The term ‘Sandwich Generation’ usually refers to people (often in middle age) who are simultaneously supporting (or caring for) both their children (or younger dependents) and their ageing parents (or parent‐figures). The pressures are financial, time, emotional, and often career-related.
It’s a role that can feel overwhelming, but with thoughtful planning and support, it is possible to navigate this stage of life without sacrificing your own financial security and wellbeing.
Understanding the Pressures of the Sandwich Generation
Being part of the Sandwich Generation means managing competing responsibilities:
- Financial stress: Covering children’s education, daily living expenses, and sometimes housing costs for parents.
- Time constraints: Balancing work, family obligations, and caregiving can lead to burnout.
- Emotional toll: The constant need to “be there” for multiple generations can strain mental health and relationships.
This reality is more than just an individual challenge; it’s a societal one. As life expectancies rise and younger generations take longer to achieve financial independence, the burden grows heavier on those caught in the middle.
What the Sandwich Generation can (should) do:
Create a Holistic Financial Plan
Map out your full financial picture: including income, expenses, debts, and savings. Budget for children’s needs, but also anticipate parental care costs such as medical bills, home modifications, or professional caregiving. A financial adviser can help align these competing priorities.
- Understand your full financial picture
- Map out all income, expenses, debts, savings, and obligations – including support for children and ageing parents.
- Identify how much of your cash flow is discretionary versus committed.
- Use this as the foundation for realistic decision-making.
- Prioritise your own financial security
- Don’t sacrifice your retirement or insurance coverage to meet short-term family needs.
- Remember: protecting yourself ensures you can keep supporting others in the long term.
- Establish clear boundaries and budgets
- Set transparent financial limits for how much support you can sustainably give to dependents or parents.
- Where possible, formalise arrangements (e.g. shared expenses, rent contributions, care cost agreements).
- Build (and maintain) an emergency buffer
- Aim for at least 3–6 months of living expenses to cushion unexpected care costs, job interruptions, or health expenses.
- Plan for intergenerational needs
- Incorporate education funding, home deposits, and parental care costs into one integrated plan.
- Consider future transitions (e.g. parents moving to aged care or children becoming financially independent).
- Review insurance and protection strategies
- Check that life, income protection, trauma, and TPD cover reflect your current family dependencies.
- Explore aged-care and health-insurance options for parents.
- Seek tax efficiency
- Understand the tax implications of supporting family members, gifting, or funding care.
- Use superannuation contributions, offsets, and deductions to improve after-tax outcomes.
- Plan for aged care early
- Understand potential aged-care costs, means testing, and accommodation options before a crisis arises.
- Involve parents in conversations about their preferences and financial arrangements.
- Align estate and legal structures
- Ensure wills, powers of attorney, and guardianships are current and coordinated across generations.
- Clarify inheritance expectations to avoid future disputes.
- Get professional, coordinated advice
- A holistic financial plan often requires collaboration between financial planners, accountants, and estate-planning lawyers.
- Working with a professional can ensure the plan is balanced, tax-efficient, and aligned with your long-term goals.
Other Key Things To Do
Have Open Family Conversations
As uncomfortable as it may be, discussing money and care expectations with both your children and parents is crucial. Establish boundaries, clarify responsibilities, and set realistic expectations early.
Explore Support Options
Government programs, community services, and insurance products such as long-term care or health coverage can ease financial and caregiving burdens. Take time to research what’s available in your region.
Look After Your Own Wellbeing
Burnout is a serious risk for this generation and will impact all parties in the sandwich. Scheduling breaks, seeking respite care, or joining support groups helps maintain balance and resilience.
The Sandwich Generation highlights the changing dynamics of modern family life. While the responsibilities can feel daunting, proactive planning and transparent communication can help lighten the load.