There are countless resources to help new parents get ready for the newest addition to their family. But what do you do if it is your child’s first child? Being a new grandparent can be a transition: here are some financial tips for new grandparents entering this exciting life stage.
Of course you want to spoil the newest generation in your family and offer all the financial support to your own child, but continue to practice smart money management. If you are planning to purchase something or give a gift, be sure it fits in your budget. It is easy to get carried away, but continue to prioritize your other financial obligations such as your mortgage, utilities, and living expenses.
One approach is to vary your monetary gifts rather than commit to a certain dollar amount for example, $5,000 per year. You could consider financial gifts for specific bills, such as braces or medical expenses not covered by insurance.
It’s also wise to talk about gift tax laws, limits, and benefits with a tax professional before contributing to college tuition, investments, or just sending a “happy birthday” card. This way you can help your grandkids financially while doing it wisely.
The Department of Education predicts that a public university’s tuition will be more than $44,000 a year in 2030. If you have the means, this may be something you want to begin investing in. The earlier you can begin a savings plan for college, the more you can help offset the cost. Financial institutions have savings programs, such as a 529 College savings plan, designed specifically for this purpose. Definitely consult someone from your bank or credit union for advice.