Grandparents Can Become Big Spenders For Their Offspring
The cost of raising children is well known. Recent estimates put it at about $250,000 before a child even enters college. But it's not just parents who end up paying a hefty "price." It's grandparents, too.
According to a January 2017 article in the Miami Herald, grandparents spend an average of $2,383 a year just to benefit their children's children. They pay for toys, school supplies, college savings, and even extracurricular lessons.
This breakdown shows the percentage of grandparents who give money to grandkids for each purpose:
College savings: 19%
Non-cash gifts: 39%
Cash gifts: 42%
School vacations: 27%
Family vacations: 16%
Meals out/entertainment: 38%
Extracurricular activities: 14%
Allowance/payment for chores: 10%
And it's not just money that grandparents give. More than half of millennial parents say their parents provide at least an hour of child care or household help each week. The average grandparent went all out, spending 48 hours a year on tasks including primary child care, babysitting, homework help, and transportation to after-school activities.
Some 40% of grandparents said they offered the help without being asked, and 43% said they did it because "it makes me happy." Just make sure you build this into your retirement budget.
This article was written by a professional financial journalist for The Hogan-Knotts Financial Group and is not intended as legal or investment advice.