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Why the Sandwich Generation Doesn't Have It Easy

Shannon McNay

These days it seems that all anyone can talk about is student loan debt. Defaults are on the rise and we’re dangerously close to a bubble burst the size of the mortgage crisis just a few years ago. But with the attention student loan debt gets in the media, there is a group of people who are struggling even more than recent college graduates, unbeknownst to most of us: the sandwich generation.

The term “sandwich generation” refers to those adults who are caring for their parents while also supporting their children. The children of the sandwich generation are sometimes even young adults who’ve moved back home after college, otherwise known as the boomerang generation. To make matters even more challenging, members of the sandwich generation are sometimes still making payments on their own student debt. See how things can get complicated, and fast?

If you’re a part of the sandwich generation, then I know that you’ve been suffering quietly for years. But now it’s time to recognize what you’re going through and guide yourself to a better financial future, even while you care for those who depend on you the most.

Financial Do’s for the Sandwich Generation

Pay off your debt.

Now is the time for you to focus on your future needs. While this may feel selfish, it’s important to remember that the better you can prepare for your own future, the more you can provide for your parents and children later. One major hindrance to securing a solid financial future is debt, so pay your debt off as soon as you can. Do you feel like you’ve already tried everything you could to become debt-free? Read tips from personal financial experts to find new ways to pay off debt that you may not yet have heard of.

Save as much as you can.

Once your debt is paid off, you can allot any money that was going toward the debt payments to your savings account. Again, the more money you can put away now, the more you can provide for your family later. While their immediate needs may seem more important, try as much as possible to put even a little bit away each month. A little bit of savings goes a long way.

Find a support system.

The challenges you go through may feel overbearing and unique, but there are many who are in the same boat as you. While this is an unfortunate truth, the good news is that you can find others to turn to for emotional support. According to the Pew Research Center, “about one-in-seven middle-aged adults (15%) is providing financial support to both an aging parent and a child.” Look at your social circle, there’s a good chance that there are people you know who are going through this as well.

Take advantage of tax incentives.

Did you take out student loans for your child in your name? You can deduct the interest you’re paying each year from your taxes, which means more money in your pocket to pay off debt or save. There are also tax deductions available to you if you’re paying for the care of your elderly parent. The key to this is that you can claim your parent as a dependent.

Financial Don’ts for the Sandwich Generation

Don’t borrow from your retirement.

When certain expenses pop up, such as your children’s college education or maybe even their weddings, don’t borrow from your retirement to pay. Consider this: your children have the rest of their lives to pay back their debt and build a retirement fund. Even if your own retirement is 10 years or out, don’t use that money to fund present needs for your children that could otherwise be financed by them.

Don’t take on new debt.

I’m fully aware that this is easier said than done. If your parent has medical needs that their own retirement and medical won’t cover, you may simply have no other choice. However, explore all other options before you take on new debt that you could end up facing well into your own retirement. The same goes for your children. Again, they likely have at least 20 years more than you do to build their finances and pay off debt. Let them take on their own debt if necessary, then help them by welcoming them back into your home. The amount of money they save by not paying rent can go far in paying off debt.

Don’t give up.

The challenges you face are not to be taken lightly, but don’t give up! With a little creativity and a lot of research, you can get through this and end up with a great future. Perhaps you could use one of your talents or hobbies to earn income on the side. In fact, your children can do the same. You could even look at freelance opportunities that allow you to work from home at any time that works for your schedule. Between this extra money and tax incentives, your financial situation might be a lot better than you imagined.

If you’re part of the sandwich generation, then you deserve a great deal of praise for working so hard to take care of your loved ones. But now it’s your turn to focus on yourself as well. Follow these steps and don’t forget the importance of meeting your own needs, even with all the obligations you’re fulfilling.

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