An emerging demographic group dubbed the sandwich generation — those simultaneously caring for children and elderly relatives — are facing increasing financial pressures as they juggle careers, family commitments and personal well-being.
According to a new study by Desjardins Financial, 20 per cent of Canadian professionals are balancing childcare and caring for older family members while trying to further their careers and get ahead financially. The added personal and monetary responsibility can have very real short and long-term effects, said Envision Financial branch manager, Jeff Knutson.
“Growing multi-generational care costs can hinder financial plans and prevent even the best savers from getting ahead financially,” Knutson said. “Families caring for both children and older relatives have greater day-to-day expenses and more spent today means less to put away for tomorrow. Over time this can easily translate into reduced savings or retirement income in the future.”
The study also revealed 20 per cent of employees who are caregivers have had to turn down a promotion because they were unable to take on additional responsibilities. A situation which can have a long-term effect on earning potential.
Given the sandwich generation will continue to grow as the population ages and as people delay starting families, Knutson says it is important for people to be aware of additional family and financial responsibilities they may face.
“From paying down a mortgage, to child care costs, to caring for aging parents, to saving for their own retirement, it’s clear the sandwich generation is under a lot of pressure,” says Knutson. “It can seem overwhelming.”
Not surprisingly, figures from the Desjardins study also showed 40 per cent of survey respondents reported high levels of overload both at work and at home. According to Knutson, having a solid financial plan in place can help prevent financial headaches from adding to the stress.
“Many financial institutions, including Envision Financial, will help put a free financial plan together, which can make a real difference in preparing for the future,” he said.
“People often associate wealth with high income. This is not true. Growing wealth comes from developing and sticking to a financial plan. It takes discipline, but knowledge and planning are the best remedies for preventing financial stress.”