Grandparents Increasingly Involved in Grandchildren’s Finances

It is commonly known that around the world, there are several cultures where it is perfectly normal for grandparents to raise their grandchildren. In the United States, this hasn’t really been commonplace until just recently, when the number of child-rearing grandparents has risen dramatically.

Unfortunately, however, many grandparents are facing difficulties in making decisions related to raising the children, despite being responsible for their day to day expenses. This is because in Florida, grandparents have no legal rights whatsoever in regards to their grandchildren unless the parents allow it.

Decades ago, grandparents’ only financial contributions to their grandchildren were in the form of birthday presents, or gifts on special occasions. Nowadays, however, grandparents are increasingly paying for things such as swimming lessons, tuition, summer camp fees, etc.

According to a study performed by the AARP, roughly 25% of all grandparents admitted to spending more than $1,000 per year on grandchildren, and over 1/3 of all grandparents said that they at least help with daily living expenses.

Naturally, most of the blame for why this trend has shifted lately rests on the economy. Grandparents are often more wealthy than their children, with the income gap between parents and their under-35 adult children was a ratio of 47:1.

Another reason for the increased contributions from grandparents is due to divorce becoming more commonplace. Finances are often very unstable during times of divorce, so grandparents provide living expenses to ensure that children are able to make the transition smoothly.

Please stay tuned to our next entry, wherein we will talk about the current grandparent’s rights, as well as changes to the law that have been proposed.

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