Financial Boundaries With Grandchildren: A Case Study

Many grandparents wish that they could grant their grandchildren’s every wish, but for most, financial restraint is a must. Today’s kids are bombarded with advertising from a young age, making them prone to wanting more material things than kids from generations past. Despite the influx of commercials geared toward kids, grandparents are wise to exercise caution when spending on their grandchildren.

One Grandfather’s Story

Richard has three grandchildren, ranging from ten years old to twenty. He describes himself as an indulgent grandfather, “probably too indulgent,” he says, but he has been able to find a balance between pleasing his grandkids and staying within his budget. Additionally, Richard feels strongly that grandparents shouldn’t make it their goal to spoil the grandchildren. “At times,” he says, “I wish I was a lot more ‘comfortable’ so that I could spend more, but it is important for kids to learn that they need to work and save for things that are important.”

Richard definitely has the right idea. Parents and grandparents may bring children temporary happiness when they shower them with gifts, but kids gain a great deal more in the long run when they are taught the value of both money and hard work. Additionally, when children aren’t given presents as simply a matter of routine, they learn to have a greater appreciation for the occasions when they are treated to something special.

Age and Opportunity

Since there is a significant age difference between Richard’s oldest grandchild and his youngest, it makes sense that he doesn’t strive to spend the same amount on each of the children. His oldest granddaughter’s needs are quite different than those of her younger siblings, so Richard doesn’t worry about “keeping it even,” a concern that many grandparents express. He does tend to spend fairly evenly on the two younger kids, but as he says, “Katy is a little more high maintenance.”

Katy, Richard’s eldest grandchild, is currently continuing her education, and has sought student loans in order to achieve her educational goals. He does sometimes feel pressure to spend more than he does, especially on Katy, but understands that like all grandparents, he can only do what he can do. “Her needs are beyond my abilities,” says Richard, admitting that when he has to deny a request from his grandchildren, he feels guilty.

Following the Parents’ Lead

In some families, well-meaning grandparents cause discord by being overly-indulgent with their grandchildren, sometimes undermining the very lessons that the kids’ parents work hard to instill. Richard though, is well aware of the importance of deferring to the parents. When asked if he has any advice for grandparents about establishing financial boundaries with their grandchildren, Richard replied, “Be very careful about spoiling the grandkids. Keep the parents involved so there is no conflict with the parents’ goals.”

The Bottom Line

Grandparents often share very special bonds with their grandchildren. Unlike parents, who must be constantly diligent about meeting their children’s basic needs, grandparents are often free to focus on having fun with their children’s children, so there is less likelihood of conflict between the two generations. While most grandparents would probably enjoy indulging the whims of their grandchildren, it is enough for them to simply spend time with the kids—spending money is nothing more than the frosting on the cake.