The term ‘squeezed middle’ refers to middle-income earners’ relative decline in real wages. But those looking after three generations at once – their parents, their children, and themselves – may also be feeling squeezed, and very much in the middle. You need to be a superhero to care for elderly parents while running a family and holding down a day job, but unfortunately very few of us have superpowers. It’s only when something goes wrong that we realise how much we are holding things together, and how it makes sense to plan for the future as well as coping with the present. So try this little life audit to see whether you are doing the rights things to protect your family and take some of the pressure off.
Is your home properly valued?
Omitting key items from your contents policy, under-insuring for rebuild, having the wrong locks, failing to read the exclusions – this could cost you if you have a break-in or a crisis. It’s time-consuming, but it’s important to get the valuation right.
What about you, the most valuable thing of all?
Have you worked out how much you are worth and insured your life accordingly? You’re worth the whole world, obviously, though you might have to settle for a little less than that.
Do you have a proper travel policy?
Before you go on holiday, take time to check you have the right level of cover for unforeseen events.
Since you’re not an indestructible superhero you might fall ill. If you have to take serious time off work, do you have a rainy day fund? Have you thought about income protection insurance, which could replace your earnings for up to a year?
You don’t need private medical insurance for your children because the NHS will always give them priority. Perhaps concentrate on protecting what is most valuable to them: their Facebook and Instagram accounts. We’re not being entirely serious, but it’s certainly smart to insure their smartphones against loss or theft. But make sure they know the rules or the policy will be worthless.
Speaking of smartphones, they’re really useful for getting your children into the squirrelling habit with pocket money apps that make saving easy and fun.
What about the future?
Do you have a plan to help fund your children’s university studies or put down a deposit on a new home? Putting £100 a month into a savings plan would turn into £13,294 after 10 years, based on an interest rate of two per cent. An investment plan, if it has enough time to ride out the market ups and downs, should do even better if you are prepared to take a little risk.
Are your parents’ financial affairs in order?
Make sure they know that having clear and up-to-date wills is the only way to ensure their wishes are carried out, and take some of the strain off you at a difficult time. Funeral plans could be a good idea if they may not have much cash left to leave.
Most people don’t need long-term care and it’s not something you should worry about. Look after the basics, especially your health, and you’ll be able to provide for all your family and ease the squeeze.
And finally, nobody can be a superman or superwoman all of the time. Taking time out to look after yourself is a necessity not a luxury when you’re looking after kids and parents. Don’t cancel that gym membership or restaurant loyalty card if it’s the only thing that keeps you fit and sane. You’re worth it!
Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.