Raising your grandkids? How to keep your savings plan on track
Part of our tough money questions series
Whether it’s an unexpected situation or you saw it coming, taking on a “second parenthood” can be a big change, and requires some careful planning.
Of course, every situation is different, and that will drive what kind of financial impact it has on you. Is there a parent still involved in their lives? Are you already retired? Do you have support from other family members?
If the kids take piano lessons, or play club soccer or orthodontia is in their future, you’ll have family lifestyle decisions to make and expenses to plan for.
Managing the transition: 4 things to consider
As your household becomes larger, here are four things to consider so you can keep your own saving and investing plans on track.
First, try to avoid taking on new, or big debts if you’re in your 50s or beyond.
You’re going to have new expenses now, so it’s good to keep your eye on long-term goals. It’s even more crucial if you have a limited number of years to continue working. Because those are the years you’re trying to pay off debt and build up your savings.
Make sure you understand, and consider accepting, any federal or state financial assistance you may qualify for.
It could mean low-cost or help with expenses if you’re still working, for example. Depending on your circumstances, the kids may be eligible for benefits.
Don’t sacrifice your retirement savings unless it’s an absolute last resort.
When it’s time for college, the kids can typically get financial aid, student loans, scholarships, and work part-time. But you generally don’t have those options to fund your retirement.
Look for ways to make other adjustments in your spending or find new sources of income, but try to stick with your long-term savings plan. If you want to take a look at your current budget and see where you could free up some money, use our downloadable budgeting worksheet (PDF).
Assemble a team to help you navigate this change in your lives.
Your accountant can make sure you’re taking advantage of federal income tax credits and deductions available.
A family law attorney can talk you through the pros and cons of getting legal guardianship, custody and adoption…and help you decide whether to pursue child support from the parent, if that’s an option.
A financial advisor can help you make any adjustments to your financial plan and review your current life insurance policy.
Start planning sooner, rather than later, for your new role as parent and grandparent. Then, you can focus on caring for your grandkids who really need you right now.
- Download our budget worksheet (PDF) to see where you could free up some money each month.
- Read 7 rules: how to talk to family about money
- Learn more: Why you might need to reevaluate your beneficiaries
Insurance products issued by Principal National Life Insurance Co. (except in NY) and Principal Life Insurance Co. Securities and advisory products offered through Principal Securities, Inc., 800-247-1737, Member SIPC. Principal National, Principal Life and Principal Securities are members of the Principal Financial Group®, Des Moines, IA 50392.