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When it comes to family caregiving, millennials are caught in the middle. They are caring for aging parents, raising their own children, and still trying to pay off debt, save for retirement, and manage a mortgage.
More than 40% of millennials report being caregivers, according to a study by the Transamerica Center for Retirement Studies. And almost 90% of millennial caregivers had to adjust their work schedules to accommodate their caregiving duties. These work adjustments include missing days of work, cutting hours, and working remotely.
Here’s how experts recommend balancing caregiving along with other financial responsibilities.
Key Takeaways
- Millennials are the new sandwich generation, having the task of caring for aging parents and raising children at the same time.
- Assess how much help parents need and set boundaries to establish how much help you are able to give. Review your parents’ finances and estate planning documents.
- Take a close look at your own finances, especially spending and determine what expenses are the most urgent at this time. Try to stay on track of long-term goals like saving for retirement.
Having a Conversation With Your Parents
Talk over the caregiving situation with your parents. “Have a family meeting to understand your parents’ situation and needs. These are tough but necessary conversations,” said Barbara Ginty, a certified financial planner (CFP) and host of the Future Rich Podcast.
These conversations can be an opportunity for you understand how your parents are doing financially.
“Do they have a financial plan? What are their financial resources? Do they have wills and power of attorney documents in place? Insurance? Long-term care coverage?” said Jamie Bosse, a CFP and author of ‘Money Boss Mom’. “At the very least, you’ll want to make sure they get power of attorney documents in place so that you can manage their affairs for them when needed.”
You’ll then want to figure out what your parents’ needs are and how you plan to help them out. How much will the assistance cost, and how will you or your parents pay for it?
Once you assess the caregiving situation with your parents, it’s also important to establish boundaries.
“You can’t be everything to everyone,” Bosse said. “Outsource where you can, and where you feel comfortable. Give yourself permission to say ‘no’ or step back when needed.”
If a parent is seriously ill, you may be able to take leave from work, too. The Family and Medical Leave Act (FMLA) allows employees to take time off of work to care for a parent with a serious medical condition.
Don’t Be Afraid To Seek Help
If you need extra help, you may consider finding a service that helps the elderly in your area and state.
“In New York, it is the Office for the Aging, and it is a free government service dedicated to helping seniors,” Ginty said. “Other states have different names, sometimes the Department of Senior Services, but these are state- and county-run facilities.”
You may consider reaching out to other professionals for their expertise too, including an attorney, a financial advisor, and an accountant.
“An estate planning attorney can make sure your parents have the proper documents, including a healthcare proxy, a power of attorney, and possibly a trust,” Ginty said. “Remember, when it comes to an aging parent, you are not legally responsible to cover their bills. Work with the local and state government agencies to qualify your parents for aid if that is the situation.”
Get Your Own Finances in Order
Maintain a budget and keep close tabs on your caregiving and other spending. If you don’t already have an emergency fund, be sure to establish a healthy one by putting three to six months of living expenses in a high-yield savings account.
“When you have a full plate and responsibilities on both ends, an emergency fund will help provide peace of mind,” Ginty said.
You may have competing financial priorities as you care for your parents and raise your children, have some tough choices to make. Do what you can for each while maintaining your savings and retirement goals as much as possible, even if it’s investing just enough to get an employer match for your 401(k) plan. If you do need to ease back on saving or investing, make sure it’s temporary.
“It is OK if there’s a period in your life where saving for retirement isn’t possible. It is OK to take a break,” Ginty said.
Christopher Stroup, a CFP and founder of Silicon Beach Financial, recommends that millennials triage their finances.
“Start by getting clear on what’s urgent vs. important. Cover the basics like emergency savings, high-interest debt, and retirement contributions before stretching too thin,” he said. “Think of financial planning as triage: Not everything gets funded equally, but every dollar should have a job aligned with your long-term values.”
The Bottom Line
The new sandwich generation faces a number of challenges. Begin by having a conversation with your parents about their needs and wishes. Assess their financial situation and look into whether they have begun any estate planning. Now is the time to do it.
Consider your parents’ situation carefully and establish boundaries, making it clear just how much you are able to help. Get assistance from experts. Review your own finances and spending. What expenses are the most urgent? Maintain an emergency fund and continue to invest for retirement, even if it’s a small amount.
