Family Formation & Housing

For young couples starting families, buying their first home and/or other real estate. Covers mortgages, credit cards, interest rates, children’s education savings plans, joint accounts for couples and the like.

A Financial Guide for the Sandwich Generation: Navigating the Challenges of Caregiving

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By Aman Raina, MBA

 (Special to Financial Independence Hub)

As an investment coach, my job is to educate and empower people with the knowledge to make informed investment decisions and set them on their journey towards financial freedom. However, over the last several years, I’ve found myself on a unique financial journey of my own.

Several years ago, my father was diagnosed with dementia. As his ability to manage his and my mother’s financial affairs began to diminish, I stepped into the role of their primary caregiver. This responsibility, layered on top of raising my two young boys, growing my investment coaching practice, and navigating a global health emergency, placed me firmly within the Sandwich Generation.

The Sandwich Generation refers to those caught in the middle of caregiving, balancing the needs of aging parents with the needs of their own families. According to a report by the Pew Research Center, nearly half (47%) of U.S. adults in their 40s and 50s fall into the Sandwich Generation. They are responsible for a parent who is 65 or older and either raising a young child or financially supporting a grown child.

In Canada, according to a 2020 report from Statistics Canada, around one in four Canadians aged 15 and older (7.8 million people) provided care to a family member or friend with a long-term health condition, a disability, or problems associated with aging. However, these figures likely underestimate the true prevalence of caregiving, especially in the context of the COVID-19 pandemic, which has increased the demand for home care.

With an aging population, these percentages are predicted to increase in the coming years, further magnifying the importance of addressing the challenges faced by the Sandwich Generation and all caregivers. It has been and continues to be an experience that has been for me mentally, emotionally, and physically stressful, filled with difficult conversations, worries about the future, and moments of feeling overwhelmed.

Despite my financial background, there were times when the responsibilities felt like a juggling act. The multitude of financial decisions to be made, from managing cash flow and long-term care planning for my parents to ensuring the financial stability of my own family, felt daunting. If I was experiencing this, I shudder to think what others who were not as well-versed financially were trying to cope?

Support from Caregiver Groups

In seeking support, I turned to various caregiver groups. It quickly became apparent that many others were grappling with the same challenges. They, too, were struggling to tackle the unique financial demands of being part of the Sandwich Generation.

From my experience, I found the core areas caregivers need to focus on revolved around these critical financial issues: Continue Reading…

How to Balance Saving for a Home and Starting a Family

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Image via Pexels

Navigating the financial challenges of saving for a home while starting a family can be daunting.

To help you find a balance, we’ve gathered ten insightful tips from CEOs, business owners, and financial experts.

From creating a realistic family budget to exercising patience and smart spending, let’s explore these strategies to help you achieve your financial goals.

 

 

  • Create a Realistic Family Budget
  • Leverage First-Time Homebuyer Programs
  • Reevaluate Spending Habits
  • Establish Separate Accounts for Goals
  • Prioritize Consistent Savings and Budgeting
  • Consider the “House Hacking” Strategy
  • Avoid Lifestyle Creep, Automate Savings
  • Trim Expenses, Seek Additional Income
  • Explore Alternative Homeownership Strategies
  • Exercise Patience and Smart Spending

Create a Realistic Family Budget

My top tip for balancing the financial goal of saving for a home while starting a family is to create a realistic budget. Take the time to review your current budget and account for earnings, current expenses, and estimates for future expenses. Kids are expensive: they can cost $20k or more in the first year alone. 

Your priority is to keep your kid safe, fed, and loved. Kids don’t care if you’re a homeowner. Once you have a good sense of what you’re doing with your money each month, put aside a reasonable amount each month to save for your home. 

If you’re a few months out from buying, consider investing the funds in something with a fixed interest rate, such as a CD. It’s safer than investing in the stock market and has a higher return than most savings accounts. — Jeremy Grant, Founder and CEO, Knocked-up Money

Leverage First-Time Homebuyer Programs

First-time homebuyer programs are designed to make homeownership more affordable and accessible. These programs provide benefits like down payment assistance, lower interest rates, or reduced closing costs. 

