caring for children and aging parents at the same time is extremely tough but nearly half of adults
in their 40s and 50s are caring for a parent who is older than 65 well at the same time raising
a child or helping support a young adult it's called the sandwich generation caring for both
parents and children at the same time can create additional emotional and financial stress but the
good news is I have a few tips to help you balance all the responsibilities and hopefully make your
life easier and less stressful I'm Colin Exelby I'm a certified financial planner professional and
I provide financial planning for business owners and their families that just makes sense I own
the virtual Financial advisory practice Celestial wealth management and have been providing advice
all over this country for over 20 years alright tip number one get organized if you haven't
already creating a net worth statement of all your assets and debts is a great First Step this helps
you get a handle on where you currently stand financially what have you accumulated to this
point seeing it visually makes a lot of sense I currently use a system called Asset-Map to
help clients get clear on their current net worth the software can create a one-page virtual map of
your net worth in an elegant easy to read report but you can also use free software like personal
capital or even Microsoft Excel next is to begin to track your income and expenses if you're not
already doing so and I don't mean budgeting down to the last dollar I hate budgeting you
know that but I do mean knowing how much you have coming in and how much is going out and the major
categories you're spending money in it's important to understand how much you're spending how much
you are saving and how much you may need if you haven't done this yet it's time now before we dive
deeper this is a good spot to point out important disclosures the information in this video it's
for educational purposes this is not specific financial planning or investment advice it's
important that you consult with your Tax Advisor before implementing any investment or financial
planning process all right there are a number of tools out there that can make expense tracking
much easier if you want some recommendations just check out a few of them down in the description
one of my favorites is rocket money rocket money which was originally called true bill is a free
app it's extremely intuitive compared to other pieces of software that I've tried I use it for
my own family's finances and I find it easy to track and analyze how much money we are bringing
in how much we are spending and how much we are saving the great news is it helps me see these
things at a big picture level and that's what I care about I would specifically create separate
spending categories devoted to children and one for parents if you are covering any expenses for
your parents or your adult children I would separate those out so you can see and plan
for those expenses it's great so that you can see the amount of support that you're currently
fighting versus your own needs and compare it year by year because guess what the average
costs are according to a new 2022 update from The Brookings institution the cost of
raising a child from birth to age 17 will cost about three hundred and ten thousand
dollars that is a lot of money that's about eighteen thousand dollars per year per child
include college or any postgraduate financial support and according to AARP more than 78
percent of family caregivers pay some form of out-of-pocket expense when caring for their
parents on average family caregivers spend roughly seven thousand dollars annually so
now you understand why you need to keep track of this stuff once you have a clear picture of where
you currently stand my next tip is to improve your emergency fund more people to take care of means
more chances for emergencies having an emergency fund built up can help relieve stress in your life
because emergencies do happen unexpected medical expenses or last minute travel to help a parent
or a child in another state can really throw a wrench in your finances an elderly parent may
need unexpected financial assistance or your child may lose a job that was helping to pay
a for college you'd never know what could happen so if ever there is a time in your life you need a
little buffer this is it how much do you need well check out my video on whether you really need an
emergency fund to find out the best ways to create one for yourself and how much to fund it with
now when caring for aging parents unfortunately unexpected events do happen it may make sense to
adjust your family vacations for the time being oh God we don't have a family vacation well you
may want to change things during this period of time rather than traveling long distances for
long trips that could be disrupted or canceled it may make sense to plan more casual travel
closer to home for shorter time periods in addition to being less costly it's much
easier to plan around and reschedule if needed alright my next tip is to be sure to understand
the long-term impact to your finances now women are more likely than men to spend years out of
the workforce raising children or caring for an older relative or friend I know this day and age
men could be doing it as well but according to the statistics women are more likely and they're
probably better at it to be quite honest we forget things we're not very good with our emotions women
tend to be kind of better at that thing so I think that's probably going to continue but we'll see
this could mean however if that is happening that women are receiving lower wages lost income and
missing out on potential promotions which can all add up so maybe men we should probably do some of
this stuff well let's consider an example of how this can affect long-term finances
