Grandparents: How Do You Handle Gifts for the Grandkids?

gift bag with US money in it — (Image credit: Getty Images)

Right before Christmas, I came across a study by The Senior List reporting how much grandparents spend on their grandchildren nowadays. The final tally: nearly $4,000 annually, on average.

Yikes! The bulk of that went toward big-ticket expenses, such as school tuition or helping to buy a car. But the list also included gifts for special occasions ($400), clothing or shoes ($300), dining out ($300) and entertainment ($200).

Of course, every family’s circumstances and finances are different. But when I wrote the first edition of my book Raising Money Smart Kids in the 1990s, I offered advice to grandparents in general on how to satisfy their desire to be generous to their grandkids without spoiling them rotten. At the time, my own children were in elementary school. Now I’m a grandparent myself. Because the study arrived in the middle of the holiday shopping season, I decided to revisit the advice of my younger self to see whether I still agree with it — and whether I now practice what I preached.

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Whether for Christmas or any other occasion, I think the best piece of advice I gave then, and which I now follow religiously, is to consult with my adult children about what gifts their kids would like — and what they would like the kids to have. Then I can choose things that appeal to me and veto things that don’t. For example, I leave major purchases to Santa or Mom and Dad, unless I’m asked to chip in on a joint gift (such as the tent two of my grandchildren received a couple of Christmases ago).

A number of my grandparent friends use a version of this strategy. For instance, one grandmother felt it was up to her daughter to buy a gaming system for her grandson, but she was willing to buy games. Another grandmother prefers to come up with her own ideas, but if she’s in any doubt she runs them by her son to see if they pass muster.

In my book, I recommended having kids make a wish list of things they’d like but won’t necessarily get, and I still like the idea. Looking through catalogs together is a fun activity, and you can make it a teachable moment by setting price limits or showing the kids how to set priorities.

Digital gifts

One thing that I couldn’t have anticipated 30 years ago was the challenge of the digital age. I’m willing to buy things that require batteries or charging, but I leave the decision to buy tablets and other major electronic devices to parents. I learned that my friends and I all follow a strategy of “mixing it up,” as one woman put it — buying games, books and crafts to divert the kiddos from their devices. One family is planning an RV vacation next summer, so the kids’ grandmother purchased games and activities with a national parks theme to keep them entertained on the road.

Another thing my younger self couldn’t anticipate was how grandkids themselves can clue you in to their interests. My eight grandchildren range in age from 10 down to seven-month-old twins and, depending on their age, they are into trains, Hot Wheels cars, squishy character pillows, art supplies, Pokémon cards, baseball, and books in the Berenstain Bears and Wimpy Kid series. All of these offer opportunities for surprise gifts that aren’t particularly expensive. One of the most popular presents I ever purchased was a spiral notebook with pockets for papers.

Savings accounts

This being Kiplinger, I should also say that my husband and I contribute annually to 529 college-savings accounts for each of our grandchildren. Thanks to the so-called grandparent loophole, distributions from grandparent-owned 529 plans won’t affect a grandchild’s eligibility for federal financial aid.

Got grandkids? Let me know how you handle gift giving and I’ll be happy to share your ideas.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

Janet Bodnar is editor-at-large of Kiplinger's Personal Finance, a position she assumed after retiring as editor of the magazine after eight years at the helm. She is a nationally recognized expert on the subjects of women and money, children's and family finances, and financial literacy. She is the author of two books, Money Smart Women and Raising Money Smart Kids. As editor-at-large, she writes two popular columns for Kiplinger, "Money Smart Women" and "Living in Retirement." Bodnar is a graduate of St. Bonaventure University and is a member of its Board of Trustees. She received her master's degree from Columbia University, where she was also a Knight-Bagehot Fellow in Business and Economics Journalism.