Standard financial advice usually suggests setting aside 20% for investments. But if you are supporting both your parents and your children, that 20% is gone before it ever reaches an investment account.
This article won't tell you to stop helping your family. Instead, we’ll discuss how to allocate your income so that all needs are covered—including your own—using realistic figures for monthly earnings between IDR 3 million and IDR 8 million.
Key Takeaways
- 90% of Indonesian workers support both their parents and children, yet only 14% feel truly financially secure.
- 83.74% of elderly Indonesians rely on the income of working household members, and only 5.01% live off a pension. This is the root of the problem.
- 61% of people cannot survive for more than six months without an income, even though the sandwich generation supports more people.
- 77% expect to keep working past retirement age. If that happens, your children will be the ones to bear the burden next.
- The 50/30/20 rule doesn't work because it lacks a category for parents. Use four categories: 40% for personal needs, 25% for family support, 20% for emergency funds and protection, and 15% for the future.
- If you can't do it all yet, follow this order: pay off high-interest debt, build a 1-month emergency fund, secure health insurance, build a 3-month emergency fund, and then start investing.
- Set fixed amount for your parents, not an amount that changes every month, and share the burden with your siblings.
- Preparing for your own retirement is not selfish. It is the only way to break this cycle for your children.
What Is the Sandwich Generation?
The sandwich generation refers to people who support two generations at once: their aging parents above them and their children below them. They are squeezed in the middle, like the filling of a sandwich. This term was first coined by Dorothy Miller, a social worker in the United States, in 1981.
You are part of the sandwich generation if your income is used for these three things simultaneously:
- Living expenses for parents Food, routine medication, electricity and water bills, or caregiving costs.
- Living expenses for children Schooling, formula, uniforms, or daily necessities.
- Living expenses for yourself and your partner Housing, work transportation, and daily meals.
If you only cover two out of the three, you are not truly squeezed yet. If all three are happening at once and none can be dropped, that is the condition of the sandwich generation.
The sandwich generation is not a specific age group. This is a frequently asked question, and the answer is not about your birth year. This position is determined by family circumstances, not age. It generally occurs between the ages of 30 and 50, because during that range, parents begin to stop working while children are still in school. However, some experience it in their 20s, especially if their parents fall ill early or they have to support younger siblings.
Why Are There So Many Sandwich Generation Members in Indonesia?
This is not about a lack of frugality or poor money management. The causes are structural, and there are four of them.
1. Almost all elderly people live off their children's income
According to BPS in the 2024 Elderly Population Statistics, 83.74% of the elderly in Indonesia rely on the income of working household members to survive. Only 5.01% live off a pension. Read those two numbers again: five out of every hundred elderly people have a pension, while eighty-three out of every hundred rely on the income of others in their household. That person is usually their child. If there is no pension, the child becomes their pension.
2. The economic condition of the elderly is also fragile
Statistics Indonesia (BPS) notes that 41.87% of the elderly belong to households in the bottom 40% of expenditure. So, not only do they lack a pension, but they are also in the lower economic bracket. This means there are no savings to fall back on before having to ask their children for help.
3. The number of elderly people is already large and continues to grow
BPS records that 11.93% of Indonesia's population will be elderly by 2025, with an old-age dependency ratio of 11.00. Roughly one in ten Indonesians is already elderly today.
4. Within one generation, the number will double
UN data cited in a Sun Life report shows that the population aged 60 and over in Indonesia will rise from 30.9 million people, or 11.1%, in 2023, to 64.9 million people, or 20.5%, by 2050. This burden will not diminish on its own.
Understanding this is important so you don't blame yourself. This situation is not the result of personal failure. However, you must still be the one to create your financial plan, because no one else will do it for you.
The Financial Condition of the Sandwich Generation According to 2026 Data
The four most important things to note from the table.
- 61% cannot survive for six months without income This is the reality of emergency fund figures. If they lose their jobs or fall ill, more than half of these people will run out of money before half a year has passed. The sandwich generation supports more people, so their risk is greater, not smaller.
- 55% do not have a financial plan beyond one year This explains why their situation remains unchanged year after year. If you only plan for next month, there is no room for future needs.
- 77% expect to keep working past retirement age This is a major red flag. If you never truly retire, the sandwich generation cycle continues to your children. They will end up supporting you, just as you are supporting your parents now.
