How to Support Your Grandkids Without Adding to Your DebtAug 15, 2018
Being a grandparent is a wonderful and joyous experience. But with an increasing number of boomers and seniors financially supporting their adult children and grandkids, being a grandparent can also cause financial strain – on their own budget and potentially on their long-term debt relief and savings goals.
In this podcast episode, our Licensed Insolvency Trustees (LIT) from across Canada have come together to chat about the financial impact of helping kids and grandchildren, as well as tips and advice on:
- What grandparents need to consider before offering financial help to grown kids and grandchildren.
- How to provide other means of support (when you can’t or shouldn’t provide money) to your adult children when their kids head back to school.
- How to help your university or college-bound grandchildren.
A recent US survey found that grandparents with millennial children spend almost $2,400 USD (over $3,000 CAD) a year on their grandchildren. That’s a significant amount. And that doesn’t factor in non-financial support either.
The study also found that four in 10 millennial parents receive an average of 27 hours/week of support from their parents. Grandparents are taking their grandkids to school, helping with homework, providing before and after-school care and more.
What are a few things grandparents need to think about before offering their grown kids or their grandchildren financial assistance?
- Is your financial plan in order?
- Do you need to reduce your own consumer debt or pay off your mortgage?
- Will giving money impact your ability to achieve your financial goals, like accumulating enough retirement savings?
- Are you putting your ability to care for yourself later on in life at risk?
Try to keep the lines of communication open with your adult children. If you can’t contribute financially, be upfront and honest so that they have realistic expectations. Supporting your adult children and your grandchildren doesn’t have to mean providing money, and it doesn’t need to mean taking on new debt.
For ideas and advice about how grandparents can support their adult children and grandkids – especially during this expensive and busy back-to-school season – check out this episode of our BDO Debt Solutions Podcast.
For more suggestions on how Grandma (and Grandpa) can offer emotional support to their grown kids and grandkids, check out this blog by an experienced Grandma on the Yummy Mummy Club website.