A recent AARP survey of grandparents showed that 36% of those asked felt that “spoiling grandchildren by buying them too much” was part of a grandparent’s financial role. This result isn’t all that surprising. Spoiling grandchildren has been a time-honored right and tradition for grandparents for many generations. AARP has done similar studies many times with fairly consistent results.
What’s changing, perhaps, is the definition of spoiling. You’ve likely seen examples in your own life or through the media of spoiling taking on extremes. This occurs for a variety of reasons, but the most common are the relative young age of the average grandparent , their proximity to their grandchildren and the highly involved role they play in their day to day care.
When I was growing up, getting spoiled by my grandfather meant occasionally getting slipped a few dollars, or, if we were really behaving, a little chocolate syrup in our milk. Perhaps the biggest prize was the chocolate mints (specifically, Andes) that were kept in the small silver bowl on the living room coffee table. Were they my favorite candy? Not really, but for some reason getting the ok from Grandpa to have one made them taste better than any candy bar out there. These were very occasional, relatively small things that meant the world to me.
Per the same AARP study, today 1 in 6 grandparents provide daycare services for grandchildren. Nearly 40% have provided such care on occasion. More than 10% have a grandchild actually living with them. When a grandparent plays an active role in providing day care, regular babysitting or other support, what can be seen as a little harmless spoiling can become an expectation and way of life to an impressionable child. It is important that parents and grandparents evaluate sweets, fast food, cash, toys and other gifts to make sure that the occasional treat doesn’t become a full derailing of well intentioned plans to raise a healthy child.
Helping with education, medical bills or other living expenses is certainly another story, and one that should be decided on a family by family basis. Here again, though, special attention should be paid by the grandparent to how the support affects their own personal goals. With life expectancy creeping up each year, portfolios can be heavily strained by regular gifting to support a grandchild. Make sure you discuss with your financial planner how your gifting impacts your long term goals and be sure to set realistic expectations with family members.
As with so much in life, balance is the key. Ever-increasing pressures to give this and want that, if they go unchecked, can wreak havoc with future generations and our own financial goals. While the spoiling may be what makes you and your grandchild feel the best in the moment, it’s the life lessons and memories that can help frame a child’s long term perspective that they’ll really value in the long run.
Have a great week!
Chip Workman, CFP®