They’re called the “Sandwich Generation”. This is the group of adults who are financially responsible for both their parents and their own children. The result of this predicament is that these adults are working too hard and they are still digging themselves further into debt. Many of us are the children of this generation. Whether or not we’ve managed to learn to stand on our own two financial feet yet, most of us have fears about what we’re going to do with our parents’ finances as they get older. We’re dealing with a group of people who are aging quickly without any financial security visible in their futures. This has parents and their adult children feeling a significant amount of fear. So how do we deal with this issue?

The Main Issue
The main problem that we’re facing today is that we have a group of adults who are reaching retirement age and who have a lot of debt on their hands. They are still paying for their own lives. Many of them are also paying for the care of their own elderly parents. And a lot of them are still supporting their adult children (us or our younger siblings). When these adults retire, their income will most likely be reduced but their expenses are going to stay the same (or even climb). That leaves our generation holding the bag when we may not be in a financial position to do so.

Taking Financial Responsibility for Ourselves
The first thing that we need to do if we’re concerned about our parents’ mounting debt is to start looking in the mirror. We aren’t going to be in a position to deal with this problem if we’re still relying on our parents for any sort of financial assistance. If your parents are still helping out with college loans, paying for your family vacations or assisting you in buying a home then you need to start thinking twice about accepting their help. Yes, they want to help. But if they’re digging themselves into debt to do it then everyone is going to suffer. Ask yourself first and foremost if you’re relying on your parents for money. If so, it’s time to put an end to that.

Opening up the Doors of Communication
Once we’ve looked ourselves in the eyes and started to get on track with being totally financially independent from our parents, the next key thing to do is to open up the doors of financial communication. A lot of us have a really hard time talking to our parents about money. Families fight about money all of the time. Aging parents who are concerned about their own debt may be defensive or secretive about finances. A lot of us go a long time without discussing the state of our parents’ finances with them. This is a mistake.

Starting to talk about money with your parents is tough but it can be done. Make sure that you know what you want to say before you say it. You want to stay calm during the conversation. This conversation should include your fears about the future. You may also want to come up with a few suggestions in advance about how the entire family can move forward together to alleviate the problem of your parents’ debt. To do this, you need to consider in advance what role you want to play in helping your parents out financially.

How Much Responsibility Should We Take for Our Parents’ Debt?
The reason that so many of us are afraid of what’s happening with our parents is because we feel a sense of responsibility to them as they age. We realize that they are going to get old and sick. They are probably going to need medical help one day. If they have a mountain of debt to deal with then we may end up responsible for funding their medical care. Because of this, it’s important to start thinking now about how much responsibility we actually plan to take on.

You need to ask yourself the tough questions about how you plan to handle the situations that may arise. If your parents need to go to a nursing home, are you willing to help pay for that? If your parents need in-home care, are you going to provide that care or pay for someone who will? As your parents get older and can’t pay off their debt, do you plan to pay it off for them? Discuss these things with your siblings and / or your spouse if you’re all involved in the situation. The answers to these questions will help you to establish some financial goals for dealing with your parents’ debt.

Setting Financial Goals
Once you have considered your role in the situation and opened up communication with your parents, you will be ready to set some financial goals for the future. Some of those goals might include:

  • Working out a plan with your parents so that they can pay off their own debt before they retire.
  • Saving up a certain amount of money to assist with the care of your parents should they need it in the future.
  • Investing in a larger home so that your parents can come live with you if they need to.

As you can see, your goals will vary depending upon the level of responsibility that you’re willing to take on.

Get More Information about Financial Resources for the Elderly
Finally, you should start working now to get as much information as possible about the financial resources that may be available for your parents as they get older. You may find that you can even help to reduce their debt now by locating financial assistance for your grandparents if your parents are paying for their care. Learning about the options in advance will help you to solidify your financial plan. This will reduce the stress that you have surrounding your aging parents’ debt and make the situation much easier to deal with.