Financial Planning Tips for the Sandwich Generation
In a study by Edelweiss Life Insurance in 2025, 60% of people said, “No matter how much I save or invest, I never feel like it’s enough for the future.”
When it comes to money, many of us never received formal financial education. As we grow up we are forced to take care of our finances. There comes a time in life when we have to take care of others too. Generally, people between the ages 30 to 50 have children and also aging parents. The older and younger generations have higher financial requirements. Kids have to be given a good education. Parents will require good healthcare. Many find themselves balancing financial responsibilities for both children and parents.
This blog is for those people who are taking care of their parents and children. We give some important tips you can use to plan your finances better.
Financial Challenges of the Sandwich Generation
The survey added that over 50% of the people in this generation worry about running out of money, leading to financial anxiety. They rely heavily on credit cards and loans due to the rising cost of living, healthcare, and education. They liquidate their investments before they mature.
Many people feel guilty about spending on themselves, fearing they are wasting money. As a result, they compromise on short-term aspirations like vacations and lifestyle upgrades with long-term goals like retirement, children’s education and marriage.
Constantly trying to create an abundant life for their children and parents affects their financial planning. They live in anxiety over future medical costs, children’s education, and maintaining their parents’ quality of life. Even those earning more than ₹1 lakh a month feel it is insufficient. This makes them worried about whether they are really financially prepared for the future.
Challenges in a nutshell:
Multiple financial responsibilities – This generation takes care of the financial needs of their children and parents along with their own needs.
Rising healthcare costs – A single hospitalization can disrupt your finances. Moreover, the cost of healthcare in India is rising every year.
Rising education expenses – As kids grow up, their tuition fee also increases each year.
Struggle to plan for retirement – Due to so many financial obligations, you are not able to plan or set aside money for your retirement.
Lack of social security – Compared to other countries, India has only limited retirement benefits.
Tips to Plan Your Finances
Protect Yourself First
Build an emergency fund – Save money for 6-12 months of expenses in a liquid account for emergencies.
Get health insurance – Get your family’s health covered. You can get health insurance plans that cover the entire family.
Get life insurance – When your whole family depends on you, it is wise to have your life insured.
Plan Your Retirement
Make it mandatory to set aside money for your retirement every month.
There are different investment plans like EPS, NPS and mutual funds where you can put your money for retirement while also getting tax benefits.
Calculate how much money you can set aside for retirement each month and invest consistently.
Secure your Parents
Check if your parents have savings, retirement plans and insurance.
Ensure their health is insured.
Apart from insurance, have a separate liquid fund for their expenses.
Plan your Children’s future
Start an early SIP and build an education corpus.
Look out for government-backed savings schemes for education.
Look out for scholarships to support children’s education.
Manage your debt
Think twice before taking loans and credit cards.
Clear existing loans before taking on new ones.
Look out for better income opportunities
Make sure you earn well.
Diversify your income to build wealth.
Wealth Transfer and Estate Planning
Draft a will to ensure smooth inheritance
Add a nominee to all your investments and insurance policies
Conclusion
Life is a balancing act. Providing a comfortable life for your loved ones can add to your financial stress. To navigate through it, you have to plan your finances well. Get professional financial advice, adopt smarter budgeting strategies and reduce dependence on credit. Secure yourself for the future so you don’t have to liquidate your assets in emergencies. Be aware and prepared and create a stable, stress-free future for you and your family.
Frequently Asked Questions (FAQs)
Carol Abaya, an expert on the sandwich generation, categorized the Sandwich Generation into three types:
Traditional Sandwich – Adults caring for both aging parents and their own children.
Club Sandwich – Middle-aged adults supporting parents, children and grandchildren, or younger adults caring for parents, children and grandparents.
Open-Faced Sandwich – Anyone else involved in elder care.
Rural India: Traditional joint family systems are more common, where multiple generations live together. Responsibilities for caregiving are shared among family members, easing the burden on any single person.
Suburban India: Nuclear families are more common, meaning the sandwich generation may have to manage aging parents who live independently or rely on hired caregivers, increasing their financial and emotional responsibilities.
Some good investment options are mutual funds (SIP for wealth accumulation), Public Provident Fund (PPF) for long-term savings, fixed deposits for liquidity and health insurance to avoid unexpected medical expenses.
Premature liquidation of investments, which disrupts long-term financial security.
Over-reliance on credit and loans to meet short-term needs.
Lack of emergency funds, leading to financial stress in crises.
Not having adequate health and life insurance to cover unexpected medical or life events.
Create an emergency fund to cover at least 6-12 months of expenses.
Invest in insurance (health, life and retirement) to secure the future.
Follow a disciplined investment approach—stick to mutual funds, equities and FDs for long-term goals.
Seek financial advice to optimize savings, debt management and investments.
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