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Once your children are grown, you hope they can make it on their own without too much help from you. But in fact, kids and grandkids can be very expensive!
Many Americans today, even older ones who traditionally are considered more frugal, are spending—and taking on debt—because of their children and grandchildren. A 2005 study, "Living With Debt: A Life Stage Analysis of Changing Attitudes and Behaviors" by Robert Manning Ph.D. for LendingTree.com, found that even older life-stage groups, who more typically adhere to the "traditional" financial values of thrift and frugality, report using credit much more freely when spending on what they feel are "socially expected" lifestyle activities and accessories for their kids.
If you don't want spending on your children and grandchildren to put you in the poorhouse, you will want to help them become as financially self-sufficient as possible.
If your children are still at home:
- Make sure your children take personal finance courses in school. Visit www.JumpStart.org for resources.
- Show them how to save money and budget. Give them an allowance and help them make smart choices, but let them make their own mistakes, too!
- Explain to your children the costs of living on their own. Share your own household budget with them so they understand where your money goes and what your financial goals are.
If your children are older and still require financial help, you may have to learn how to set limits so they can learn to take care of themselves financially. Avoid titling your home, bank account or other assets in your children's names if they are not financially responsible.
Tip: Should you save for your children's college education or your own retirement? If you can't fully contribute to both goals, you may feel torn. Most financial experts recommend you first fund your retirement. Your children may be able to get scholarships, loans or grants to help pay for their educations, and they have their entire working lives ahead of them. You, on the other hand, may not be able to work in the future and you will want to be as little a burden as possible in your later years.
Elder Care
Many people, including retirees, find they need to care for aging loved ones, including parents and sometimes grandparents. The "sandwich" generation—those who must care for children and parents—are stretched the most. Caring for an aging relative can become a full-time job in itself, and can be emotionally and financially draining. Some of the tasks you may have to take on as a caregiver include providing:
- Medical help (administering medication, organizing medical care, taking your relative to doctor’s appointments)
- Financial help (making sure bills get paid, paying for certain expenses, managing bank accounts, and/or retirement income)
- Personal care (bathing, transportation, shopping, cooking, cleaning)
Do not feel guilty if you find yourself unable to do everything yourself, and do not be afraid to ask for help! Fortunately, there are excellent resources today that will help you find assistance (financial and otherwise) for your loved one, as well as for yourself.
A good place to start is the Eldercare Locator, a public service of the U.S. Administration on Aging which will connect you with state and local area agencies on aging and community-based organizations that serve older adults and their caregivers. Visit www.eldercare.gov or call an Eldercare Locator information specialist toll-free at 1-800-677-1116 weekdays, 9:00 a.m. to 8:00 p.m. (ET). Spanish-speaking Information Specialists are available as well.
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