Research and identify the programs available in your area, offered by government entities or local financial institutions. Eligibility criteria may include income limits or credit score requirements, but many programs have flexible guidelines. If it all seems overwhelming, work with a knowledgeable mortgage lender or loan officer to navigate these programs effectively. — Mike Roberts, Co-founder, City Creek Mortgage

Reevaluate Spending Habits

Sit down and have a priorities conversation. Are you spending a lot of money in areas that don’t actually make you happy, just because you’ve always had the income to afford it? Just because you can, doesn’t mean you should.

Of the three to four things you spend lavishly on, what if you kept only one of those things — whichever makes you very happy to spend lavishly on it — and you downgraded the rest?

Every family can find at least one area of money being spent every month that doesn’t nearly matter that much to them but has become a habit. Which ones bring you true joy, and which ones have just become “the way we do it”? — Alex Boyd, Owner, Mindfully Investing

Establish Separate Accounts for Goals

The one tip I recommend for balancing the financial goals of saving for a home while starting a family is to have different accounts for each goal. I started doing this after reading The Richest Man in Babylon.

I started by saving 10% of my income, then divided everything else to pay for household bills and debts. After a few months, I increased this amount to 12%, then 15%, until I hit 35%.  Continue Reading…

Long-term Financial Concerns when moving to a New Region

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Image Source: Unsplash

By Beau Peters

Special to Financial Independence Hub

There are many reasons that people may move to a new state or province, including job opportunities, a change of pace, or wanting to be closer to family. However, one of the major factors in relocating is that where they currently live is more expensive than where they could be.

It’s easy to live in the now and make a drastic change because you believe the grass is greener on the other side, but you must also prepare for the future, and be aware of how your finances could be impacted when you move across state lines. Here are a few long-term financial implications you’ll want to keep in mind before you go.

Cost of Living

Some people move to another state because they like the weather or have friends they want to be closer to, but they’re shocked when they realize that the price of living is exponentially higher than the place they left. Some states have higher prices for the things we buy most, and the costs will likely stay that way for the foreseeable future.

We’re not just talking about the price of milk or groceries either. Costs can vary for many products and services, including healthcare, utilities, gasoline, etc. Before you relocated, research how the costs will affect you personally. You may want to reconsider if you know you’ll have a long commute to work and discover that you’d be paying 50 cents more per gallon of gas. Search online for a cost comparison calculator, which you can use to research the potential costs and make an educated decision.

Sometimes you must move for non-negotiable reasons, such as job opportunities or to be closer to family. If that’s the case and you know that the new state will be more expensive, then you may need to make some adjustments now to reduce costs — especially if you’re moving with young children. Though the actual process of moving with young kids can be difficult, there are ways to mitigate those challenges before, during, and after the move. Mapping out the route you plan to take ahead of time and arranging for childcare the day of the move are both ways to reduce stress during your relocation.

However, beyond the move itself, you have to be prepared for higher costs while raising your children, which may mean dealing with more expensive childcare, healthcare, and school expenses for years to come. These expenses shouldn’t necessarily prevent you from moving, but you should take them into account to ensure you’re making the right decision for your family and finances.

Taxes will be Different

Many people get excited because they hear that the cost of living is less in another state, but they often forget how taxes come into play.

One talking point that gets a lot of folks fired up is when a state doesn’t have an income tax. That’s the case in nine U.S. states, including Florida, Nevada, and Washington. However, you may not save as much money as expected because the states need to make that money up somehow. They often do so by charging more for sales, property, and estate taxes. If you buy a home, the property taxes can be a significant shock every year, so do your research. Continue Reading…

65% of Americans say partner having too much debt is a marital dealbreaker

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65% of Americans say their partner having too much debt is a dealbreaker in deciding to get married. Little wonder that the national marriage rate in the United States has declined 60% over the last 50 years.