- 62% have taken out a loan in the last year This is from an April 2025 YouGov survey of 962 sandwich generation respondents in Indonesia. The breakdown: 24% from family or friends, 22% using paylater services, 16% credit cards, 15% selling or pawning items, 13% from banks, and 11% from online loans. Of those in debt, 18% are frequently late on payments. Paylater and credit cards being in the second and third spots is a warning sign, as both carry high interest and are being used to cover recurring monthly expenses.
Actionable Financial Planning
The popular 50/30/20 rule doesn't work for the sandwich generation. That rule divides income into 50% needs, 30% wants, and 20% savings. The problem is that "supporting parents" has no place there, so it ends up being taken from the savings portion until it's gone.
A more sensible approach is to use four categories, with family support given its own dedicated place from the start.
- Personal and household needs, 40% Food, transportation, bills, and children's schooling. These are non-negotiable expenses, and they are intentionally given the largest share because this is what keeps you able to work.
- Parental and family support, 25% Monthly allowances, medication, and parental needs. Giving this its own category ensures it doesn't secretly eat into other budgets.
- Emergency funds and protection, 20% Emergency savings, health insurance, and other coverage. This category protects the other three when unexpected events occur.
- Future and investments, 15% Long-term investments and education funds. It is the smallest portion, but it is the most critical in determining whether this cycle continues to your children.
When translated into real figures. The three ranges below were chosen to cover the wage conditions applicable in 2026, when the lowest provincial minimum wage (UMP) was in West Java at Rp2,317,601 and the highest was in DKI Jakarta at Rp5,729,876.
These figures are not rigid rules. What matters is not the exact percentage, but that all four categories are present. The two categories most frequently neglected are the last two, which is why your financial situation never changes from year to year.
If a 25% allocation for family expenses feels too small compared to your current reality, that is actually a crucial insight. It means other categories are being squeezed to cover the gap, and usually, those being sacrificed are your emergency fund and future savings.
To choose how to track and divide these categories, there are several methods you can use, all of which are explained in the guide. budgeting and money management.
Priority Order, If You Can't Do Everything at Once
If your income isn't enough to cover all four categories, don't divide it equally. Follow this sequence instead.
- Pay off high-interest debt first Paylater services, credit cards, and online loans carry interest rates far higher than any investment return. Paying off debt with 3% monthly interest provides a greater benefit than finding an investment that yields 1% per month. This is the first step, without exception.
- Build an emergency fund of at least one month's expenses Not six months. Just one month to start. Targets that are too large cause people to give up before they even begin. With a 20% allocation, one month of expenses can be saved in about three months.
- Ensure basic protection is active BPJS Kesehatan for yourself, your parents, and your children. It is affordable but has a massive impact. One hospital visit for a parent without coverage can wipe out years of savings.
- Increase your emergency fund to three months of expenses With a 20% allocation, this will take about ten months. At this point, you are already much more secure than the average person.
- Start regular investing After completing the four steps above, you can allocate funds for your future without any guilt.
This order is important. Many people jump straight to step five because it looks the most promising, but without an emergency fund, investments will be liquidated every time an unexpected event occurs. Investments that are constantly cashed out aren't investments; they are just risky savings.
Here are the emergency fund targets based on income, assuming monthly expenses are around 65% of your income:
The six-month target column isn't just a random number. It is the threshold that separates you from the 61% of people who cannot survive for more than six months without an income.
Emergency funds should be kept in an easily accessible place, but separate from your daily spending account. If they are mixed with your shopping money, they tend to get spent unintentionally. There are various storage options, and the considerations for each are discussed in the review. emergency savings.
How to Calculate a Reasonable Amount to Send to Your Parents
This is the part most people fail to calculate, often just guessing each month. There are five steps.
- Calculate your parents' actual monthly needs It is not about how much you usually send, but how much is truly needed. Calculate it together with them: food, electricity, water, and routine medication. Often, the figure is lower than expected because what you have been sending includes non-essential items.
- Subtract any income your parents still have Small business earnings, room rentals, widow's pensions, or social assistance. If they have any, subtract it from their actual needs. Many people send the full amount even though their parents have some income of their own.
- Divide the remainder among siblings If there are three children and only one is sending money, the burden is three times heavier than it should be. This division needs to be discussed, not assumed.
- Set a fixed monthly amount A fixed amount is better than a fluctuating one for two reasons. First, you can plan your remaining income. Second, your parents can also plan their expenses.
- Check if the amount exceeds 25% of your income If the actual needs exceed 25%, it is a sign that the issue is not money management, but the level of income or the number of people sharing the burden. Both require different solutions: increasing your income or sharing the load with siblings.
