How to cope with the cost of the sandwich years

The sandwich generation is the termTerm The period of time that a contract covers. Also, the period of time that an investment pays a set rate of interest.+ read full definition used to describe parents who provide some level of care to both their children and their parents or in-laws. According to a 2009 study by Statistics Canada, multi-generational Canadian households are becoming more common, with Canadians aged 45 years or older providing informal care to younger and elder family members at the same time.

Being the centre of the sandwich isn’t just an emotional and physical stress, but also a financial one. As many as 15% of employed people in this demographic have had to reduce their work hours in order to manage their responsibilities to their children and elders. If you’re finding that caring for your multi-generational family is eating away at your savings, check out these 6 tips to help get back on track:

1. Learn more about workplace and government benefits for caregivers

If you are providing care for family members who are sick, you may be eligible to receive government assistance. This support includes benefits, tax credits and resources for caregivers. Investigate the benefits and limitations in claiming eligible dependents through both your workplace benefitBenefit Money, goods, or services that you get from your workplace or from a government program such as the Canada Pension Plan.+ read full definition plan and annual income taxes.

The province of Ontario also allows for Family Medical Leave. While unpaid, you can take up to eight weeks off work within a 26-week period in order to care for a family member and your job will be protected. EI benefits can be applied to cover up to six of these weeks. Additionally, your workplace may also allow for special paid and unpaid leaves of absences.

2. Help your child build their financial goals early

Rising living costs, heavy educational debtDebt Money that you have borrowed. You must repay the loan, with interest, by a set date.+ read full definition loads and a tight labour market may push young adults to move back in with their parents or keep them from leaving. Talk to your kids about defining their financial goals early on and help them understand how to manage the costs of living on their own. This is the first step in guiding them to financial independence.

3. Talk to your parents about protection

Many seniors don’t consider buying long-term care insurance until it becomes too expensive. Talk to your parents about their plans for managing their money before they become ill. Encouraging your elders – while they’re still fully capable of letting their wishes be known – to establish a power of attorney and to finalize their wills is also an important part of the discussion. Speak with your own spouse about taking care of your own future needs so that you can spare your children from these worries.

4. Determine if downsizing is right for you or your elders

Research shows that many Canadians have not considered or are opposed to selling their home as a way of funding retirement. Yet, the sale of a home and downsizing to a condo or apartment may preserve independence and avoid the need to move in with the kids while freeing up funds for retirement.

5. Plan for financial emergencies

Being prepared to handle unexpected expenses is one of the key benefits of saving; it allows you to deal properly with emergencies without getting into debt. Do you have a plan for financial emergencies? Think about how you can replace some of your income if you need to time off work to care for a relative or child who returns home.

6. Don’t forget about yourself

Living together as an extended family and providing care for seniors and/or young adults can be very rewarding, but don’t forget to take care of yourself and your own finances.

Information and resources that may help you in your role as a caregiver are available from the Public Health Agency of Canada.

For the financial side of the equation, make full use of free planning and investing resources.

Take action

More than 42% of Canadians in their 20s currently live in their parents’ homes. (Source: Statistics Canada, 2012)

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