Can I afford to help with my grandkids?
Hi, I’m Margaret Taylor, a 70-year-old grandmother living in Raleigh, North Carolina. I’ve spent most of my life working as a teacher, and now that I’m retired, I want to focus on two things: taking care of myself and helping my grandkids. I’ve lived a modest life, and while I’m on a single income now (from Social Security and my pension), I’m still trying to figure out if I can financially contribute to my grandkids' futures without jeopardizing my own goals.
I have two grandchildren: Ava and Noah. My hope is to set aside something for each of them, whether it’s contributing to their education or helping them get a little boost as they move into adulthood. My other goals are more personal. I’d like to stay active by traveling once a year (on a budget) to visit places I’ve always dreamed of, like the Grand Canyon or Niagara Falls. I also want to keep up my hobbies, like gardening and knitting, and make sure I’m financially stable enough to never become a burden to my children.
Building My Personal Financial Scenario
I turned to StartingOutPlan’s financial literacy software to help me create a personal financial scenario. The first step was entering my current financial details: my annual income is $42,000 from Social Security and my pension. My monthly expenses come to about $3,200, which includes my rent, groceries, and healthcare costs. I also have $120,000 in savings and investments that I’ve carefully built over the years.
Right now, I have no debt, and my living situation is stable, but I’m trying to balance my personal goals with the desire to help my grandkids. I’ve decided to start by modeling what it would look like to give each grandchild $5,000 over the next five years. That’s $10,000 total, spread out, which seems manageable, but I need to be sure it won’t negatively impact my ability to travel and stay secure financially.
Let's see how that looks in my baseline financial plan on StartingOutPlan.
First Screenshot Here – Showing Baseline Plan with Current Income and Expenses
What I Saw
In the baseline scenario, I’m in a decent position financially. I’m on track to meet my personal goals: I can travel once a year, continue enjoying my hobbies, and keep enough of a cushion for emergencies. However, once I factor in my desire to help my grandkids, I need to see how that impacts my long-term security.
Adding Goals for the Grandkids
Now, I’ve added the $15,000 for my grandkids into the plan, spread over five years. I also want to model another small goal – a once-in-a-lifetime trip to Europe that I’ve always dreamed of. I set that goal for my 75th birthday, budgeting $8,000 for the trip. It’s a splurge, but I think I’ve earned it!
Let’s take a look at the updated plan with these goals added.
Second Screenshot Here – Showing Plan with Goals for Grandkids and Travel
What I Saw
Adding these goals made things tighter, but not impossible. The software shows that by pulling a little more from my savings and slightly reducing my annual travel budget in the years leading up to the Europe trip, I can make everything work. I also noticed that if I’m careful with how I allocate my gift to the grandkids, I can still afford to help them while maintaining my emergency fund.
However, there is a caveat: if anything unexpected happens, like healthcare costs rising or needing more long-term care, I might have to make adjustments to my plan.
Making the Decision
At this point, I’m leaning towards following the adjusted plan. I’m comfortable with pulling a little more from savings for the grandkids while also reducing some of my personal spending in other areas, like limiting smaller trips in the next few years. However, I’ll need to revisit this plan periodically, especially as my health and expenses change over time.
For now, I feel confident that I can strike a balance between helping my grandkids and enjoying my own retirement. I’ll be meeting with my financial advisor soon to get their perspective, just to make sure there aren’t any blind spots I’ve overlooked.
Third Screenshot Here – Final Plan with Adjustments
The Importance of Comprehensive Planning
This case study presents a simplified financial scenario. In a more accurate personal financial scenario, we would incorporate specific expenses, financial goals, and the details of all debts and assets. This comprehensive approach ensures a more precise and tailored personal financial scenario.
The Role of Professional Advice
While I feel good about the numbers, I recognize the importance of consulting a financial advisor. StartingOutPlan has given me a solid understanding of my financial situation, but having a professional validate the plan will provide peace of mind and ensure I’m on the right track.
Welcome to FinLitYou Stories!
Our mission is to educate you on how self-guided financial literacy can be effectively utilized to maximize your resources and opportunities.
While the cases we present are inspired by real-life scenarios, some details have been altered to respect privacy.
These stories and scenarios are provided for educational purposes only and should not be construed as financial advice.
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