Top Financial Tips For The Sandwich Generation

The sandwich generation bears a heavy financial burden. Here’s how to manage it better.

COVID-19, a forecasted recession, and shifting priorities – those are just a few of the factors that intensify the burden faced by the sandwich generation, or those that support both their parents and children. This support is not just limited to financial support, but also physical and emotional.

Typically, the sandwich generation splits their finances into three: to take care of their parents, for their children’s current and future needs, and for themselves – not an easy feat considering the impact of inflation.

“The pressure on this generation, typically those between 35 and 59, is great because of their roles, responsibilities, and obligations for care that include the financial, physical, and psycho-social aspects of the care,” according to Ms. Ang Bee Lian, director-general of social welfare at the Ministry of Social and Family Development.

So how can the sandwich generation bear this burden better? We’ve gathered some tips below.

Track Where Your Funds Go

If you don’t know where your funds go, how can you expect to save for the future? If you can’t get a grip on your finances, future-related goals like retirement or home ownership may seem difficult to reach.

Considering this, take the time to track your expenses. A simple method is to keep a small notebook or spreadsheet with you where you can record your spending in a detailed manner. It may seem tedious at first, but once you get a sense of the money going out and coming in, it will be easier to change your habits and become more financially prudent.

Don’t Forget Yourself

If you spend a large chunk of your income taking care of your parents and children, you probably don’t have much left to spend on yourself. This can lead to neglecting your own health and wellness. An easy fix is to set up an automated transfer from your main bank account to a savings account that is dedicated to your own personal needs and expenses.

Don’t forget your emergency fund, which should be at least 6 months’ worth of your living expenses. You must also prioritise your retirement savings.

More Fron OMY: Guide To Supplementary Retirement Scheme (SRS) Account In Singapore

Learn How To Say No

Saying no isn’t easy, especially to your children or parents. However, you need to make some sacrifices if you want to save for the future. For example, if your child wants to take a trip overseas and asks you to chip in, you’ll have to explain why it’s not a priority at the moment.

Protect Your Income

If you’re the main provider of your family, job security is crucial. Protect your income by looking into insurance for income protection, and life insurance. Once you’ve made the necessary financial preparations, you can take your stress levels down a notch and enjoy your life more.

If you’re ready to make investments, make sure to diversify them. By not putting all your eggs in one basket, you will reduce the risk of a financial shock should something unforeseen happen.

More From OMY: How To Invest In Singapore: A Beginner’s Guide

Talk About Finances

A perfect budget plan can only take you so far. One of the top ways to make your burden lighter is to get your family involved. Think about it: you can make an effort to save, but it won’t be productive if your dependents spend so much money.

Therefore, you must have an open discussion with your parents and kids about your current financial standing. Be honest about your income and budget, and address spending habits that need to change.

Prepare For Emergencies

In addition to retirement and education savings, you should also have a rainy day fund. You should have some money set aside for unforeseen emergencies like medical expenses, sudden unemployment, and other major disruptions in your family’s life.

You should also look into getting adequate insurance for emergency situations, such as health insurance, home insurance, and personal liability insurance. This will save you from financial stress should a major emergency occur.

More From OMY: Best Personal Loan for Low Income Earners in Singapore

A Word From OMY

Managing your finances, especially if you’re part of the sandwich generation, takes a HUGE amount of work. However, it will pay off in the long run. While adjusting to a constantly changing budget and spending habits can be challenging, it will become easier over time. With enough support from your family, you can secure your financial future.

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