Lending Money to Grandchildren: 3 Tips for Protecting Your Finances

While you do have responsibilities towards your grandchildren, you want to make it so that you’re not taking care of them at your own expense. Particularly, it’s easy for this to happen when it comes to money so here are 3 tips for lending money to grandchildren and still having some leftover for things like senior living and your health needs. 

Have a Plan

Having a financial plan is about peace of mind. It’s like having a GPS for your money journey. Without it, you might end up lost or in a tight spot. By having a solid plan, you’re taking control of your finances so that you can support your grandkids without sacrificing your own financial stability.

So, figure out what you’ve got coming in and going out each month, set aside what you can comfortably give to your grandkids without pinching your own wallet, and review your plan regularly to make sure it still fits your situation.

Say you’re retired and living off your pension. After crunching the numbers, you decide you can swing $200 a month for each grandkid without dipping into your savings too much. That’s your budget for spoiling them without stressing about your own finances.

Mind Those Tax Bits

Nobody likes surprises, especially when it comes to taxes. Understanding the tax implications of your generosity can save you headaches down the road. By knowing the rules and planning accordingly, you can give freely without worrying about getting hit with unexpected tax bills later on.

You want to check out the rules on gift taxes. Also, consider alternative ways to give, like contributing to college savings plans or trust funds, that might be easier on your taxes.

Say you want to help your grandkid save for college. Instead of just handing over cash, you put $15,000 a year into a college savings plan for them. It’s a win-win: you’re helping out and keeping the taxman at bay.


Money skills are life skills. By teaching your grandchildren about money, you’re giving them a gift that will last a lifetime. You’re setting them up for success and helping them avoid common financial pitfalls. Plus, it’s a great way to bond and pass on your wisdom to the next generation.

Talk to them about saving, budgeting, and making smart money choices. In fact, you want to lead by example and give them hands-on experience, whether it’s letting them help with grocery shopping or setting up a savings account. Also, share cool resources, like books or apps, that make learning about money fun.

Imagine you involve your teenage grandkids in planning the family budget. And maybe you give them a little project, like comparing prices at the store, to teach them about smart shopping. 

While you should absolutely help out grandchildren when you can, it’s important to be smart about it. Follow these tips. 

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