Running a Multigenerational Household

According to our “African American Financial Experience” study, multigenerational households–with parents, adult children, and grandparents–are more common among African Americans. In addition, African American families are likely to provide support for their extended families, whether or not they are living under the same roof.


People in the “sandwich” generation—those squeezed between attending to the needs of parents and of children—often face additional challenges, including:

  • Balancing time between parents and children
  • Covering expenses, including day-to-day household expenses, and longer-term expenses such as children’s college, retirement, and parents’ health care
  • Choosing from among multiple competing financial demands for limited income
  • Deciding whether to pay down debt or save for the future

As a loving family member, if you are in this situation, you may be inclined to put the needs of your children and parents before your own. But a balanced approach to financial preparedness will help you better position your entire family for the future.


Balancing Everyone’s Needs

There are things you can do to help balance your family’s financial needs:

Managing Yourself

  • Save for a rainy day. Schedule automatic transfers to savings so that emergency funds accrue without your intervention.
  • Pay down debt. You may want to consolidate your debt where the interest rate is lower.
  • Save for retirement. Enroll in your workplace plan or set up an individual retirement account (IRA).
  • Consult with a financial professional. Since you are the center of your household, it’s important that you take measures to ensure that you can continue to support your family in the event something were to happen to you. A financial professional can help you determine what products are appropriate for you. Some products to consider are life and disability insurance, annuities, and mutual funds.  
Managing Your Parents    

  • Ask your parents the tough questions. Find out if your parents have a life insurance policy, annuity, pension, will or estate plan, long-term care insurance, etc. Consult with a financial professional to see if there are any products that can help.
  • Have parents help with the children, if possible. This can reduce or eliminate child care costs while building a close-knit family.
  • Look for employer and community elder care resources. If you are finding it difficult to balance work and your parents’ needs, check to see if your employer offers an elder care assistance program. If not, many communities have programs and centers that can help take the burden off of you.
Managing Your Children

  • Set schedules. Use one of the many centralized family schedulers to manage the complexity of comings and goings.
  • Teach your children about saving. By educating your kids at an early age, you’ll increase their motivation to save later. Start by having them earn an allowance by doing chores around the house and setting up a bank account for them to keep their earnings.
  • Start saving for college. As you’re juggling all your other financial matters, don’t forget about saving for your children’s education. Putting away even a small amount each month when they are young will help in the future.

The Prudential Insurance Company of America, Newark, NJ
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