Should Seniors Help Their Grandkids Avoid Student Debt?Aug 15, 2018
Often, when there’s tough love from a parent, a grandparent is there to be the good cop. Even during back-to-school season, there’s temptation among seniors to help their grandparents any way they can. But how can you help a university-bound kid if you’re not in a position to financially?
In order to figure this out, seniors need to start by getting their own financial standing in order. You want to figure out where you’re at, then evaluate how you can help.
Figure out if you’re on track with your retirement plan
Whether you’ve already retired or are planning to in the near future, grandparents shouldn’t put aside their plan in order to help out their grandkids. A study from Equifax Canada found that seniors’ debt grew 5 per cent from 2016 to 2017, the fastest of any age group in Canada.
While delinquencies are comparatively low, you should still make sure your financial plan is sound before offering help. If you have debt, you can get help through credit counselling or a Licensed Insolvency Trustee (LIT). They can offer simple tips for better debt management or offer more formal solutions like a consumer proposal, to help you reduce your debt load.
Start your retirement check-in by using the Financial Consumer Agency of Canada (FCAC) Canadian Retirement Income Calculator.
From there, you can work on a plan that’ll help you with your debt, and put you in a place financially where you can help your grandkids without hurting yourself.
For more tips on helping kids and grandkids with their education during back to school season, listen to this BDO podcast. It includes advice from BDO LITs for both parents and grandparents, including considerations for those who may have difficulty helping financially.