Being a grandmother or grandfather is joyous time that comes from having a family. With all the special trips and gifts given out, it might seem like being a grandparent is one big spending spree with no end in sight — but that can be be hard on the budget.
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Data from The Senior List shows that America’s 67 million grandparents spend $264 billion annually, or about $4,000 per family, on their grandchildren. This goes far beyond the occasional toy.
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Where That Money Goes
The study discovered that one in 10 grandparents in the U.S. delayed retirement or took on debt to help grandkids pay for tuition, house payments, meals and other expenses.
Currently, many Americans are feeling a financial crunch, trying to keep up with affordable housing in their neighborhoods or just struggling to pay for the high price of groceries. This pressure is particularly felt with older adults, most of whom are on a fixed income after retirement and can only stretch their dollars so far, even when it comes to their grandkids.
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Necessary Expenses
In The Senior List’s study, findings showed that the average total annually spent by seniors on their grandchildren was about $3,948. Beyond gifts, this sum included cost of living expenses, such as food, as well as long-term goals, such as college fund contributions. The study noted, “One in five supporting grandparents feels pressured to contribute more than they can afford.”
More data pointed to the 12% of grandparents who offer aid in paying their grandkids’ living expenses, whether it be rent or a mortgage payment. Conversely, 16% noted that they lived with at least one grandchild to help offset the family cost of housing.
Where the Money Comes From
Of those who participated in the study, 26% of the older adults reported living more frugally in order to support their grandkids. This took on different forms of making ends meet, such as postponing retirement.
The survey found that 50% of grandparents would be willing to postpone retirement if it meant helping their grandkids, while 40% would come out of retirement to do the same thing.
Non-Monetary Support
Not all support comes in the form of money, however. The findings also showed that 94% of the older adults surveyed “cited ways they supply non-financial support to grandchildren, most often via building bonds, offering advice, imparting family traditions or supervising youngsters and helping with schoolwork.”
While these might not offset the costs a family feels as a whole, they are non-expenditures that build healthy habits so that grandkids can feel independent and supported on their own.
How To Help Your Grandkids Without Sacrificing Too Much
Even so, 63% of grandparents noted that the happiness and wellbeing of their grandchildren was worth any financial sacrifice. Economic factors, however, have made it harder and harder for grandparents to help make those dreams come true, with half of the respondents reporting that inflation and other economic issues have caused them to reduce the amount they spend on their grandkids.
The study concluded by offering advice that families as a whole should strategize on how to set money aside for grandchildren, so it does not all fall on the grandparents. From investment planning to college savings accounts and estate preparations, there are lots of ways that families can work across generational divides to make sure all are taken care of.
There is even the new “grandparent loophole,” which permits grandparents to contribute to 529 savings accounts for their grandkids’ education without putting the kids at risk of losing eligibility for financial aid.
So while it might not be cheap to be a grandparent these days, there are plenty of ways to give back to the grandkids — and make sure you’re financially stable, as well.
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Sources
TheSeniorList
This article originally appeared on GOBankingRates.com: How Much Money Does It Take To Be a Grandparent in America? The Amount May Shock You
