The sandwiched generation: How do you create a financial plan that works? | Money Talks

Key Concepts

• Sandwich Generation: Individuals who are simultaneously caring for aging parents and raising their own children.
• Agility in Planning: The ability to adapt financial and personal plans quickly due to unexpected demands.
• Lifestyle Adjustments: Making conscious changes to spending habits and priorities to accommodate caregiving and family needs.
• Financial Literacy: Understanding and applying principles of saving, investing, and insurance.
• Categorical Spending: Allocating specific amounts of money to different expense categories.
• Long-Term Financial Planning: Strategies for securing future financial well-being, including investments and insurance.
• Caregiving Expenses: Costs associated with supporting elderly parents, which can include medical appointments and interpretation of medical information.
• Generational Financial Support: The practice of parents supporting their own parents, and the expectation that children will do the same.

The Sandwich Generation: Navigating Financial and Personal Demands

This episode of the Money Talks podcast, featuring Yubaraj Utaman, a marketing manager, father, and podcaster, delves into the multifaceted challenges faced by the "sandwich generation." These individuals, typically in their 30s and 40s, find themselves balancing the needs of young children with the care and support of aging parents. The conversation highlights the significant time commitment, emotional strain, and financial considerations involved in this dual responsibility.

Yubaraj's Experience: Juggling Multiple Roles

Yubaraj Utaman shares his personal experience of being a young father to a one-year-old, a marketing manager, and a caregiver for his aging grandparents and mother. He describes his approach to managing these roles not as a burden, but as a source of purpose and a drive to work towards something meaningful. He emphasizes the importance of being "agile" in planning, especially with a newborn, and acknowledges the lack of readily available advice as the first in his peer group to have a child.

Key Points:

• Emotional Impact: Yubaraj admits to feeling stretched to his limits during a period when his grandmother, mother, and child were all sick simultaneously, coinciding with a busy work week.
• Financial Reluctance: The constant demands of caregiving can lead to a reluctance to spend on oneself, whether for personal time or material possessions.
• Agility and Anticipation: Yubaraj highlights the need to be agile and almost anticipate the next emergency, whether it's financial or time-related.

Financial Strategies for the Sandwich Generation

The discussion explores practical financial strategies Yubaraj employs to navigate his responsibilities:

1. Avoiding Long-Term Financial Commitments:

• Yubaraj avoids tying himself down to long-term financial commitments unless absolutely necessary.
• Example: He opts out of long-term gym memberships and avoids purchasing cars outright, preferring flexibility.
• Rationale: This allows him to easily divest from commitments if circumstances change, providing financial agility.

2. Shifting Spending Habits:

• Yubaraj has shifted his spending from material possessions to food, acknowledging that time constraints make meal prepping difficult.
• He also reduced long-haul travel to shorter trips within Southeast Asia to cut costs.
• Perception: He views these as lifestyle changes rather than sacrifices, enabling him to be more present at home.

3. Managing "Weaknesses" and Indulgences:

• Yubaraj humorously admits to a weakness for buying shoes, which he now purchases quarterly instead of monthly, a reduction from his pre-marriage habits.
• He recognizes that these are non-essential purchases and represent a conscious adjustment from his previous lifestyle.

4. Prioritizing Future Planning Amidst Current Demands:

• Despite lifestyle changes, Yubaraj allocates a portion of his savings to investments, prioritizing his son's future.
• He moved into a new house and had a newborn simultaneously, a period he describes as extremely taxing due to renovation costs, moving expenses, and sleep deprivation.
• Theory vs. Practice: He notes the significant difference between anticipating sleep deprivation and experiencing it firsthand, leading to literal headaches.

The Role of Side Gigs: A Tamil Podcast

Yubaraj is also a co-host of a Tamil-based podcast in Singapore, which he describes as a way to give back to the community and preserve the language and culture.

Key Points:

• Community Focus: The podcast's inception was driven by a desire to contribute to the Tamil community.
• Shared Challenges: All four hosts are fathers, with some having young children and others expecting. They are all navigating similar sandwich generation pressures and have recently moved into their homes.
• Monetization and Growth: The podcast has achieved some monetization, covering costs and generating seasonal profits, indicating growth and reward for their efforts.
• Long-Term Vision: Yubaraj sees the podcast as a potential future option for his son, emphasizing that it's not about imposing but offering a choice.
• Partner Support: He stresses the crucial role of his wife and the partners of other hosts in managing childcare and supporting their endeavors.