Source: Clever Real Estate — Marriage Survey, May 2023

According to the Marriage Survey of 1,000 American adults conducted by Clever Real Estate in May (see graph above), financial stability is a primary purpose for marriage, as reported by 1 in 5 Americans (20%). In fact, 19% admit they would marry solely for money reasons (19%). Entering into the calculation are factors like high inflation, escalating living costs, and an expensive real estate market.

While marriage positively impacts finances for 66% of couples, only 54% of married couples discuss finances regularly, and 7% never broach the topic.  53% favor separate bank accounts. However, married women are 10% less likely to manage finances in their marriage than men.  Money-related issues contribute to about 1 in 6 divorces (16%). Looking back at their lives, 10% of married respondents wish they chose a partner more financially responsible.

For more on Americans’ views on marriage, read the full report: 2023 Data: 1 in 4 Americans Think Marriage Is an Outdated Concept

Here are other highlights:

How cent-sible mothers can give their children financial independence

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Image by Unsplash

By Anna Smith

Special to Financial Independence Hub

As a mother, I know the importance of raising my daughter to be independent and confident. One of the most significant ways I can do this is by instilling in her the value of financial literacy. By teaching her to be financially independent, I am setting her up for a future where she can make sound decisions with money and have the freedom to achieve her dreams. I feel every mother should share this responsibility and nurture the financial skills of their children, especially when we consider the uncertainties of the current global economic climate.

Growing up and learning to manage money through lived experiences, I discovered that some of those life lessons can be painful. My immigrant parents were so focused on working hard to provide the basics for the family, financial literacy lessons weren’t really a priority for my sister and me. All we were taught was to save and keep on saving. In fact, my sister and I would sometimes skip lunch at school just to save the allowance our parents gave us. I learned the hard way that while saving is part of being financially literate, it can’t just stop there; a significant next step is to find safe, reliable methods to growing your wealth.

Not knowing better, when I was 18, one of the earliest financial mistakes I made was getting multiple credit cards, which eventually resulted in a lot of debt (because which teenage girl doesn’t like shopping?). I had to work hard to pay it off and it was a tough lesson to learn, but it was valuable because it made me realize the importance of being smart about money from a young age.

After that, I started seeking support to become more financially literate from any source I could get my hands on. The internet was my best friend and I got into the habit of listening to podcasts about investing and best financial practices. When I started working, I was lucky enough to find a trusted mentor who taught me that putting 75 per cent of my paycheque toward smart investments was smarter than spending the money on any big-ticket item immediately.

As I became better with money, I went from only knowing how to save money to growing my wealth through investing in stocks (ETFs) and real estate and having a diverse portfolio. When it comes to investments, I now know it’s important to maintain both passive and aggressive investments. Having said that, choosing between good investments and bad ones can be daunting and that’s where financial advisors come in. Engaging a trusted advisor who is experienced in investing in different asset classes can make all the difference in the world because they often have access to wealth management tools and data that make investment proposals more reliable and easier to understand.

Teaching children about saving and investing — and the mindset behind both

Although I eventually found my financial footing, others are not so lucky and many have never been able to recover once they get into debt, which can be crippling. Now that I have a family of my own, one of my top priorities is to make sure my daughter has a strong foundation in financial literacy, with all the tools she needs to make better decisions when managing money.

One of the things that we’ve started working on together is to get her to save regularly, like I did as a child. But more than teaching my daughter good saving habits, I believe what’s important is to show her the difference between the money-going-out and money-going-in concept. Very often, children are no strangers to the former because they see us making purchases daily and this makes it easy for them to learn spending (or worse, impulse spending). The latter, however, is more difficult to emulate because they rarely witness the act of saving. This is especially true now that we live in a world where most financial transactions are digital. Though this speaks to the convenience of innovation, how do we curb impulse spending in our children beyond merely saying “no” (and parents, I’m sure you’ll agree that saying “no” doesn’t always elicit the best response from children)? Continue Reading…