Strategic Financial Planning for the Sandwich Generation
During the InLife webinar, Speaker and Book Author Jayson Lo (top left) discusses the right mindset, heart set and skill in personal finance, while InLife Financial Advisor Dawn Avigail Patricio-Zoleta (top right) talks about strategic financial planning. InLife employees Choi Esguerra (bottom left) and Tina Calata (bottom right) share their insights as part of the Sandwich Generation.
If you are part of the Sandwich Generation, how do you raise your family, take care of your parents, and prepare for your retirement all at the same time?
This question was answered during the InLife webinar entitled “Caught in The Middle: Understanding the Sandwich Generation.”
As part of its mission to help Filipinos lead A Lifetime for Good, InLife provides financial literacy and planning for the Sandwich Generation--individuals in their 20s to 50s who are raising their own family while also helping their extended family.
Jayson Lo, entrepreneur, speaker, trainer, and author explained the need for the right mindset, heart set, and skill set in handling finances.
To have the right mind set, Lo debunked these myths: money is the root of all evil; lending money will help people; and money and debt should not be discussed in the family.
Noting that the love of money is the root of all evil, Lo said a person who earns more money can use his resources to bless other people. He also noted that lending money usually causes strained relationships if the debt was not paid. He added that it is necessary to talk about money and debt in the family.
“Financial literacy is important for the Sandwich Generation. They say that at age 65: 45% are going to be dependent on relatives, 30% are dependent on charity, 23% are still working, and only 2% are financially independent. We must break this cycle today,” Lo said.
“Talk to our family, our parents: ‘Mahal namin kayo pero meron kaming obligasyon sa pamilya. We will still help but voluntary, if we have extra money.’ Give them a timeline of say 6 months, or 1 to 2 years,” he added.
Lo noted the importance of having a budget, which is a financial blueprint that outlines how money will be spent or saved, and prioritizing needs over wants. He illustrated the 50/30/20 budget plan which means allocating 50% of income for essential expenses, 30% for discretionary expenses, and 20% for savings and debt repayment.
Offense and defense in financial planning
Lo explained the hierarchy of financial needs: wealth protection includes life insurance; wealth creation involves emergency fund, investment and business; wealth preservation covers retirement planning; and wealth distribution or leaving a legacy to the next generation. He also recommended talking to a financial advisor for guidance on financial planning.
Comparing personal finance to a basketball game, Lo stressed that offense entails earning more active income through work and passive income from business, real estate investment or rental properties; while defense means protecting assets.
“Finances is among the top three meaningful problems that we need to address in our entire lifetime. Start small, dream big, and overcome this meaningful problem of finances to overcome the Sandwich Generation so that in your line, you will be the last Sandwich Generation,” Lo said.
Strategic financial planning
InLife financial advisor Dawn Avigail Patricio-Zoleta, meanwhile, underscored the need for strategic financial planning.
“If you are part of the Sandwich Generation, you have limited budget for the expenses of your own family and your extended family. You will need income replacement or life insurance to extend your income if you are no longer around; then critical illness insurance for healthcare. You also need to plan for your children’s education; and lastly for your retirement,” Zoleta said.
“A financial advisor will study your needs, get to know you before discussing any financial plan, and help you. Life insurance will help the next generation to have a headstart in life,” she added.
InLife employee Choi Esguerra said life insurance helped his family when his father passed away. He shared that he had to step up and provide finanical and emotional support to his mother and younger siblings.
“My family was lucky enough, my Dad was part of the insurance industry and our family had insurance. I was a working college student, parent to my siblings, and sandalan to my mom,” Esguerra said.
To know more about the Sandwich Generation and financial planning, visit the InLife website.
