Coping Financially When Raising Your Grandchild

Raising a child can be a very expensive endeavour. For grandparents who may be raising a grandchild the financial burden can often be especially cumbersome since they may no longer be in their earning years.

Piggy Bank
Photo by Fabian Blank on Unsplash

While some grandparents may find themselves in a comfortable financial position others will need to explore available options to help them cope with the additional demands placed on their budget.

A Gift of Love

While there is no doubt that taking on the responsibility of rearing a grandchild (or multiple grandchildren) is a generous and loving thing to do, grandparents must be aware of their possible limitations, physically, emotionally, and financially.

Grandparents who re-enter the world of child rearing often find themselves in an awkward situation, socially. Their peers are often enjoying the freedoms that come when the children are grown, while the parents of their grandchildren’s friends may be decades younger, leaving grandparents feeling a bit alone and isolated.

Finding support is important, though, so that grandparents can continue to live active, happy lives. Some support may come in the form of friendships and memberships to social clubs, while equally important help should be sought to help grandparents who may be struggling financially.

Reworking the Budget

Retirement is a time that most people look toward as one of relaxation and ease. For grandparents who choose to raise a grandchild, though, their funds are not simply allocated for holidays and leisure activities.

Children’s needs, from the everyday expenses of food and clothing to consideration of an extended education, can take their toll on even the most generous of grandparents.

Early on after deciding to raise a grandchild, grandparents should sit down for a realistic look at their financial profile. Savings, stocks, bonds, real estate and other assets must be weighed against anticipated expenses.

A financial planner may be of assistance in helping grandparents to formulate a plan that will assure that their needs, as well as those of their grandchild can be met.

Financial Assistance

While it can be difficult to admit that you need help, financial assistance is available for grandparents who find that raising a grandchild is impossible because of financial limitations. If the situation is permanent, some relief may be had by claiming the child benefit and child tax credit.

Additionally, it may be wise to seek a Residence Order or Special Guardianship allowance. Raising kids is costly and there is no shame in taking advantage of programs that are designed to help.

Families in Crisis

Grandparents who take permanent responsibility for their grandchildren typically do so due to some type of crisis within the family. Either the children’s parents have passed away or they are unable or unwilling to care for their children.

In any case, emotions are sure to run high for the grandparents as well as for their grandchildren. Being in the unique position of caring for your grandchildren due to the problems experienced by your grown children can make it difficult to keep perspective about each relationship.

Grandparents should do all that they can to look out for their own needs, rather than focusing solely on the needs of their children and grandchildren. By taking the time to care for themselves, grandparents will be better able to look after the children in their care.

2 thoughts on “Coping Financially When Raising Your Grandchild”

  1. Hello , our grandson aged 12 is going to be living with us and i was wondering if their is any financial help i can get as he will need clothes and things as he grows and this can be expensive as time goes on, i only work part time so could do with some sort of assistance if possible, his mum agrees and we want to do things properly

  2. Hi.My eldest daughter (17) is due her first baby in February 2018.She is still at college – not finishing her course until June. I am a single mum myself and still working.

    She is still at home, and baby will be here too, and therefore, I’m guessing, will be my dependant as well??

    Anyway, my question is – will I be able to claim child tax credits for the baby …. or will I fall into that “2 child only” category – as I my youngest is only 16.If this is the case, I’m assuming that once my eldest starts her university course in Sept/Oct ’18, she will no longer qualify as a “child” and her baby can then take that “2nd child” slot.

    However, should she claim for her child? Will she get financial assistance to attend university as a single mum (or indeed, as I am a single mum); her course will be part time requiring a minimum of 12 hours within a nursery setting – will it be better for her to volunteer or try to find a paid job (and how will this affect any child tax credit she (or I) get for the baby).

    No one seems to be able to give me an answer and I’m getting a bit worried the closer we get to baby’s birth day.

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