Taking care of young children and aging parents simultaneously can lead to financial strain. Many families assume that this is a time in which they should stop saving for their own retirement in order to afford the expenses they have today. Even worse, some families dip into their retirement savings. If you are in either of these situations you are potentially setting yourself up for future financial difficulty. Instead consider the following financial tips for the sandwich generation that don't involve dipping into your retirement.
Sell, sell, sell
Instead of dipping into savings consider items you have that you could sell to earn additional money. If you are parents are no longer driver consider selling their vehicles. If they aren't living at home any more think about having an estate sale and then putting the house on the market. Do you own a boat or other large item that you don't have time for? Consider selling it.
Save, save, save
Look into ways you can cut costs in your own spending. Many people find they spend a considerable amount of money on:
- Eating at restaurants
- Gym memberships
- Purchasing clothes, purses, shoes
- Going to the hairdresser or getting their nails done
- Buying a daily cup of coffee
A few small lifestyle changes can save a significant amount of money. Make meals and coffee at home. Pack a lunch instead of purchasing one. Consider getting rid of cable and making trips to the hairdresser and nail salon less frequent. Only purchase clothing and other items when you need them.
Remember your own retirement
While it is easy to become bogged down in helping a loved senior figure out how to handle financial issues, it is important for you to remember that your own retirement years are approaching faster than you might like to admit.
With that in mind, consider carefully how much financial assistance you are able to render to a loved one. Your heart's desire may be to ease all the financial worries that you can for your senior, but the reality is often that you cannot truly afford to do so.
Open communication about money matters can help you and your senior find a good balance for everyone concerned.
Make the most of what's available now
Does your employer offer a 401(k) with a matching company contribution? If so, maximize your retirement savings by contributing at least enough to receive your employer's matching contribution.
Explore your options regarding flexible spending accounts and health spending accounts. Wise use of these options can sometimes save you a substantial amount of money.
Learn a lesson from your parents
If your aged parent is struggling to find ways to pay for home care or assisted living, it is wise to consider the lessons inherent in the situation.
Plan now for your own long-term care needs by purchasing long-term care insurance, allocating a percentage of your salary to future needs, or investigating additional sources of funding for long-term care which may be appropriate for your situation.
Make a budget and follow it
While you may have been following the same budget plan for years, you may find that caregiving changes several key factors in your budget. For instance, your caregiving responsibilities may make it necessary for you to ask for a modified work schedule or take a leave of absence from work.
If that is the case, you will need to readjust your budget, taking into account your reduced income, your reduced ability to contribute to a retirement or savings account, and any increase in your expenses related to your caregiving responsibilities.
Eliminate debt where possible
Many people in the Sandwich Generation find themselves in credit card debt, debt for educational expenses for themselves and their dependents, and mortgage debt.
While it may not be possible for you to live completely debt-free while caring for your loved one, it is possible to reduce your debt by paying more than the minimum payment due on credit cards and perhaps even consolidating your higher-interest revolving credit into a loan with a lower fixed interest rate. Using credit wisely can help you keep your financial head above water in difficult financial times.
It is best to continue saving for retirement and college even as you are raising children and caring for elderly parents. When you reach retirement you will look back and be grateful that you stayed on the right financial path.
Look at Alternative Living Arrangements
If caring for your parent, you may incur extra expenses. Moving your parent to a nursing home may not actually be the best decision. Financially, it may make more sense to keep your parent in their own home, or move them to your home. In either case it makes sense to hire a home health aide to take care of your parent. Many families find this to be a better solution for mom or dad who would really prefer to live in a residential home anyway.
At Caring Senior Service, our expert staff is comprised of extremely knowledgeable, friendly, and trusted professionals who take pride in helping your loved one manage their daily activities. Contact us today to learn more!