Increasing income is indeed a popular choice. A Sun Life study found that 71% of Indonesian respondents stated they need additional income for future financial stability. So, if you feel your primary salary is not enough, it is not a personal failure.
When Can You Start Investing
This question often arises with a sense of guilt, as if investing is selfish when your family still has needs. It is actually the opposite. There are four things that need to be clarified.
- Preparing for your own future is not selfish Remember this figure: 77% of Indonesian workers expect to keep working past retirement age, and 40% have already lowered their retirement lifestyle expectations. If you do not prepare for your own future, you will likely join that group, and your children will end up supporting you later.
- However, the order still applies Investment begins after high-interest debt is paid off, an emergency fund of at least three months is saved, and basic protection is active. Before that, money is more useful in an emergency fund.
- Delaying for too long also has a cost Money left idle loses its value. A Sun Life study notes that 83% of respondents in Asia struggle to meet monthly needs due to inflation. Inflation means the same amount of money buys fewer goods each year. The mechanism is explained in the review on inflation and purchasing power. Regarding the difference in their functions, the comparison is in saving versus investing.
- Start with small, regular amounts Consistently saving IDR 450,000 per month is more useful than IDR 5 million once a year when a bonus arrives, because the former builds a habit while the latter is easily skipped.
If you choose higher-risk instruments like crypto assets, the portion should be small and taken from your future-oriented funds, not from your emergency fund. How to structure these proportions is discussed in the guide on portfolios for beginners. Before buying anything, study the instrument first through a do-your-own-researchapproach, and ensure transactions are made on platforms registered and supervised by the OJK.
The Hardest Part: Talking About It with Family
Even the best plan will fail if it isn't discussed. And this is the part that is almost always avoided because it feels impolite. Here are five things that help.
- Talk about the numbers, not the feelings Saying "I can only afford $1,000,000 per month" is easier to accept than saying "I'm tired." Numbers can be discussed, while feelings tend to trigger defensiveness.
- Bring the reasoning, not just the decision Explain that you are also setting aside money for your children's school fees and an emergency fund for urgent situations, including if your parents need help. Your emergency fund protects them as well.
- Talk to your siblings together, not one by one Separate conversations make everyone feel like they are already carrying enough of a burden. A group discussion clarifies the total needs and who is covering what.
- Start with small steps You don't need to resolve everything in one conversation. Reaching an agreement on a fixed monthly amount is already much better than having no agreement at all.
- Don't wait for an emergency Conversations about money are much harder when someone is sick and costs are urgent. Talk when things are calm.
How to Break the Cycle for Your Children
The ultimate goal of this plan is not just to survive this month, but to ensure your children don't go through the same thing. Three things are the most decisive.
- Prepare your own retirement fund, no matter how small This is the main differentiator. BPS data shows that only 5.01% of elderly Indonesians live off a pension, which is why 83.74% have to rely on their children's income. If you are in that 5% group, your children won't have to bear the burden.
- Ensure health protection is active for life Healthcare costs in old age are the largest expense that most often falls on children. Keeping your BPJS active shifts the majority of that risk.
- Teach your children to manage money early on Not so they can support you, but so they don't easily fall into consumer debt when they are adults.
This cycle won't break in a single year. But every month that you contribute to your future fund, the gap narrows.
Frequently Asked Questions
Conclusion
Financial planning for the sandwich generation isn't about choosing between your family and yourself. It's about making room for both from the start, so that nothing is taken from invisible budget categories.
The four most important things:
- Use four categories, not 50/30/20. 40% for personal needs, 25% for family support, 20% for emergency funds and protection, and 15% for the future.
- If you can't do everything yet, follow this order. Pay off high-interest debt, build a one-month emergency fund, secure health protection, build a three-month emergency fund, and then start investing.
- Calculate support for your parents using actual numbers, not estimates. Set a fixed amount and share the burden with your siblings.
- Fill your future fund category, no matter how small the amount. Only 5.01% of elderly Indonesians live off a pension. Joining that small group is the only way to ensure your children don't end up in your current position.
Disclaimer. All information in this article is for informational and educational purposes only and does not constitute financial advice or investment recommendations. The allocation figures mentioned are general benchmarks that should be adjusted to your individual circumstances. Crypto assets have high volatility and carry the risk of total loss. Conduct your own research and align your decisions with your risk profile and financial capacity.
