Your Questions Answered: Giving Money to Grandchildren
Okay, let’s face it.
If you have grandchildren, they’re your world, even if they’re already grown.
It’s so easy to spoil them, and if you’re retired (or close to it), what else would you be doing with your money, right? Birthdays, holidays, graduations… it’s so easy to get caught with your wallet open, catering to their every wish.
But when is it too much? Let’s shed some insight on money questions people have asked me about their grandchildren.
Q: “Should I pay for their College/University?”
A: If you have the financial means to do so without impacting your financial plan, go for it! Ask anyone with student debt – taking it off their plate can be life-changing and free up money to buy a home, start a family, or begin investing.
Q: “Should I buy them a car?”
A: Maybe. Can you truly afford it, and is your grandchild responsible? If they’re likely to joyride with friends while skipping class, you might want to pass on buying them wheels. Tip: always check with your child before gifting something like this to your grandchild – this is too big a gift to just spring on someone.
Q: “The grandkids are young – what are the best birthday/Christmas/grad gifts?”
A: Money. Seriously! But not just cash-in-hand. Make an investment for special occasions on their behalf. A 529 college savings plan is a great way to go, but there are other investments you can make for them. In the long run, it will be more beneficial than a Minecraft toy playset or video game that gets forgotten in a week.
Q: “Should I confront my adult grandchild if they aren’t being financially responsible?”
A: That’s a recipe for disaster. That’s like telling somebody to ‘calm down’. It never works! You might instead have gentle conversations about their money habits and see if you can teach them some skills to benefit them rather than chastise them.
Ultimately, helping your grandchildren (or anyone) is your decision. Still, please ensure your generosity doesn’t threaten the stability of your financial plan.
“Don’t set yourself on fire trying to keep others warm.”
– Penny Reid
I get questions every day about money – so what are yours? What are your financial goals? If you have more questions than answers, I can help.
To book a 15-minute consultation and chat about your plan (where you are now, and where you want to be in the future), it’s easy – just click the buttons below.