because sometimes we don't think about this stuff Christy is in her mid-50s she has a 100
000 a year job a pretty nice one she decides she's going to quit her job because her mother needed
significant care she decided to leave the job to care for her mom for three years all right well
she understood she was going to be losing her job and her salary but not only is she not receiving
three hundred thousand dollars in Lost salary but she also is no longer contributing to that 401k
so all those contributions and all the growth from those contributions are now gone the matching that
she was receiving from her employer well of course she's not there so that never occurred the extra
six thousand five hundred dollar contribution that she was making because she was over the
age of 50. well she's not making that now either so she's missing that as well as the
growth for it her social security benefits were permanently reduced because there these are some
of her highest earning years that she sacrificed to take care of her mom additionally there's
potential for a pension reduction because her length of service is reduced these are a lot of
other Financial impacts that a lot of people don't consider when thinking about leaving the workforce
now to lessen the impact if you are considering leaving the workforce maybe talk to your employer
about reducing hours while still maintaining enough to get benefits like the retirement
plan the pension our health care also some larger employers may offer services to employees who are
also caregivers so make sure you look into that and if you do have to leave to stay on track for
your own retirement consider making a spousal IRA contribution now IRA contribution limits are not
nearly as high as 401K limits but every little bit helps and you really don't want to miss out
on the tax advantages all right my next tip make sure you be aware of the closest daughter syndrome
at least that's what I like to call it it's well known that the child that is closest logistically
to the Aging parents is often the one with more physical caregiving responsibilities the one
who is present more often may notice things in the home that need to be restocked or that your
mother may be in need of a Cane or a walker to help them get around if you are the one providing
more Hands-On assistance it's really tempting to grab your purse and just pay for it because it's
easier but these expenses can add up to thousands of dollars a year and can significantly eat into
your budget ask for financial help either from your parent who you're caring for or from brothers
and sisters don't do it alone and if you are the sibling providing more Hands-On caregiving it's
important you find time for yourself according to the National Alliance for caregiving on average
adult caregivers spend roughly three hours a day in their role helping aging parents that's
taking away from their own self-care as well as that of their own children and their spouse
it's important to protect your own health your physical and your mental if you don't maintain
your health and your sanity you aren't any good to your family alright my next tip make sure you
are having proactive discussions with your aging parents and your siblings parents often don't
want to burden their children with their financial and medical challenges until there isn't another
Choice it's important to respect their privacy and their independence but the sooner you have an idea
of their income expenses assets and liabilities the better get introduced to their accountant and
financial planner if you haven't already there's no need to know all the details but if your parent
has an accident suffers memory loss or has an illness and they can't handle day-to-day living
as well they may not remember where important information or financial documents are know who
the power of attorney is make sure everyone is on the same page and legal documents are in place to
coordinate with siblings and other family members especially if they live out of state having
discussions with an independent estate planning attorney before something serious happens can
make life much easier if and when something does happen now on average when do people
have these discussions with their parents will children typically step in to help aging parents
in their late 70s often after a loved one has either made a direct Financial request for
assistance or when Health becomes a significant factor like when you notice a change to their
ability to handle daily living tasks lastly have an honest discussion with your spouse or
significant other about what is happening and your level of involvement I can't stress this
enough you really must be on the same page I'm serious you want to talk about what is
happening and be open about what you're feeling hard choices are the Hallmark of the sandwich
generation kids have plenty of school functions musical performances Awards ceremonies sporting
events and parent-teacher conferences I know because I'm going to all of them aging parents
need Care at different times in accidents or disease to them can mean you have to make choices
who gets your time too many couples don't take the time to talk through what is happening in
both their finances and their relationship can suffer so do your best to take time to discuss
what is happening it might even make sense to schedule time each week when you can talk and
be uninterrupted that way you stay on the same page and what if you're dealing with this all
on your own having a friend to talk to can be really helpful you don't want to keep everything
you're feeling bottled up now I hope these tips help you support your family without getting
squeezed and if you're looking for more tips to manage your finances check out these videos next