By: Paul Horn, CFP®, CPWA® Senior Financial Planner
Most of our clients as they get older want to begin to think of ways that they can take care of their grandchildren. Most commonly the discussion revolves around opening 529 plans and saving for college. Below are five alternatives that are worth considering if you are trying to take care of grandkids:
- Pay for their first car. Another large expense for kids is getting them their first car. The costs of gas and insurance alone are a burden for parents. This can be a great way to bond with grandkids and help them get their first taste of freedom.
- Pay for vacations with the grandkids. Raising kids is expensive and there may not be a lot of money left in the parent’s budget for nice vacations. Instead of material goods, create memories that will last their lifetime. Paying for vacations with the grandkids will help them have new experiences, learn new things, and create lasting memories. I will never forget the camping and fishing trips I had with my grandparents. I learned how to bait a hook, drive a boat, and appreciate the mountains because my grandparents did this for me.
- Buy them their first stock. You can transfer shares to your grandkids, and this can save you on taxes since you don’t have to sell the shares. Investing on behalf of your grandkids is an excellent way to help them start on the right foot financially. This also creates a great teaching opportunity to help your grandkids to develop the right financial habits. Here are the best accounts to open for your grandkid’s future.
- Help them with giving to charity. Most of our clients would prefer to pass on values than assets to their kids and grandkids. Something we do is work with grandparents and have them make charitable donations each year on behalf of their grandkids. You can have the grandkids choose the charity and even give a little pitch as to why the charity deserves the money. The kids tend to love this and expect some money to go to the local animal shelter!
- Spend time with them. If you live close to them, kidnap the grandkids for the day. Spoil them and get them hopped up on sugar and send them home! This can provide a needed break for the parents and helps create a strong bond and lasting memories for the grandkids. At the end of the day, kids want time more than anything else (even though they won’t say it).
There are many ways to help provide for and take care of grandchildren. Many of these ideas can be done without having to break the bank or spend too much money. If you have questions or would like to discuss these ideas, please contact us at financialplanning@bfsg.com.
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