One important consideration for grandparents raising grandchildren is the new grand family financial picture. What do you need to know?
Let’s chat about it via the basic budgeting decisions all families must make.
1. Monthly income:
The first consideration will be what is the base income for budgeting.
Are you, as grandparents, still in the workforce earning income? Are you on fixed income via social security, pension, or retirement account distributions? Are you a year or five years from such retirement distributions? Can you increase your monthly income to handle additional expenses by bringing children into the home?
2. New expenses:
Bringing grandchildren into a home may bring many expected and unexpected new expenses.
We’ll address housing in more detail below, which is a big consideration. Many empty nesters downsize their homes for both financial and simple reasons. If a child or children enter the home permanently, is there enough room, or will a move be required? Can a home addition cover the needed space?
What about transportation? Is a return to the minivan days necessary?
Are there new educational expenses that must be met? Tuition? School supplies? Uniforms? Sports?
Medical care expenses differ for young ones than for elders, and additional insurance or Medicaid may be needed to help ensure that health needs are met.
Are there programs available to help assist with expenses or cover expenses like utility bills? Depending upon circumstances, the new grand family might be eligible for state assistance or community charitable programs.
Childcare needs for those still in the workforce will not be a small matter. Are the finances available? Is it more efficient to consider an early retirement? Are there public assistance programs that might help? Other family members?
While many of us may not want to ask for help, the welfare of our grandchildren should be the first consideration in making all such decisions. In almost every circumstance, they are the innocents in the situation, and we want to provide them with the security and care they need to mature into competent adults.
3. Extras
If we step back into child rearing, things like vacations, field trips, and education take on a new dynamic in our lives. Once again, we are training young minds and want to open up the world to them in various ways.
What can the budget handle regarding providing in-person or virtual experiences to help round out their education?
Fortunately, today, there are many virtual experiences that grandparents could research and provide opportunities that may not have been available during their children’s formative years.
Sadly, one financial matter that might also need to be considered is legal expenses. Some difficult family situations may require years of ongoing legal battles to meet the grandchildren’s health and safety needs appropriately.
Do you have the finances to finish the legal battles that might be part of raising your grandchildren?
Grandparents raising grandchildren may occur in a variety of life situations. It can be a most noble endeavor for certain. It is not always easy in its implementation. We encourage grandparents to consider every avenue of possible assistance and get creative.
Can you coop some needs like childcare with other families? Are there grants available in your community for assistance, home improvements, or the educational needs of grandchildren? What about tax savings?
Contact state or community programs that work with child and family welfare. Talk with your accountant and banker. They may be aware of programs you’ve never heard of and didn’t know existed.
Are there tax benefits that might reduce your tax burden?
In short, explore every avenue you can think of, then ask your friends and professional advisors for suggestions.
If you are a grandparent raising grandchildren, be courageous and persistent in finding ways to meet the needs of the grandchildren you love!