Credit: Terrence Horan/MarketWatch
Do you know the reason why is it hard to get ahead financially as a Filipino? I’ll tell you. Once we land a job and start earning money, and be in the position of “financial capability”, we tend to provide financial assistance to our parents, grandparents, own children, and sometimes siblings, their kids, and to some extent, relatives too. Call it altruistic Filipino tradition but it does have a term in the personal finance space - Sandwich Generation. This is not unique amongst us as this holds true to many people. If this resonates to you personally, think about a typical sandwich delicatessen; one bread on top, one at the bottom, and in the middle is the meat, cheese, fresh lettuce, tomato, and the savoury spread. You are the middle yumminess; your parents and grandparents, the bread on top; your kids, the bottom bread. I could devour a delicious sandwich but in this case, it is not very appetising.
How costly is it to be in this situation? Expensive enough to hardly save for your own retirement. In the end, you will become dependent from your children; then it becomes a generational financial pressure, and the cycle continues.
My Personal Story
My family is not an exception to this. In fact, I belong in the Sandwich Generation Club. What an honor. Here’s my story.
In 2010, I helped my parents build a new house, whilst the old one has always been home, it was uneconomical for us to renovate it. I didn’t have the capital to get that project started, however; so off to the bank to borrow money. Of course, the new house needed a few furniture so I ended up borrowing more. At 21, I was instantly 6-digit in debt. Yes, gainfully employed but in debt neck deep. I had to pay the owed sum for 3.5 years.
At 25, my mother sought for my assurance that I should help the youngest with his tuition fees when he starts University. And, if possible, I shouldn’t get married until he graduates. Of course, I said, “Yes.” I was matured enough to understand that my parents were approaching retirement and the burden to pay for my brother’s fees wasn’t the best position to be in at an old age. I am paying for my brother’s tuition fee and allowance at present, he graduates in 2022. Two years to go! Dang!
Last year, my parents retired and I know for the fact that their retirement coverage from the Philippine government would not be enough to assist them when they get ill. I am preparing for that too.
My personal circumstances is not unique but never the worse. My parents NEVER milk me of money; they do the opposite. They push me to look after my finances and save for the rainy days. Equally praiseworthy is my younger brother - the most loving, understanding and clever lad that he is. On no account did he ask me for material things and has never expressed jealousy over the inflated lifestyle amongst his well-off peers.
To the contrary, the stories of other Filipinos are shocking - some unavoidable, others self-inflicted. Paying for medical bills, sending children, siblings, nephews and nieces to private schools, monthly family food allowance, house renovations or building houses for siblings, and so on. I am in no way demonising this, bet helping an ill family member get the best hospital treatment is the right thing to do. But perhaps, a public school is as equally effective to get educated rather than sending your children to expensive schools. And if your parents are still working, why send monthly food allowance? I believe this is worth pondering upon because the opportunity cost of all these has humongous ramifications towards your future financial health.
I’ve long accepted the difficult responsibility of ensuring our family tree will #SandwichGenxit. I and my brothers’ children shall be liberated from the costly Filipino “culture” that for years, has long been accepted as normal. Here’s a few tips.
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