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SALT LAKE CITY — The current economy has many people helping to pay the expenses of their struggling adult children, but, how can families best handle this kind of scenario?
The scenario has been called my many financial analysts as the "sandwich generation." This is when someone cares for their elderly parents as well as their own children. But, many of these "children" are now becoming adults themselves.
While the economy has been showing signs of improvement for quite a while, many of these adult children are not able to afford the expenses of living on their own. So, many of them rely on their parents to help them handle their financial needs.
"If you add in caring for grandkids, then you have what's being referred to as a ‘club sandwich.' " AAA Fair Credit Foundation President Preston Cochrane said. "We see those cases all the time, more so now mainly because people are living longer lives."
They require documentation. They require them to either submit their bank statement or their monthly budget to them.
–Preston Cochrane
Cochrane said people in this "club sandwich generation" are facing more and more economic struggles. He said many of them are not setting anything aside for the future because they don't feel they can afford it.
"With recent erosion in housing values, this group of people can't even rely on the equity in either their own home or their parents' home to provide any current assistance or possibly even future help in their own retirement years," Cochrane said.
So, how can someone best survive being sandwiched? Cochrane said the families that are best able to make this scenario work have some sort of agreement between the parent and the adult child, holding the child accountable for what they borrow.
"They require documentation," Cochrane said. "They require them to either submit their bank statement or their monthly budget to them."
