4 Ways to Juggle Multiple Financial Goals as a Caregiver
If you ever feel like you’re “sandwiched” between taking care of your children and caring for older parents, you’re part of the “sandwich” generation. While this term can refer to people who are still raising young, school-aged children at home, it also encapsulates adults who have financially dependent (or partially dependent) adult children.
Caring for younger and older generations simultaneously tends to leave little room to prioritize your own well-being (physical, emotional, mental, and financial). But your goals are important too, and they should be considered within your financial plan.
Here are four ways to balance your financial goals with your responsibilities as a caregiver.
Way #1: Determine What Your Goals Actually Are
Start with the end in mind. In other words, what are your actual short-term and long-term goals? And don’t just think practically, consider your real, lifelong dreams too. Sure, you want to retire comfortably. But maybe you also want to travel to all seven continents, start a foundation, buy a vacation home, or make sure your grandchildren graduate from college debt-free.
Once you have your goals written out, then you can start to think in terms of money. In other words, what will it cost for you to achieve each goal? When setting goals, it’s always a good idea to make them SMART:
- Specific: What, exactly, do you want to accomplish? Include details, as opposed to sweeping or vague statements.
- Measurable: How will you determine if you’ve achieved your goal? In terms of setting financial goals, this will most likely be based on the dollar amount.
- Achievable: Is this goal actually doable? Consider this a reality check. If you work hard and put your mind to it, can you reasonably achieve it?
- Relevant: How does this goal relate to your overall well-being? In terms of your life’s bigger picture, think about why this goal is worth setting.
- Timebound: What’s your timeframe for this goal? When should you reasonably be able to accomplish it?
Way #2: Prioritize Your Goals in Order of Importance
As a caregiver, you know that plans can change in an instant — meaning flexibility and adaptability are crucial. Sometimes, caregivers have to make sacrifices within their own financial lives to address the needs of others, and that means there may come a time when you need to choose between funding certain goals over others.
To help make that decision easier, put your financial goals in order of importance. Start by categorizing them between short-term goals and long-term goals. Perhaps you envision your short-term goals as happening within the next one to five years, whereas long-term goals can be anywhere from five years up to 10, 20, or even 30 years out.
Think, also, in order of importance. Sort your goals as either essential goals or aspiration goals:
- Essential goals: These are the goals that should be first in line for funding. These should include things like retirement planning, building an emergency fund, or paying off debt.
- Aspirational goals: These are more of the “nice to have” goals that aren’t technically “essential” to your financial well-being. They’re still important, however, to improving your quality of life and feeling fulfilled. They might include buying a vacation home, traveling the world, or retiring early.
Prioritizing your goals is important as a caretaker, as it helps you intentionally and thoughtfully allocate your resources (especially when they’re limited).
Way #3: Check Your Parents’ Estate Plan
If you haven’t gone over your parents’ estate plan yet with them or with their attorney, this can make a big difference in your future financial well-being.
Your parents may wish to “repay” you for your sacrifice and kindness by making you the beneficiary of a generous life insurance policy or other future financial windfall. To ensure that happens and their last wishes are honored, it’s important to review any beneficiary designations or other legal documents that dictate who receives what after your parents’ passing. If it’s been a while since they updated or even checked their beneficiary designations, it’s possible the information is outdated.
You may always want to review with your parents and their financial team (attorney, advisor, tax professional, etc.) the potential tax benefits of transferring or gifting assets to you while they’re still living (as opposed to receiving an inheritance after death).
Depending on the size of your parents’ estate, it may be subject to federal or state inheritance or estate taxes. However, you, your parents, and your team of professionals can discuss possible tax-minimization strategies for transferring the estate.
Perhaps you envision using a portion of your inheritance to fund some of your future goals. Take the time now to ensure all legal documents are in good working order and that they reflect your parents’ wishes today.
Way #4: Talk to a Financial Professional
Juggling multiple financial goals, especially as a caretaker, requires careful planning and consideration. An experienced financial professional can help you clarify your goals, build achievable milestones, and develop investing and saving strategies to help you make the most of your resources.
Reach out to our team today to learn more about how we help caregivers like you address your needs today while preparing for the future.