3 weeks ago
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February 11, 2025 | 05:12 pm
TEMPO.CO, Jakarta - For some people, managing personal finances has become a challenge. However, for those who are part of the sandwich generation, the problem becomes even more complex. The sandwich generation is a term used to describe those who are supporting their primary families while also caring for elderly parents. This double burden certainly requires a sophisticated financial strategy to ensure that all needs are met.
As reported by the Ministry of Finance and New York Life, here are some tips to help the sandwich generation manage their finances more effectively:
1. Create an All-Inclusive Family Budget
The first step in managing finances is to create a budget that covers all aspects, from income, expenses, and savings, to debts. By knowing the detailed allocation of funds, you can ensure that the needs of your family and parents are met without sacrificing financial stability. Strive to have an emergency fund that is sufficient to cover living expenses for three to six months in an easily accessible account.
2. Maximize Benefits at Your Workplace
Many companies offer various benefits to their employees, such as retirement savings plans, health savings accounts, and flexible spending accounts. If your workplace provides these services to its employees, make sure you understand and take advantage of the benefits available to you. Consult with your company's HR team to find out about additional benefits that may help alleviate financial burdens.
3. Consider Financial Protection
Life insurance, disability insurance, and long-term care insurance are forms of financial protection that can help you handle unforeseen events. By having the right protection, you can ensure the financial well-being of your family remains intact. As many as 76 percent of the sandwich generation are considering or have purchased insurance products after realizing their caregiving responsibilities.
4. Build a Support Network
Caring for your family doesn't have to be done alone. Involve other family members, friends, or even communities to share responsibilities and lighten your burden. For financial planning, consider consulting with a professional financial advisor to create a more accurate strategy. According to New York Life, 82 percent of the sandwich generation receive assistance, with 49 percent from family members and 32 percent from friends.
5. Plan for Retirement Income
Preparing for retirement funds is not enough with just saving. Make sure you have passive income sources like bonds, dividend-paying stocks, or annuities to ensure financial stability in old age. Optimizing social security benefits can help you maximize retirement benefits in the future.
6. Set Healthy Boundaries
Managing finances as part of the sandwich generation is not just about numbers, but also about life balance. Don't hesitate to set realistic financial boundaries and communicate with your family about your financial capabilities. At least 58 percent of the sandwich generation feel that financial aspects are the biggest challenge in their caregiving role.
7. Start Investing
If your finances are starting to stabilize, consider starting to invest. Choose investment instruments that match your risk profile and financial goals. If you're still new to this, learn more before starting to invest. Don't be tempted by investments that offer instant profits without risk. Do research before allocating funds.
8. Maintain Physical and Mental Health
The heavy financial and emotional burden can harm your health. Make sure to maintain a healthy lifestyle, get enough rest, and talk to close people if you feel overwhelmed. Don't hesitate to seek professional help if you feel stressed or exhausted due to the double responsibilities.
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