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Money November 2012

Aid for Age

Grandparents’ Gifts in Hard Economic Times

By Tait Trussell

Nearly half of those surveyed pointed to the stagnant economy as the reason for the need for financial support. “A third of grandparents are helping monetarily in spite of their belief that such assistance is having a negative impact” on their own financial situation.

We can hardly afford it; but we do it anyway. It’s for our beloved grandchildren.

Nearly two-thirds of the nation’s grandparents have given financial support or monetary gifts for their grandchildren over the past five financially stressful years.

From those generous grandparents, the “average amount given for all grandchildren was $8,289. More than half gave up to $5,000.”

This report of generosity comes from a study conducted by the MetLife Mature Market Institute in conjunction with Generations United, a multi-generational advocacy organization.

We may well be spoiling some youngsters. But in other cases it’s essential. In most cases, grandparents also are a positive influence on their grandkids. They can be influential regarding values, civic engagement, even cooking.

There are 70 million grandparents in the U.S. now; obviously more than ever before.

Nearly half of those surveyed pointed to the stagnant economy as the reason for the need for financial support. “A third of grandparents are helping monetarily in spite of their belief that such assistance is having a negative impact” on their own financial situation.

Cash was the most common form of financial support. Aiding with clothing was on top in help for grandkids. “Some 43 percent of grandparents gave clothes, 33 percent was for undefined general support.” Twenty-nine percent was for education, including preschool through private high schools, tutoring, college tuition, and graduate school.

“The top average dollar amount spent per grandparent was $23,068 for investments, $8,276 for education, and $6,742 for a down payment on a grandchild’s home.”

In the study, the typical grandparent is a grandmother over the age of 65 who has four grandchildren from ages 5 to 17. While one of the grandchildren lives within 50 miles, she also has at least one living more than 500 miles away.

Typically, the grandmother is retired, and she most enjoys communicating with her grandchildren by phone. She rarely sends letters. She “doesn’t live in a multi-generational household or have grandchildren who live with her, although she has several friends who do.”

She occasionally provides care for her grandchildren and thoroughly enjoys it. “She loves family celebrations with her grandchildren and enjoys going out to eat with them.”

Passing down values to her grandchildren is important to grandparents. Honesty is cited as the most important.

She volunteers in her community with non-profit or faith-based organizations. “Civic engagement is important to her. She votes regularly and occasionally campaigns for a favorite candidate or works at a local polling place at election time.”

She prefers to provide smaller gifts over a lifetime to help her grandchildren’s current needs rather than leaving a large sum on her death. She rarely gives financial advice to her grandchildren. When she does she advises to start saving early and to avoid debt.

She wants her children to get a college education, be self-sufficient, and healthy. She is probably a bit biased because she sees the grandkids as “beautiful and with good personalities.”

Generations of grandparents have long held a traditional role in caring for grandchildren. “Most parents would prefer to have a family member care for their children, and according to the U.S. Census Bureau, grandparents take care of 23% of preschoolers while mothers work.” This is roughly equal to the percentage of children who are in organized pre-school programs.

Some grandparents provide before or after school care, and grandparents are often the “back up plan” for parents when their regular daycare provider is unavailable or they have a sick child. Many grandparents provide care on an intermittent basis.

The study also notes “grandparents are making added use of technology to interact with their grandchildren, albeit reluctantly in some cases.” Although they prefer face-to-face communicating and phone calls, “12 percent are using Skype, 31 percent use e-mail, and 24 percent use Facebook.” None reported using Twitter.

For those grandparents who believe grandchildren will live as well as they have, “they credit such elements as access to a good education, values, family influence, and support as the top reasons.”

For the grandparents who don’t believe their grandchildren will live as well as they have, most blamed external factors including the poor economy.

“Driven by the economy, housing crisis and caregiving needs, among other trends” there also has been an increase in multi-generational living in recent years, as reported by the Pew Research Center, The MetLife Report on American Grandparents, Generations United, and other organizations.

 

Tait Trussell is an old guy and fourth-generation professional journalist who writes extensively about aging issues among a myriad of diverse topics.

Meet Tait