Importance Of Financial Planning For An Average Family


Triple Trouble for the “Sandwich Generation”

Until recently, Fran and Ed Blake’s personal finances ran smoothly. Both have maintained well-paying jobs while raising two children. The Blakes have a daughter who is completing her freshman year of college and a son three years younger. Currently they have $22,000 in various savings and investment funds set aside for the children’s education. With education costs increasing faster than inflation, they are uncertain whether this amount is adequate.

In recent months, Fran’s mother has required extensive medical attention and personal care assistance. Unable to live alone, she is now a resident of a long-term care facility. The cost of this service is $2,050 a month, with annual increases of about 7 percent. While a major portion of the cost is covered by her Social Security and pension, Fran’s mother is unable to cover the entire cost. Their desire to help adds to the Blakes’ financial burden.

The Blakes are like millions of other Americans who have financial responsibilities for both dependent children and aging parents. Commonly referred to as the “sandwich generation,” this group is squeezed on one side by the cost of raising and educating children and on the other side by the financial demands of caring for aging parents.

Finally, the Blakes, ages 47 and 43, are also concerned about saving for their own retirement. While they have consistently made annual deposits to a retirement fund, various current financial demands may force them to tap into this money.


1.    What actions have the Blakes taken that would be considered wise financial planning choices?
2.    What areas of financial concern do the Blakes face? What actions might be appropriate to address these concerns?
3.    Using time value of money calculations (tables in the chapter appendix), compute the following:
a.    At 5 percent, what would be the value of the $22,000 education funds in three years?
b.    If the cost of long-term care is increasing at 7 percent a year, what will be the approximate monthly cost for Fran’s mother eight years from now?
c.    Fran and Ed plan to deposit $1,500 a year to their retirement fund for 35 years. If they earn an average annual return of 9 percent, what will be the value of their retirement fund after 35 years?


The question belongs to Finance and it discusses about a scenario of a family with high school and college going kids on one side and aging parents on the other. Increasing education costs for children on one hand and increasing medical expenses for elders on the other is posing an issue for bread-earners in this generation. Questions about this scenario have been answered in the solution in detail.

Total Word Count 511

Download Full Solution


  • HWA

    this is a very good website

  • HWA

    I have 50 questions for the same test your page is showing only 28

  • HWA

    hi can you please help or guide me to answer my assignments. thanks

  • HWA

    hi can anyone help or guide me to my assignments. thanks

  • HWA

  • HWA

    This solution is perfect ...thanks

  • HWA

    Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes

  • HWA

    Perfect bank of solution. 

  • HWA

    great !

  • HWA
    Paul Brandon-Fritzius

    thanks for the quick response. the solution looks good. :)

  • HWA
    tina Johnson

    thnx for the answer. it was perfect. just the way i wanted it. 

  • HWA

    works fine.