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Kids At Home + Aging Parents? How To Find Financial Balance

Lindsay Mott  |  July 23, 2021

Those of us with kids + aging parents to care for are spending more than we were before the pandemic. Here’s what you can do to keep your finances balanced.

For millions of us, the pandemic brought about an interesting shift — and that’s putting it mildly. Our emotions, our jobs, our families, our finances, our priorities, and just about everything else in our lives was altered in some way. Some of us were able to spend less and save more, and took time during the pandemic to pay off credit cards and other debt. 

But not all of us have had that luxury. New York Life recently did a study of members of the sandwich generation — those of us with kids at home who need our funds, time and care plus aging parents who need the same — and found an increase in spending since the beginning of the pandemic. 

Caring for an aging relative costs about $1,000 out of pocket for members of this generation during “normal times,” but more than half of those surveyed reported spending more monthly since the start of the pandemic, with 23% spending at least $200 more per month. Jeff Beligotti, vice president, head of Long-Term Care Solutions at New York Life says that in order to navigate these costs, “sandwich generation members are contributing less to their savings and to retirement, raiding emergency funds, paying off less debt and delaying paying bills.” 

This increase in spending is a huge problem — especially since it means that members of this generation are delaying their other big life goals in favor of taking care of others. And the increase of the cost of care is likely only to continue in an upward trajectory, according to Shelly-Ann Eweka, senior director of Financial Planning Strategy at TIAA. Historically, and especially over the last five years on average, long-term care costs have risen at a faster pace than inflation. For example, for in-home care, the five-year annual growth rate in cost is around 4%. 

These increases can seriously impact on your budget and your own long-term financial health — but we know you want to help the family members who need you most while still keeping your own finances in order. Here’s how you can get to a better place. 

It Takes A Village. Call Your Family 

Although not every one has family members they’re able to confidently rely on, if you do have a “squad” you can lean on during this time, it’s time to pick up the phone. Having help from family members (even in the form of just a few hours a week, or a few trips back and forth to doctors appointments)  may help you defray your costs more than you imagine. Often, our instinct is that we don’t want to trouble others, or ask directly for what we need, but during times of great need, the people who love you most will want to help if they can. 

Stay Away From Your Savings 

“If you sacrifice your retirement, you’re going to put your children in the same predicament you are in right now,” warns Eweka. Yes, there are emotions involved, and you may feel obligated to help your elderly parents, but you also have to have a factor in how your decisions will impact you and your children, both now and when they become your age. 

“Consider that everybody always wants their kids to do better than them,” she says. “How can I help my parents and also my kids while helping myself to stay independent? That’s a gift.” 

Reevaluate Your Situation  

Take a long look at your budget. We’re spending differently now. What are you spending more on? What are you spending less on, and could some of that money be directed toward caregiving costs? Where might you be able to decrease other spending (especially after you give your family members a call)? 

This is also the time to familiarize yourself with certain programs where you live that you may not have originally qualified for, especially if there have been significant changes in your income, or the income of your parent. Talk to your friends and family, seek advice from your community (and from Google!) and talk to a trusted financial advisor or financial planner. Which brings us to our next point… 

Work With A Financial Professional

New York Life’s research shows that working with a financial professional can make a big difference in one’s ability to handle the financial pressures related to caring for others. 

43% of those prepared to provide care for a loved one for several years reported working with a financial professional in order to make that happen successfully. Those individuals who worked with a financial advisor were less than half as likely to need to fund future caregiving by withdrawing from their emergency savings, taking out a personal loan, or taking on an additional job, according to Beligotti.

Your financial advisor — or your trusted tax preparer — can also advise you on additional benefits you may be eligible for as a result of your changing circumstance. For example, it’s possible your family member may now be eligible to be considered a dependent when they weren’t considered as such before. 

Don’t be afraid to ask for help during this difficult time. You’ve taken on a lot, and even though things may be crazy, it’s important that you don’t put your own financial future at risk. Because even though your entire family may be depending on you now, “future you” also needs your help ensuring a risk-free and secure life. 


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