Tips for Breaking the Chain of Sandwich Generation for Newlywed Couples

The Sandwich generation is a term to describe the condition of a generation of adults who must bear the cost of living for their parents and children. This term was introduced in 1981 by Dorothy A. Miller, a professor at the University of Kentucky, Lexington, United States (USA).  

Sandwich Generation Group and Its Portrait in Indonesia

There are three groups of sandwich generation, namely: Traditional sandwich: A group of generations aged 40-50 years who shoulder the necessities of their children and their parents. Their children have entered productive age but are not yet financially independent, while their parents are inadequate to work. Club sandwich: This generation group is divided into two. First, the generations group aged 40-60 shouldering the cost of living for aging parents, their children, and their adult grandchildren. Second, the generations group aged 20-40 sandwiched between small children, aging parents, and grandparents. Open-faced sandwich: This group refers to any individual actively involved in caring for an adult or the elderly. An example is a nurse in a nursing home or a nurse who takes care of the elderly at home. Newlywed can get caught up in the club sandwich generation with a few notes. First, they get married without having a financial plan. However, they decided to have children soon after marriage. At the same time, one or both already bear the cost of living for their parents, even grandparents, because they are the only family members who have jobs. These portraits of family situation are not uncommon in Indonesia. Data from the Central Statistics Agency (BPS) states that the financing sources of 79.44 percent of elderly households in Indonesia come from working household members. On the other hand, 32.52 percent of young Indonesians decide to marry for the first time at the age of 19-21 years.  

Tips to Avoid Being Stuck in the Sandwich Generation for Newly Married Couples

For newlywed couples, the sandwich generation is a challenge that can come anytime. However, that does not mean that there are no preventive steps to avoid it. Here are some tips so that newly married couples can break the chain of sandwich generation in the family.  

Check your partner's financial condition

Disclosure of information is one of the essential factors in maintaining a marriage. One of the information that needs to be disclosed is financial conditions. That way, you and your partner can find out about each other's situation such as assets owned, investments, income, to dependents outside of living expenses. For example, the husband shoulders the pay of his mortgage and his parents’ living expenses, who is no longer working. Meanwhile, the wife needs to support her sibling's education fee until she graduates. This information disclosure is a positive thing. From here on out, you and your partner can make better household’s financial planning.  

Create household priority and its budget

The next step is to prioritize your household finances, both short and long-term. The main priority that needs to be solved is to pay off any debt you or your partner have in the shortest possible time. At the same time, it is also necessary to keep the monthly living expenses from increasing. The next priority on the list is to allocate a budget for liability and prepare savings for future needs. Examples are health funds, pension funds, and prepare education funds for children who will later become new family members.  

Household financial flow audit

After that, you and your partner must maintain consistency in auditing the family's financial flows. Record all incoming and outgoing cash flows. Categorize each expense and income based on the priority needs previously made so you can evaluate the family's financial pattern. This is important to prepare the following month’s household finances more efficiently. You and your partner can also minimize the household latte factor and allocate funds to where they should be according to previously agreed priorities.  

Allocate funds for investment and emergency funds

Don't forget to allocate some funds for investment and emergency funds. If you're confused, you can start by following Senator Elizabeth Warren's popular budgeting rules. Allocate 50 percent of your fund for needs, 30 percent for wants, and 20 percent for investment and emergency funds. However, these rules can change according to the previous review of the family's financial situation. This fund budgeting formula can be handy for those who want to pay off debt. Allocate 40 percent of funds for needs, 30 percent for installments, 20 percent for savings, and 10 percent for goodness. The allocation of 20 percent saving funds can be used for various things. For example, preparing funds for children's education, pension time, to emergency funds. Having an emergency fund can make it easier for you and your partner to adjust your budget for sudden expenses. For example, natural disasters that damage assets such as homes and personal vehicles or when you lose your job. That way, the future for you and your family can be more secure.  

Breaking the Chain of Sandwich Generation Requires Mutual Financial Awareness

Lack of adequate financial education in the family is one of the causes for the birth of the sandwich generation. They grow up with minimal knowledge and end up in more complex conditions when dealing with the fact that managing finances is not as easy as imagined. In Indonesia, there is the expression "many children, lots of fortune," which is basically a double-edged sword. Having many children is not a problem if you and your partner have established financial provisions. However, it's a different story if the two of you can't even meet household needs. Therefore, to break the chain of this sandwich generation, mutual awareness is required from you and your partner. After aligning your vision and financial goals, the two of you must maintain a commitment to maintaining a positive household financial flow. The decision to have children also needs to be carefully considered. The consideration is not only in terms of household financial capabilities but also in terms of financial knowledge from you and your partner. By having good financial insight, you can educate your children in the future to be wiser in managing money. That way, your children will grow up to be financially independent individuals and won’t give birth to the next sandwich generations. On the other hand, you and your partner don't have to worry about pension time because you planned it ages ago. So, you can use the money, energy, and extra free time for other positive things such as having a hobby or enjoying life. Your children will also not be trapped into the next sandwich generation because you and your partner are financially ready to welcome the future.