Grandparenting in This Economic Downturn

Seniors Must Make Hard Decisions Helping Relatives in Need

Jan 17, 2009

The deteriorating economy is a hardship for grandparents who run the risk of overextending themselves financially and physically to help family members in a pinch.

Faced with rising prices of fuel and food, layoffs, devaluation of stocks and bonds, Ponzi schemes, bank meltdowns, and the whittling away of savings, seniors in retirement, many of whom are living on a fixed income, have good cause to be fearful of the future for themselves and their progeny.

Grandparents as Bankers

One of the greatest joys of being a grandparent is to overindulge the grandkids. In a report issued by Marketingvox, today’s grandparents spend billions of dollars on their grandchildren per year – nearly $1700 on average on every new grandchild. And up until now, this generation of grandparents has had the means to foot the bill for daycare, vacations, as well as fund college tuition.

How could seniors afford to be so generous? One explanation is that they are younger and healthier than when their parents became grandparents (the average age according to one study is forty-seven, and they can expect between thirty and forty years of grandparenthood). Therefore they have had a chance to accumulate wealth and had more disposable income than their children.

Goodbye to Deep Pockets

Unfortunately, the tide may turn. Even before this economic downturn, according to the Boston Study of Retirement Trends) there is the risk that 35% of the upcoming crop of seniors can expect a 10% decline in their standard of living when they stop working.

Does that mean that grandparents should turn a deaf ear when asked to help? Of course not. It suggests seniors need to be prudent about outright gift-giving, which is one of the most common mistakes seniors make, notes Caitlin McDevitt [Newsweek, Dec. 1, 2008].

In summary, only give what you can afford to give comfortably, and that goes for your time as well.

Grandparents as Caregivers

The growing involvement of grandparents as caregivers has been a dramatic a change in the American family life. Historically, minority grandparents were more involved raising their grandchildren, but because of the two-income family and the number of single-parent households, and with adult children having to cut back on expensive daycare and nannies, grandparents from all walks of life are pitching in.

Case in point: Michelle Obama’s mother Marian Robinson, 71, may be moving into the White House to take care of the two little girls.

Needless to say, even the fittest grandparent soon discovers how exhausting it is to run after a toddler and cart around a teenager. The best advice is to not be bullied or become guilt ridden if your child demands to much of your time. You’ve been there, done that. Be upfront about how much you can handle and your physical capabilities.

Arrange for back-up. Prior to the baby boomer generation, it was usually Grandma who became involved with the grandchildren because she was the stay-at-home mom, and that was the expected role. Like their sons, many grandfathers know how to change diapers and prepare formula Since there are more intergenerational families than ever before. great-grandma or your aunt or uncle might be happy to help out.

If you are making financial sacrifices to take charge of your grandchild, you might ask for some small remuneration to cover personal expenses. There are caregiver agreements also known as personal-service or personal-care contracts that can reduce the tension among family members. Be aware these are not considered gifts but rather compensation.

Return to Traditional Family Values

During the Depression families lived together, vacationed together and spent more quality time than money on entertainment. Bonding was the upside to hard times. There was a return to traditional family values.Looking at life this way, the bleak economic picture may not be so bleak after all.

Meet the Grandparents Marketing Forum: Grandparents Spend Billions on Their Grandchildren: Marketingvox. 2008.

Munnell, Webb, Delorme. A New National Retirement Risk Index. Boston College, June 2006.

Temlock, Marsha. Your Child's Divorce: What to Expect, What You Can Do. Atascadero, California: Impact Publishers, Inc. 2006.

The copyright of the article Grandparenting in This Economic Downturn in Senior Finances is owned by Marsha Temlock. Permission to republish Grandparenting in This Economic Downturn in print or online must be granted by the author in writing.