Financial Challenges of Raising Grandchildren
How to Financially Prepare as Your Grandchildren's Guardians

Submitted by ltownsend on June 10, 2021

For a variety of reasons, increasing numbers of grandparents are raising their grandchildren. According to the 2000 U.S. Census, 2.4 million grandparents were responsible for their grandchildren. For a variety of reasons, they are primary caregivers to their children's children. It may be temporary or permanent, but it is almost always financially challenging.  

Grandparents with grandchildren Even grandparents who consider themselves financially secure are likely to feel the pinch when the grocery bill goes up and they have to buy car seats and school clothes again. 

If you have taken on the responsibility for raising your grandchildren, or expect that you may need to step into that role soon, it’s important to get a firm grasp of your financial situation now and seek out any assistance that may be available to you and your family. This will help you make ends meet and avoid derailing your retirement plans.

1.    First, get control of your spending and avoid major purchases. 
For example, don’t go into debt on remodeling or moving at this time. Try to use existing space in your home to accommodate the grandkids, particularly if you're not sure how long they'll be living with you. 

2.    Know what is required with state involvement, if any.
If the state is not involved in your situation, you'll have more leeway to improvise in your living situation. If the state has become involved, then it may not be possible to move, especially out of the area. Also, government programs, such as foster care, might insist on separate bedrooms for boys and girls, specific furnishings, or other conditions. 

3.    Seek out available assistance
Legal Aid: If you’re fighting your children or the state for custody of your grandchildren, your situation is likely to generate legal fees. You can curb costs by using free or low-cost legal aid services. You may be able to get legal custody without a lawyer, or just hire one to review the forms you fill out. To find out if you qualify for free or low-cost legal help, contact the legal aid program in your area. Curbing legal fees is worth the effort since these costs alone can deplete your retirement savings.

Childcare: Childcare is another expense that can be overwhelming. Many grandparents quit working simply because they can’t afford daycare. When they quit their jobs and stop contributing to Social Security and a company retirement plan, it decreases the income they qualify for in retirement. If you need childcare but can't afford it, apply for free or subsidized services. Your local Child Care Resource and Referral service is a good place to start. 

Education: It may have been a while since you helped your own children with their homework. Today’s education involves technology and teaching a range of life skills. To help you out, look to resources available at the Kansas Parent Information Resource Center (KPIRC) website. Whether you send your grandkids to school or teach them at home, here you can find helpful articles and videos with topics such as leadership skills, communication and support for academic achievement.

Medical / Dental / Eye Care: It’s important to have the information and the authority to obtain healthcare for your grandchildren, such as social security numbers, immunization records and legal guardianship (which allows you to seek medical help in an emergency). If it is not possible to add your grandchildren to your medical insurance, consider community health clinics, state insurance programs for children (e.g., KanCare in Kansas) and the community’s charitable clinics, such as Guadalupe Health Clinic and GraceMed.

The bottom line for caregiver grandparents:

  • Review your financial situation and get your spending under control;
  • Avoid taking on large debts in your 50s or beyond;
  • Don't sacrifice your retirement savings plan; and
  • Seek out all the available assistance you qualify for and apply for it.


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