Just before Christmas, I stumbled upon a report from The Senior List detailing the amount grandparents are willing to invest in their grandchildren today. The outcome: an average of nearly $4,000 per year.
Wow! A significant portion of that is directed toward major expenses like school tuition or assisting with a car purchase. However, the breakdown also included gifts for special occasions ($400), clothing or shoes ($300), eating out ($300), and entertainment ($200).
Of course, each family’s financial situation is unique. When I published the first edition of my book Raising Money Smart Kids in the 1990s, I shared insights for grandparents on how to express their generosity toward their grandchildren without overindulging them. At that time, my children were still in elementary school. Now, as a grandparent myself, I found it fitting to revisit my earlier recommendations in light of this recent study that emerged during the bustling holiday shopping season — to see if my views have changed and whether I’ve adhered to my own advice.
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Whether it’s for Christmas or any other celebration, the most valuable piece of advice I shared back then, which I still diligently follow today, is to consult with my adult children about what gifts their kids would appreciate — and what they believe the kids should have. This way, I can select gifts that I like and eliminate those that do not resonate with me. For instance, I let Santa or Mom and Dad handle significant purchases unless I’m invited to contribute to a shared gift (like the tent two of my grandchildren received a few Christmases ago).
Several of my grandparent friends employ a similar approach. One grandmother felt it was her daughter’s responsibility to purchase a gaming console for her grandson, but she was happy to buy games. Another grandmother prefers to come up with ideas herself, but checks with her son to ensure they align with expectations.
In my book, I suggested having kids create a wish list of items they desire but might not receive, and I still support that idea. Going through catalogs together can be an enjoyable activity, allowing parents to turn it into a teachable moment by establishing budget limits or guiding kids in prioritizing their wishes.
Digital gifts
One aspect I couldn’t have foreseen three decades ago was the impact of the digital age. I’m open to purchasing things that require batteries or charging but defer decisions on tablets and other significant electronics to parents. Among my friends, we all agree on a strategy of “mixing it up,” as one grandmother phrased it — opting for games, books, and crafts to encourage children to engage in activities beyond screens. For instance, one family is planning an RV trip next summer, so the kids’ grandmother bought games and activities based around national parks to keep them entertained during the journey.
Another surprise for my younger self was how grandkids could indicate their interests directly. My eight grandchildren, ranging from 10 years to seven-month-old twins, have various passions, including trains, Hot Wheels, squishy character pillows, art supplies, Pokémon cards, baseball, and popular book series like Berenstain Bears and Wimpy Kid. Each of these presents opportunities for delightful surprise gifts that are also budget-friendly. One of the hit gifts I ever gave was a spiral notebook with compartments for papers.
Savings accounts
Since this is Kiplinger, I should also mention that my husband and I make annual contributions to 529 college-savings accounts for each of our grandchildren. Thanks to what’s known as the grandparent loophole, withdrawals from grandparent-owned 529 plans won’t impact a grandchild’s eligibility for federal financial aid.
Do you have grandchildren? I’d love to hear how you approach gift-giving, and I’m more than happy to share your ideas.
Note: This article was first published in Kiplinger Personal Finance Magazine, a reliable monthly source of advice and guidance. Subscribe to help you earn more and keep more of what you earn here.
