The cost of full time nursing care has never been low. However, it’s particularly straining when the costs fall on the shoulders of the children of the parents being cared for. The costs associated with full-time care-giving can be alarming to children caring for their parents – especially if their own retirement looms near.
If you anticipate becoming a caregiver for one or more family members, plan out just what kind of help you might be able to give, and how to weave that into your own financial plan. Consider part-time care, or in-home for your aging parents rather than full-time or nursing homes.
Another problem faced by those caring for others is the very real possibility that caregivers won’t save enough for themselves, or dip into their retirement early in order fund a child’s education or to help pay for medical expenses.
Your retirement is a priority – don’t borrow from your retirement savings. The impact of compound interest on your savings cannot be replicated without equivalent time put towards growing your wealth. Look at time, look at it’s effect on your savings and most importantly, look long-term with your financial goals.
A Child’s Education
Part of raising a child used to include helping them financially through their college years. With the rising cost of higher education, it’s become increasingly less realistic to do so without taking a serious hit in your own finances. Co-signing on loans, especially private loans, can result in a huge financial burden for parents.
Thinking of paying for your kid’s college education? Maxing out grants, scholarships and talking to your children about the impact any debt will have on you and your future are essential steps. Taking out debt – especially as a co-signer, is a serious decision and should be a regular topic of conversation. Supporting your child and encouraging them to pursue their dreams doesn’t necessarily mean at all costs. Communicate what you will be able to contribute, and continue to express the result of borrowing large sums of money.
Your Own Health
A common way to cut expenses when caring for other generation is to skip out on medical costs, and avoid symptoms or push away warning signs in favor of saving money. But your health is just as important as the health of those you’re caring for. And it goes beyond just physical well being – emotional distress caused by the pressure of care-giving is a real and serious issue.
It’s OK to ask for help, to seek attention and simply reset your emotional barometer when necessary. In many cases, taking care of minor problems as they arise will help to prevent larger problems long term. Caring financially for others is admirable, but frustration and worry are exhausting. Taking breaks to reassess your own state of physical and mental well-being are critical in the long run.
Do you have a plan? If not, take time to organize and compare expectations from your children and your parents. Utilize financial planning tools to help you visualize your future, and to aid you to clearly understand what kind of financial flexibility you’ll have in your future.
Just because the middle generation in the Sandwich Generation seems to take the brunt of the financial responsibility doesn’t mean that they should or have to take full responsibility. Set boundaries and limitations, and make them clear to your family members. Work together and form an inclusive plan that accounts for support from the outside generations. Though you may feel obligated to take on the responsibility alone, a more streamline approach can be reached if you work together.
Using the effort of the group, rather the effort of the individual can make all the difference. And it’s not simply about the quick fix, or obtaining more money to funnel it into the problems that already exist. It’s about finding solutions that allow all generations to live comfortably, and it’s about finding solutions that work and are supported by everyone.
Plan For A More Crowded Future
Another incentive to plan for better and more sustainable solutions is to set standards and precedents for those in the future. By working together to formulate an approach towards financial stability, those who may face similar framework in the future will have the tools necessary to manage their money effectively as they mature and grow older.
And though there are small switches and actions that may help boost savings, what continues to be evident is the communication of the importance of time. After all, the power of compound interest is highly dependent on time – and those younger generations may be able to teach future generations if they experience the successful results. Talk about how to use time to your benefit, and communicate the importance and impact of time when creating a long-term budget.
If you’re not in the hot-seat for the sandwich generation – you very well might be. By taking care of your own financial future while also communicating the importance to others you may be able to work to change the trends.
You Are Not Alone
Finance has a reputation for being stiff and impersonal, but those experiencing the pressure of caring for loved ones while struggling to stay afloat on their own would probably beg to differ. There are many emotions tied to taking care of loved ones via financial support that it can become difficult when you find yourself forced to balance cold-hard facts with the emotional response they elicit. Watching aging parents, especially as they change physically or mentally is one thing. To watch it happen while watching the younger generation as they struggle to come into their own and to thrive is another. It’s more than finances, it’s human life, it’s struggle and it’s pain. And quite simply – it’s draining. But you’re not alone in your struggle, and you can work to manage the stress.
The only time it’s too late is when you give up
It is never too late to take action towards creating a more secure financial situation. There will always be options, however small. If you feel like you’re entering into the race too late in the game, the first thing to do is to reverse those thoughts.
It’s not too late to rearrange your finances, it’s not too late to make some changes and it’s not too late to start planning for your own security.
For those members of the Sandwich Generation, taking each task as it comes is important – but looking at the cumulative effect of those actions is arguably even more important. Striving to balance the two – though challenging – can provide the structure for your financial future, and for the financial future of others.
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