For Grandparents, It’s Important to Not Forget the DebtAug 15, 2018
You love being a grandparent — spending time with your grandkids, treating them to outings and gifts and helping your millennial kids out with childcare. But are you forgetting about or neglecting your debt load and other financial goals and priorities?
A recent US study shows that grandparents are spending quite a bit on their grandkids (an average of $2,383 US per year). From special trips and outings to gifts and school supplies, these costs definitely add up and it may be causing some seniors to lose sight of things like reducing consumer debt, paying off their mortgage or saving for retirement.
In this episode of our BDO Debt Solutions Podcast, our Licensed Insolvency Trustees (LITs) discuss the danger of losing sight of your own financial priorities in order to help your grownup children and your grandkids. Boomers and seniors have a shorter window to achieve financial goals like debt repayment and saving for retirement than their millennial-aged kids.
To help you determine whether you may be helping out too much (and putting yourself at financial risk), our LITs suggest considering the following:
- Is your financial plan in order?
- Do you have consumer debt that you’re still paying off?
- Will the time or money you’re giving to your kids or grandkids affect your ability to meet your own financial goals?
- Are you dipping into your retirement savings (or putting off saving for retirement) to help?
- Will this affect your ability to care for yourself or afford long-term care when you’re older?
If you’re spending too much, it’s a good idea to take stock and decide how much you can affordably spend each year on your grandkids. Planning ahead always helps you stay on track. You can even create a grandparent budget to do so.
Check out this blog on parenting website Yummy Mummy Club to learn 10 ways a grandma (or grandpa) can offer emotional support to their grown kids at back-to-school time.