Today's grandparents do not consider themselves financial supporters of their grandchildren, but nearly 94 percent of them provide some monetary help, according to a recent AARP survey.
Grandparents spend an average of $2,562 annually on their grandchildren, equaling about $179 billion dollars a year across the country, the report found. First time grandparents are in their “prime spending years” and on average will have four to five grandchildren. They are spending money on a variety of expenses such as gifts, vacations, daily necessities and education.
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Gifts are an integral way that grandparents provide for grandchildren. Some 86 percent say they buy gifts, spending an average of $805 annually.
Gregory Smith, 75, a grandfather of seven from Seattle, bought his granddaughter her first car, which she still uses today, some 100,000 miles later.
"I enjoy helping my grandchildren when I can,” he says. “I'm not sure how to describe what it means to me. It's just natural. I love my grandkids and I like giving them ‘stuff.’ To me, grandkids are the future and through them the future is bright.
Meanwhile, the survey found 1 in 7 grandparents extend their finances even further by providing for their grandchildren's necessities such as groceries and other day-to-day living expenses.
An even greater number of grandparents, 1 in 5, say they spend money on their grandchild's school or college tuition, an average of $4,075 a year.
Denise Duckworth, 75, of Vero Beach, Fla., a grandmother of three, helped her oldest grandchild pay off her student loans.