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Surviving the 'Sandwich Generation:' When Kids and Parents Depend on You

Trent Hamm

You're a middle-aged professional. You have children in various stages of the educational system and some perhaps on the verge of finally leaving the nest. At the same time, your parents are getting old. They may be retired, and they might need a bit of financial help every once in a while, plus you're sometimes called to help them out in a crisis.

Congratulations! You're part of the "sandwich generation" -- people who are stuck between children and parents who are financially dependent on them. To make matters worse, you're only in the early to middle stages of your career, which means your earnings haven't really taken off yet.

The "sandwich generation" period tends to strike people in their 30s to 50s, during a time when financial demands from their children in high school and college are the strongest and financial demands from their parents are also peaking.

Once you get through the other side -- your parents have passed away, your children have moved out and your career is at its height -- you can enjoy a much smoother road. The question is, how do you get from here to there?

Here are six tips for surviving the "sandwich generation" years:

1. Be proactive. If this sounds like your situation in a few years, start making plans today. Talk to your parents now about their estate planning needs. Talk to your children about financial preparations for college before they receive their high school diploma -- and be completely clear on what you're going to be able to contribute. Don't assume that your future self five years down the road will be able to juggle all these balls with perfect success. Take some of the pressure off right now.

2. Choose retirement over college savings. Remember that the best financial gift you can give your kids is to not financially burden them in the future. And no parent wants to ask their child to pay for their housing or medical bills in retirement. If this means you have to choose to not pay for as much of their college education, so be it. When choosing between retirement savings and college savings, you need to choose retirement savings. You will never be able to recoup what you lose by not putting money into your 401(k)s and Roth IRAs.

3. Don't hide your personal responsibilities from your employer. Many people attempt to juggle too much during this period, and they end up letting a ball or two drop -- and it's often work-related. If you're a valued employee at work, you boss will likely be flexible as you manage the demands of taking care of both your parents and your children. Be open with your supervisor about these responsibilities. Your supervisor will see this situation for what it truly is -- a period of character building that might make you an even more valuable employee.

4. If children return home, make them contribute. Do not allow an adult child to live in your basement without making significant contributions to the household, either in the form of work or financial contributions (or both). Be very clear about expectations. If your child is employed, suggest he pay a reasonable rent for his room. If your child is seeking employment, suggest that she help take care of household chores or seek out a part-time job. A child that just sits in the basement watching the months go by and consuming your resources isn't helping you, isn't helping themselves and isn't helping your parents, either. Expect more from them. You deserve it -- and they deserve it, too.

5. Maintain an emergency fund. At this point in your life, it is completely reasonable to save up so you have at least three months of living expenses in your savings account. That's your emergency money -- cash you can tap when everything goes wrong. Don't rely on your credit to bail you out -- it's useless in the event of identity theft and in a true financial crisis. Keep a healthy emergency fund, and replenish it whenever you use it.

6. Involve your siblings. You don't have to take on this burden yourself. Your siblings should and need to play a role in the care of your parents. Spend some time meeting with them and discussing what your parents need now or in the future and what you can each provide to make it work. This isn't just about money -- many needs of aging parents are met if you set time aside for care and conversations. Include all siblings who are able to help, and the burden becomes smaller for everyone.

The "sandwich" period can be a major life trial, but with some careful planning and clear communication, it's a period that can be rewarding, too. Connecting with your parents during their final years while also helping your children find their way in the world can make this stressful time a meaningful time in your life.

Trent Hamm is the founder of the personal finance website TheSimpleDollar.com, which provides consumers with resources and tools to make informed financial decisions.

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