Are You Helping Your Kids and Grandkids? Here’s How to Avoid DebtAug 15, 2018
We’ve all seen the headlines about boomers financially supporting their millennial children, but what about when those children have children? How do you protect yourself, as a parent, from going into debt to assist your kids and grandkids? This month’s podcast is about how much time, money and support grandparents offer and what it’s worth in real dollars.
The cost of parenting and grandparenting
According to a US study conducted by TD bank, grandparents spend an average of $2,383 on their grandchildren each year. This includes RESP contributions, gifts, outings and extra-curricular activities. However, more than half of millennial parents report that their parents provide at least an hour of support each week through childcare or household chores in their home. Here’s some more shocking stats:
- The average grandparent spends 48 hours per week helping with primary childcare, homework help and transporting kids to after-school activities.
- Millennial parents estimate this work to be worth $300 per week or $15,000 per year.
- ¼ of Millennials who receive financial support say they couldn’t afford their current lifestyle without the help of their parents.
How to keep yourself from going broke
The good news is that the TD study found that 40 per cent of grandparents offered their support without being asked by their children and 43 per cent said it was because “it makes me happy”. So, how can you continue to support your kids and grandkids while remaining financially stable?
- Keep an eye on your budget
Adhering to a budget will help you meet your financial responsibilities and predict upcoming expenses.
- Don’t forfeit your goals
Whether you’re retired or approaching retirement, you want your money to stretch. That means you are not ignoring or risking your own financial goals in order to help your kids and grandkids.
- Don’t add to debt
Spoiling your grandchildren comes naturally, now that you have the time to enjoy it! However, overspending can lead to a heavy consumer debt load if you’re not careful. If you’re already carrying debt, look into your debt relief options or talk to a professional about repayment. Otherwise, avoid using those credit cards.