How to Deal with Financial Stress of Taking Care of Kids and Parents

The financial stress of taking care of kids and parents should not be glossed over or ignored.

Parents typically feel financial stress, with new reports suggesting it costs a middle-class family with two children $310,605 to raise children from birth to age 17.¹

This is generally broken down into the following percentages:

  • 32% to housing
  • 27% to food
  • 12% to 29% to childcare²

In addition to these main categories, parents also pay for transportation, healthcare/insurance, clothing, extracurricular activities, sports and activities, school fees, and family trips.

Keep in mind that this $310,605 is only up to age 17, which doesn’t include college expenses or expenses for children still living at home past this age.

That’s just the cost of raising children.

It’s a lot.

It gets more expensive (and stressful) for those raising children and caring for their elderly parents.

These people are often referred to as the sandwich generation – which now accounts for 23% of adults in the U.S. with a parent 65 years or older and who are raising a minor or providing for an adult child, according to a Pew Research Center survey.³

“In a Policygenius Sandwich Generation survey, more than 60% of respondents said they are stressed out about how much it costs to take care of at least three generations: their parents, their immediate family (self and spouse) and children.”⁴

The reason for the stress is clear when you look at recent statistics for the sandwich generation.

  • “In its most recent survey of unpaid caregivers, published in 2020, AARP found that there were nearly 42 million people caring for an aging friend or family member — more than tenfold the number in 1989. The fastest growth is happening among younger generations; the share of caregivers who are under 45 quintupled over the past two decades, to nearly 66 percent from 16 percent, as their parents — many of the 72 million baby boomers — are living longer but doing so with more chronic diseases and disability and less means than the generation before them.”⁵
  • Sandwich generation caregivers were twice as likely to report financial difficulty (36% vs. 17%) and more likely to report substantial emotional difficulty (44% vs. 32%) than their peers who only act as caregiver to a parent over 65. Those in the middle of a caregiving sandwich also had a higher average score on a measure of overload than those with only older adult caregiving duties.”⁶ 
  • “On average, 48% of adults are providing some sort of financial support to their grown children, while 27% are their primary support. Additionally, 25% are financially supporting their parents as well. Some of the adults living in this sandwiched generation face financial problems regularly, having to support three generations at one time.”⁷ 
  • Americans in their 40s are the most likely to be sandwiched between their children and an aging parent. More than half in this age group (54%) have a living parent age 65 or older and are either raising a child younger than 18 or have an adult child they helped financially in the past year. By comparison, 36% of those in their 50s, 27% of those in their 30s, and fewer than one-in-ten of those younger than 30 (6%) or 60 and older (7%) are in this situation.”⁸

Today’s sandwich generation starts early and lasts longer than in previous decades, which elongates the financial stress of taking care of kids and parents.

They experience acute financial strain, a lack of reciprocated support, and “fatigue from fulfilling the demands of too many roles.”⁹

If you are dealing with the financial stress of taking care of kids and parents, you are not alone, but you do need help.

Here are 5 tips to help elevate your financial stress of taking care of kids and parents.

1. Prioritize Your Financial Future

When you are taking care of your kids and your parents, it can be very tempting to stop taking care of yourself.

If you spend your money for retirement on paying for your children’s college education or your parents’ expenses, who will take care of you when you need it in the future?

Make a point to prioritize your financial future starting today.

Don’t put off saving for retirement or emergencies until you “have extra money.”

Use auto-enrollment to save for both.

If you haven’t started saving for your child’s education with a 529 plan, get started before it is too late.

Simply knowing you have planned for college and your retirement will alleviate some of the financial stress of taking care of kids and parents.

2. Have the Awkward Conversations

Many families find it awkward to discuss finances, but it is extremely important, especially for those in the sandwich generation.

When it comes to your children, be honest about what you can help them with when it comes to college or other future adult expenses.

Set boundaries so kids know what they should not expect from you.

Similarly, as your parents get older, it is appropriate and necessary to discuss their financial situation.

You need to have a clear understanding of what will be expected so you can make a plan.

This is also the time when you should discuss investing in long-term care insurance.

[Related Read: Family Financial Planning: Why Awkward Money Talks Are Necessary]

3. Share the Load

One of the biggest stressors for the sandwich generation is playing too many roles.

You need help, and you must be willing to ask for it.

If you have siblings, see if you can share the financial and physical load of caring for your aging parents.

Utilize resources, such as veterans’ benefits and social security.

Contact your local department of aging to see if there are local resources available, such as assistance for grocery delivery and medication management.

Visit websites such as www.eldercare.gov, www.caregiveraction.org, www.caregiver.org, and www.helpguide.org.

If your children are going to college, ask them to help pay for their education.

If your adult children live at home, ask them to contribute financially.

4. Keep Filling Your Own Cup

It’s important to remember that you can’t pour from an empty cup.

As you strive to care for your children and your parents, make sure you care for yourself.

Prioritize getting enough sleep and eating well.

These habits help you battle stress and stay healthy while caring for others.

5. Work with a Financial Advisor

If you are overwhelmed by the financial stress of taking care of kids and parents, speak with a financial advisor.

A financial advisor can provide clear suggestions for financially managing a multigenerational household and securing your financial future.

They know the costs associated with this type of situation that you may not even be aware of, such as tax implications.

It’s a wise way to share the load and protect your finances, as well as the finances of those you are caring for.

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