Meeting basic living expenses is tough enough when you go it alone. But what about when you have someone else to look after?
According to New York Life’s new Wealth Watch Survey, nearly half of the "sandwich generation" – folks with children and elderly family members to look after – report being unable to meet basic living expenses, like food or medical care, in the last year due to caregiving costs.
Of those surveyed, 90% say they’ve made a "lifestyle change or financial decision" due to the cost of caregiving.
The study, which surveyed 1,003 sandwich generation adults between Aug. 31 and Sept. 10, shows how unprepared they are for the expenses of caregiving. It also reveals how they’re adapting.
"People should care because you can be individually financially healthy, have your bills under control, have adequate emergency savings," said Suzanne Schmitt, head of financial wellness at New York Life. "But you're one caregiving event away from having your own finances challenged."
Read more: How much money should I have in an emergency savings account?
The study also reports a demographic shift in those who make up the Sandwich Generation. Millennials, 27-42 years old, are increasingly becoming caregivers. In 2023, the study reported, 66% of self-reported caregivers were millennials while 23% were Gen Xers. Meanwhile, in 2020, merely 39% of caregivers were millennials and 40% were Gen Xers, between the ages of 43 – 58.
Men are also playing a more active role in caregiving, according to the study. For instance, in 2023, 45% of self-reported caregivers were women while 55% were men. That’s in stark contrast to 2020, when 64% of self-reported caregivers were women and 36% were men.
"Males as a result likely of the pandemic are more willing to admit to providing care and are more apt to be pulled into the act of household caregiving for children and also older loved ones," said Schmitt.
Though more men are becoming caregivers, women still bear a notable financial and emotional load from caregiving. The study found that 72% of men "said they would be able to afford providing the same level of care for their loved ones for at least another year before adjusting their financial plan" while only 54% of women said the same. And the report finds that 50% of women say that caregiving negatively impacts their mental health compared to 39% of men.
Women also continue to spend more hours per week caregiving than men, according to the study.
"Women historically have underreported caregiving, because it's often just seen by many women as something they simply do," Schmitt said. "Picking up prescriptions, managing medications, doing grocery shopping, doing cooking."
Meanwhile, the sandwich generation as a whole is struggling to make ends meet as they care for children and the elderly. The study finds that 40% say they "made a financial decision they regret due to mental strain from caregiving." More than 50% say they’ve "made a sacrifice" when it comes to financial security due to caregiving needs. Of those that have made a financial change due to caregiving responsibilities, 34% reported cutting back on expenses, 26% reported contributing less to their emergency savings, and 26% reported taking on more debt.
Read more: Personal loan vs. credit cards: What to use for an emergency?
On the other hand, the sandwich generations’ financial struggles have also made them more far-sighted. For instance, over 3 in 4 agree that "the experience of caring for their aging relative led them to purchase or explore purchasing financial protection products," according to the survey. New York Life also reports that 34% of study respondents plan to pay for future caregiving costs by paying more out of their own budget, 28% say they plan to do so by working overtime in their jobs, 27% say they will do so by spending the retirement savings of those they will be caring for.
The sandwich generation is also saving money for their children to take care of them. According to the study, 42% say they've put aside $43,136.67 on average.
"As a silver lining in all of this we believe that younger people are starting to have those thoughts and internal dialogue and conversations with spouses and partners earlier in life," Schmitt said. "Where they simply have more time to save more runway to consider products and solutions, and ultimately be proactive in putting a plan in place before they find themselves in this care."
Dylan Croll is a Yahoo Finance reporter.
Read the latest financial and business news from Yahoo Finance