Foundations in Financial Planning: Insurance and Investments

Yubaraj's proactive approach to financial planning is rooted in his upbringing:

• Parental Influence: His parents were strong advocates for insurance and investment planning, instilling financial literacy from a young age.
• Personal Experience with Insurance: He witnessed firsthand the critical role insurance played in managing the significant costs associated with his father's leukemia treatment. This experience solidified his belief in its importance.
• Personal Health Needs: Yubaraj has also benefited from insurance covering his own sports-related knee injuries (ACL, meniscus), highlighting its practical application for unexpected medical events.
• Shared Belief with Wife: His wife also has insurance, as her parents similarly exposed her to financial planning.

Investment Approach:

• While his parents provided the foundation, Yubaraj sought to deepen his understanding by learning to invest himself.
• He emphasizes researching before investing in stocks, ETFs, or cryptocurrency to make informed decisions.
• Ownership and Learning: This active involvement fosters a sense of ownership over financial decisions and provides valuable learning experiences, even from mistakes.

Categorical Spending and Budgeting

Yubaraj outlines a structured approach to managing his monthly finances:

1. Prioritizing Bills:

• All essential bills are paid in full.
• This category includes insurance premiums and investment contributions, which he views as monthly obligations.

2. Budgeting for Monthly Expenses:

• A budget is set for groceries, household items, and other daily necessities.
• Specific ranges are allocated for his son's food and milk, and for his dog's care, acknowledging the fluctuating nature of these costs.

3. Allocating Disposable Income:

• The remaining disposable income is divided between savings and investments.
• He utilizes a "range" system with a buffer of approximately $200 to accommodate unpredictable fluctuations in expenses.

Planning for His Son's Financial Future

Yubaraj's financial planning is inherently linked to his son's future:

• Subconscious Allocation: His current savings and investments are subconsciously earmarked for his son.
• Family's Money: He views their collective finances as family money, intended for future needs like marriage, housing, and education.
• Future Endowment: While not yet formalized, he has the thought of setting up an endowment fund for his son, acknowledging a lack of bandwidth to plan it currently.
• Balancing Support and Responsibility: He intends to provide his son with a financial head start but wants him to develop accountability and responsibility, suggesting he might not reveal the full extent of the inheritance initially.
• Financial Education: Yubaraj plans to teach his son about saving and investing, building upon his own learnings and his parents' emphasis on savings. He aims to equip his son with templates and knowledge to adapt to future financial landscapes.

Common Financial Planning Issues Among Peers

In conversations with his podcast co-hosts, who share similar demographics and life stages, Yubaraj identifies common financial planning challenges for the sandwich generation:

• Similar Incomes and Lifestyles: Most peers have comparable incomes, live in HDB flats (BTOs), have one to two children, and married within a similar timeframe.
• Parental Financial Stability: Fortunately, their parents are generally able to manage their own finances.
• Generational Giving Back: A recurring theme is the observation of their own parents giving money to their parents, creating an internal expectation to do the same. While not currently paying bills for their parents, they aim to contribute financially in the long term once their own families are stable.
• Time and Conscious Spending: The most taxing aspects are time management and the need to be highly conscious of every expenditure due to the financial demands of their current life stage.

Yubaraj's Single Piece of Advice

For individuals in their 30s and 40s navigating the sandwich generation challenges, Yubaraj's primary advice is:

• Map Out Your Spendings: He recommends meticulously listing all expenses in an Excel sheet, including salary and the high and low ranges of expenditures.
• Clarity and Awareness: This exercise provides a clear, black-and-white view of financial outflows, reducing mental burden and enabling informed allocation of remaining funds.
• Subjective Allocation: He suggests that after accounting for expenses, individuals can decide on their savings and investment percentages based on their personal circumstances and goals, whether by fixed amounts or percentages.

Conclusion

The conversation with Yubaraj Utaman offers a candid and practical perspective on the financial and personal realities of the sandwich generation. His emphasis on agility, conscious spending, and proactive financial planning, even amidst significant demands, provides valuable insights. The episode underscores the importance of understanding one's financial landscape, adapting to life's evolving needs, and building a secure future for oneself and one's family.