Being a grandparent can be one of life’s greatest joys. The pleasure of watching your children’s babies grow up and of spoiling them—without being responsible for the day-to-day child-rearing—can’t be beat. However, there is a financial cost that goes along with being an overly generous grandparent that many seniors simply can’t afford, according to a recent MoneyTalksNews article, “Being a Grandparent Can Take a Big Toll If You’re Not Careful” (July 2016).


The article reported on a 2012 AARP study1 that revealed one in four grandparents, many of whom are on a fixed income, spent $1,000 or more per year on their grandchildren. A grandparent who spends this amount while still working and saving for retirement is shorting his or her potential savings by thousands (especially when you factor in compounding), and an already-retired grandparent is simply spending more than most retirees have to spare. To curb this tendency to shower grandkids with expensive gifts, grandparents should remind themselves that the time spent with their grandkids is worth more than any bike or video game. Gift-giving can be done on a budget, as long as you stick to it.


There are many grandparents, specifically grandmothers, who are spending their money on the grandkids without getting to fully enjoy the traditional “spoiler” role. A recent Nextavenue article, “Grandmothers Caring for Grandkids: Work-Life Balance 2016” (July 2016), explored the struggle of women who provide day-to-day financial help and childcare for their (non-custodial) grandkids—while still dealing with the stresses of work.


Working grandmothers are increasingly spending their money on items like school supplies and clothing, as well as taking days off from work or completely switching careers to be available to care for a sick grandchild or take him to soccer practice or the zoo. The reasons these women provide so much support are complex and varied. Their adult children are often navigating a professional world that no longer provides them with certain things we used to take for granted from employers, such as paid parental and sick leave, health insurance and a comfortable living wage.


Unfortunately, providing so much support often results in a shocking lack of retirement savings and crushing debt. Working grandmothers in this position say that remedying the underlying economic and employment issues would help their families immensely.

Regardless of the financial hardship and stress of helping out their adult children and grandkids, working grandmothers, of course, still consider their grandchildren the greatest source of joy in their lives.


Are you still employed and helping to care for your grandchildren? How do you fit doting on them into your budget? Share with us.


1 AARP, Insights and Spending Habits of Modern Grandparents, March 2012,