Grandmothers’ Financial Contributions and the Impact on Grandmothers
Deanne and her husband had nearly paid off their own home in preparation for their retirement. But when their daughter divorced and nearly lost her house, Deanne and her husband bought it. Though she is working, Deanne’s daughter is unable to make the monthly payments because she is trying to complete her college degree and raise three sons on her own. Deanne’s husband is self-employed and disabled. The economy has been bad for construction workers lately, so he is rarely working and earns very little income. Additionally, Deanne and her husband took a second mortgage on their own home to further assist their daughter during the divorce. At age 57, Deanne is now paying three mortgages: the first and second mortgage on her own home, as well as her daughter’s mortgage. Because so much of Deanne’s paycheck goes toward mortgages, she is not saving for her own retirement. At a time when she is supposed to be accumulating a nest egg, Deanne is diverting funds to the younger generations and accumulating debt. Deanne is not alone. Studies show that in the United States, the flow of cash from parents to adult children and grandchildren can be enormous and may become even more so during hard economic downturns (Ashton, 1996; Folbre, 2012; Gladstone, Brown, and Fitzgerald, 2009; Glenn, 2012; Harrington Meyer, 2014; Waldrop and Weber, 2005; Wilson, 1987). This chapter uses qualitative data from the Grandmothers at Work Survey, 2008-2012, to highlight financial contributions made by working grandmothers during hard times and the financial implications of those contributions for their own old-age financial security. The interviews overlapped with the Great Recession of 2007-2009 and the subsequent lackluster recovery. When I interviewed 48 grandmothers in the United States
about a wide variety of topics, nearly all noted the amount of financial assistance they were providing but only a few linked that assistance to the recession. Nearly all of the grandmothers said that their own parents provided little financial assistance when they were young parents. A few of the grandmothers were keeping with that tradition and told me they expected their children to raise their grandchildren independently. In these families, grandmas buy gifts, but little else. But the majority of the working grandmothers I interviewed were breaking with tradition. Some help with one-time expenses like college, a first car, or a first home. Others help with daily and monthly expenses such as rent, electricity, food, clothes, formula, and diapers. Others buy homes or businesses, pay for summer camps or private tuitions, and cover housekeeping or daycare expenses. Particularly if their adult children face employment challenges such as layoffs, unemployment, or new jobs, or if their adult children are single parents, ill or disabled, or completing degrees, grandmothers tend to provide a great deal of financial help. But in several cases, the financial assistance did not appear to be needed at all, yet the grandmothers kept giving. These latter cases were particularly troubling when the grandmother’s giving was undermining her own financial security. Thus, the types of, and the impetus for, financial assistance working grandmothers provide to the younger generations are diverse. The impacts of such financial contributions are equally diverse. Providing financial assistance to adult children and grandchildren often brings joy and eases worries. But for many it also adversely affects nest eggs. Some working grandmothers can readily afford even substantial financial contributions. But others, even some of the wealthiest grandmothers I interviewed, are working more hours, delaying retirement, foregoing travel plans, diverting funds away from their own retirement accounts, and accumulating new debt, all in an effort to provide financial assistance to the younger generations.