Supporting parents and kids while building your future

Your parents need help with medical bills, your children have school expenses, and somewhere in between, you’re saving for retirement.

The sandwich generation – middle-aged individuals supporting ageing parents while raising children – can feel pulled in several directions as they try to meet everyone’s needs.

Speaking with FMT Lifestyle, licensed financial planner Goh Chee Keong, 49, said managing these competing demands begins with understanding your commitments and setting priorities.

Being realistic about what you can afford, he added, helps you support both generations over the long term.

“It’s not because we don’t care for our parents or we don’t love our children. It’s because we want to provide sustainably for our children or our parents,” said Goh, a Financial Planning Association of Malaysia member.

One challenge is anticipating costs that go beyond the usual monthly bills. Parents’ healthcare and long-term care needs bring unexpected expenses, Goh noted, such as adapting the home after a parent’s hospital discharge or buying a suitable bed.

Caregiving can also affect income as taking a parent for regular hospital appointments or caring for them at home may mean fewer working hours.

Meanwhile, giving children the best start in life involves costs beyond school fees. Piano lessons, for instance, may also mean buying a piano for home practice. There are laptop or tablet costs to consider for children’s schoolwork.

To ascertain what you can afford, Goh suggests dividing your budget into three categories: essentials, discretionary spending and long-term commitments.

Essentials, he added, cover food, housing, transport and insurance premiums. Discretionary expenses include gym memberships and other optional activities, while long-term commitments cover retirement savings and building an emergency fund.

When money falls short, revisit each category and decide which expenses take priority. “For example, if my child needs a phone to stay contactable, a basic model can meet that need if you can’t afford a more expensive one,” said Goh.

There is no one-size-fits-all approach to allocating money across these categories, he added, as each family’s circumstances differ. Comparing your life with others can make it harder to stay within your means.

Seeing other families travel overseas several times a year, for instance, may tempt you to do the same. But before matching their spending, consider what your household can afford.

Knowing your financial limits also helps you discuss what you can offer your parents. Have these conversations before a crisis, Goh advised, so you understand their wishes rather than making decisions under pressure.

Would they prefer to remain at home? Would they be comfortable having a caregiver? A casual chat, perhaps over tea, can help you understand their preferences and explain what you can consistently provide.

Goh suggested involving siblings when preparing ahead, suggesting that a family contingency fund for future care costs be built, with each contributing what they can afford.

When discussing contributions, consider each sibling’s earning capacity, time spent caregiving and personal circumstances, such as whether they have children of their own. Preparing meals for parents, arranging their medical appointments and accompanying them to check-ups are valuable contributions too.

While caring for both generations, your retirement savings should not consist of whatever is left after everyone else’s needs are met.

“We want to avoid creating tomorrow’s sandwich generation, where we become dependent on our children,” said Goh.

Protecting that future also means preparing for a loss of income and Goh recommends having an emergency fund covering six to 12 months of living expenses.

He also stressed the importance of insurance protection for critical illness or total permanent disability that prevents you from working. After all, protecting yourself helps protect those depending on you.

Ultimately, budgeting, clear financial boundaries, discipline and a realistic understanding of what you can afford will help you balance your family’s needs.

Together, Goh said, these act like the pick holding a sandwich’s layer in place. “These serve as a pillar or as a foundation to hold all these pieces together,” he said.

After all, while everyone’s needs matter, those in the middle cannot afford to leave themselves out.

For financial guidance, watch the Financial Planning Association of Malaysia’s weekly ‘Money Mastery’ videos on Facebook or explore your spending habits through its Money Style Check quiz.

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