Dependent parents and children? Advice for the sandwich generation.

As a working age adult, you might find yourself being part of the sandwich generation – supporting both your elderly parents and your dependent children. With retired individuals living longer and adult children leaving home later than ever before, this trend of double financial dependence is set to continue with research showing that 20% of the South African population is a part of the sandwich generation.

Being able to ease the financial burden of the people who cared for you through childhood and still being able to give your children what they need materially and financially can be a difficult balancing act. 

Consider these top financial tips for making it work:

1. Know what you’re dealing with 

If your parents depend on you for accommodation, care, or living expenses, you need to know where they stand financially. This is not a time to be shy about talking about money. While many adult children are reluctant to question their parents about their financial situation, in order to be properly prepared to take care of them later in life, you need to know about their pension and retirement plans, as well as their investments and savings. And don’t forget that the older your parents get, the greater their expenses might be, especially if they need specialist or long-term medical care.

2. Invest for education 

Tertiary education becomes more and more expensive every year. Therefore, it is never too early to start thinking about how you will pay for your child’s further studies and which investments can help you get there. While savings are essential to any sound financial plan, straight savings may not be enough for all your children’s financial and educational needs. Talk to a financial adviser about putting a savings and investment plan in place that will cater for the needs of you and your family.

3. Look after yourself first 

Just like putting on your oxygen mask in an airplane emergency before helping anyone else, you cannot care for others if you are not in a safe position. You need to be on strong financial ground so that you are able to help your dependents for as long as necessary. Make sure you have an up-to-date wealth management plan in place, including adequate savings and enough retirement funding, including a pension plan.

Looking after dependent family members at different life stages can be financially and emotionally taxing. It’s important to be prepared and have a plan for the future in place.

Take the time to talk to a financial adviser about your situation so that together you can maximise your finances and take care of your whole family.