Are You Part of the Sandwich Generation?
by Celine on February 8, 2010
in Financial Tips
The photo above may look yummy, but once you get behind the metaphor it isn’t so appealing anymore.
What is the sandwich generation? Basically it’s the people who are financially caring for their retired parents while they are also financially providing for their children. In other words, they are financially “sandwiched” between two generations that can’t provide for themselves. It’s a relatively new term, which just made its way to the Merriam-Webster Dictionary in 2006. Though the term originated in the US, it’s a common phenomenon here as well.
But how does this happen?
First, most retiring Filipinos aren’t financially independent. According to a recent study by Sun Life, 45% of retirees become a financial burden to their relatives, 30% are dependent on charity, and 22% continue to work even after retirement.
Our culture’s attitude doesn’t help either. We feel compelled to repay our “utang na loob” to our parents, even if it’s more than we can afford. It doesn’t stop at parents either - sometimes you will be socially pressured to help out your “less fortunate” relatives, even if some of them fell into misfortunes that they created for themselves (such as excessive gambling, lack of will to find employment, etc.)
At the same time, it’s you will have to provide for your own children. Everyone knows that raising children can be expensive, especially if you want to provide them with the best medical care or send them to the best schools.
Now, the sandwiched person may earn enough to pay for both the needs of their parents and their children, but there’s often a cost to this. Usually, they don’t earn enough to also set aside money for their own retirement. At this point, it becomes a cycle and their children are doomed to feel “sandwiched” too when they become adults.
Breaking the Cycle
Here’s the sad thing: I know that when I have children, I will be part of the sandwich generation. But I don’t want it to become a cycle. When they grow up, I want them to worry about their own needs and even have the money to enjoy themselves a little more. I do not want to burden them.
There’s little that a sandwiched person can do for their parents if they are already retired. Maybe you can improve their health care coverage and set up an emergency fund for them. But if they live long lives and have no money for retirement, they will be financially dependent on you for a decade or two.
As for your children, there are ways to prepare for them financially. My partner and I will be saving up a certain amount as a “children’s fund” for our future kids so that we can pay for all the financial emergencies that come up within the first two years of having children. These include visits to the doctor, immunization, diapers, clothes, and other needs.
There are also educational plans, insurance, and other available vehicles that will allow you to plan for your children better. By having the money for your children before they arrive, you’ll be saving yourself from debt and a whole lot of headaches.
In other words, the key is to make a financial plan before your parents retire and before your kids arrive. Create a spending plan and account for major expenses. This will put you in a better position that will equip you to handle expenses for both parties.
More importantly, you need to earn more. Only by increasing your income can you also set aside enough money for yourself when you retire. After all, who wants to have their children go through the same problems and unnecessary stress?
Are you part of the sandwich generation? Feel free to share your experiences with other readers in the comments.
Frugal Pinoy is a personal finance website for the average Filipino. We discuss savings, frugality, and other money matters. To learn more about Frugal Pinoy and the author,
Oh my, Celine! There’s a term for this now? I am part of this generation and believe me, feeling the pressure and the guilt is something I wouldn’t want my children to experience.
There’s another trend now too that I’ve noticed. Parents often give their all to irresponsible children without any thought about their retirement. So the irresponsible children remain dependent on them. When the parents’ retirement comes, guess who takes care of them? It’s the irresponsible children’s job; it’s the responsible ones’ job. Where’s the fairness in that?
That’s why I’m trying to break this cycle now and I hope a lot of Filipinos our age do this, too. Now, I have another “fund” to consider. Thanks for writing about this…
“Parents often give their all to irresponsible children without any thought about their retirement. So the irresponsible children remain dependent on them.”
I’ve noticed this too. Sometimes, even when the parents are already retired, they might even share their pension with the irresponsible children. It’s very unfair and I’ve seen this destroy relationships among siblings. The worst case is that the damage is irreversible and people take sides, you’re cut off from your family…
Good luck to us both in breaking the cycle.
Hi Celine! I’m taking this sandwhich generation into a positive thing by making my In-laws help us out in one of our businesses. Instead of giving them fish, we give them fishing rod in order to have the skill and knowledge to get more fish…and not beg for it. Now my wife and my In-laws are earning from their business. You see what I’m getting into?
As for kids, well yes their are truly dependent on you (I have two boys). That’s why you need to have at least one income stream just for the needs of your children.
Nice topic on the sandwhich thing. It’s sad to say most of the Filipinos falls in this category.
That’s a great idea, Francis
It’s very sustainable and certainly much better than asking for “hand outs”. Thank you for sharing it.
Hello celine,
I’ve been reading your blog for many months now. I would just like to say thank you for all the frugality tips and very informative articles on money management. I am now taking baby steps (already have am emergency fund, working on the 10% automatic (untouchable) savings for retirement, bought educational fund for my kid and planned to add more for my two other kids) towards financial freedom in the future.
I like this article too because I am also part of the ’sandwich generation’ but doesn’t mind it. However, in the future, like you- I don’t want my children to be looking after my financial needs- hence the savings part.
Keep up the good work!
Congratulations on your success Divine! Sana tuloy-tuloy na yan. Thanks for commenting
Exactly my thoughts. I don’t want to be a financial burden to my kids. Both my parents are working and will have a good retirement so I guess they will not rely on us too much. All four children hopefully will not be a financial burden to them as well.
Glad to hear your parents will have a good retirement.
this is a very interesting article.
im an only child and my parents are still working so i doubt if they will depend on me upon their retirement. i’m not sure if they have savings in the bank but they have more than a couple of properties to their name. on the other hand, my father in-law is a retired ofw and depends on us for his monthly ‘income’; mother in-law is deceased already. they have 3 kids but hubby is the only responsible child so… you get my drift
we have an educ plan for our elder child, we also plan to get a life insurance in the next couple of months but we dont have properties nor savings in the bank yet