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.
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.