Meeting the needs of the sandwich generation

Your children are moving out of home and you’re looking forward to having time to yourself and more spare cash. Then along come requests to help your youngsters buy a car, pay a removalist and rental bond, plus a few bills such as health cover until they get themselves established.

The road to independence for young adults can be an expensive one for their parents. The weekly cost of supporting an 18 – 24 year old can be up to five times that of a child aged from birth to four years, according to research by the University of Canberra and AMP.

Many parents are also helping out their elderly parents who are living on the age pension and struggling to meet the cost of home repairs or a move into retirement accommodation.

This is why the 45 – 65 age group is sometimes referred to as the “sandwich generation”, caught in the middle of caring for both children and parents.

You can be earning well and anticipating more disposable income, only to find the calls on your cash reserves are as strong as ever, but perhaps not as predictable.

You need cash available and can’t afford to have savings depleted by risky investment.

Term deposits are a secure option for investors who want to make their cash work by earning a higher interest rate than in many savings accounts.

You choose a term from as little as one month to ensure you have the best rate available and the flexibility to access cash if needed. At maturity, you can switch to another offer to maintain the optimal rate.

An alternative is to split the capital among a series of term deposits maturing at different times to meet your anticipated cash flow.

The financial costs of caring for loved ones and helping them to independence can be substantial. Term deposits are a low risk way to grow your cash and meet unanticipated expenses.

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