Can You Afford to Provide Child Care for Grandchildren?

Financial Issues for Families to Consider

Grandparents considering taking on child care should know whether they will have to provide basic needs such as diapers. Photo © Andersen Ross | Photodisc | Getty Images

To ease the financial burden of child care, many working parents turn to grandparents. Using grandparents as child care providers can be a win-win arrangement. Parents know that their children are in loving hands, and grandparents reap additional closeness with their grandchildren. Still, grandparents should consider the financial factors as well as other factors before agreeing to a regular child care arrangement. Providing regular child care is quite different from occasionally babysitting the grandchildren.

Quitting Current Employment

The decision is easier for grandparents who are retired or currently not working, but some grandparents quit their current employment in order to take up child care duties. Such a step requires consideration of a number of vital questions.

Can you afford to give up the income from your job?
Perhaps you are going to accept payment for your services — more about this later — but if your income is going to drop, you need to examine your budget and financial plans closely.

What impact will quitting your job have on your benefits?
You'll need to consider retirement, income tax status, health insurance and other benefits associated with your employment. You may want to consult a financial adviser about these issues. Unless you are on Medicare or covered under a spouse’s medical plan, health insurance alone can be an enormous expense.

Will you miss your job?
It's easy to overlook the challenges and social opportunities provided by your job. Like most workers, you probably occasionally get frustrated with your job and feel the urge to quit. Don’t make this decision during one of those times. Since most of you will be leaving workplaces that provide socialization with adults, consider whether you will be happy giving up that interaction for the constant company of children, no matter how much you love them.

Can you go back to work if you change your mind?
Many times older workers who quit their jobs have a difficult time reentering the work force. In some fields, however, knowledgeable workers are always in demand. Assess your own particular situation. Talk to your employer about whether you could return if you so desire, but don’t take any reassurance that you receive as a guarantee. Be certain that you are willing to walk away from your job without looking back.

Accepting Payment

Even if grandparents don't have to quit a job, taking on regular child care responsibilities will require major changes in their lives. For that reason, some grandparents are willing to accept payment for child care. Usually, they charge their children less than other providers would charge. Some grandparents refuse any pay. It is vital to reach an agreement that is acceptable to all parties before accepting child care responsibilities. If you decide to accept payment, you need to consider your children’s financial habits. Do they pay their bills regularly and on time? Will they consider your bill for child care something they can skip if their budget becomes strained? A very important question is will you feel guilty taking payment from your children?

Some children who do not pay their parents for child care instead buy extra gifts for the grandparents or pay for occasional restaurant meals or even vacations for the whole family. Some grandparents who do accept payment put a portion of their earnings back for similar treats. In both of these cases, any extra treats or gifts must be considered as just that, gifts. Neither side is entitled to feel slighted if the gifts aren’t lavish enough or the outings don’t occur frequently enough. They should not enter into any type of financial accounting that takes place.

Covering Extra Expenses

Another arrangement that needs to be spelled out clearly is how other expenses will be handled. If grandparents are being paid for child care, they should consider food costs when deciding what to charge. If they are not being paid, the parents should certainly either provide the food or reimburse the grandparents for food expenses. Sometimes it is easier for the parents to bring food, especially if the grandchildren are picky eaters. On the other hand, constantly lugging food to the grandparents’ home can be a chore. Reimbursing the grandparents for what they spend on food may be easier. Of course, few grandparents want to keep a tally of each slice of bread or spoonful of peanut butter that their grandchildren consume, but it is reasonable to bill your children for foods bought for grandchildren that one would not be buying otherwise.

The parents should definitely be providing essential items such as diapers and wipes for infants and toddlers. If your children have a history of showing up to visit without enough supplies, be forewarned that this behavior will probably carry over into the child care arrangement, and decide how you will handle this if it occurs.

Working Overtime

Most child care facilities have definite hours and penalties for parents who don’t pick up children promptly. These should be spelled out between parents and grandparents as well. Although most grandparents won’t mind an occasional half hour of overtime, parents who constantly run late are abusing the grandparents’ good will. Also problematical is the parent who comes to pick up the kids, starts “visiting” and ends up staying for dinner. Some grandparents will welcome this extended day, and others will be fuming, inwardly at least.

Considering a Contract

If you agree to provide child care for grandchildren, many authorities advise a written agreement. That may not be necessary, depending upon the nature of the parties involved.

Some grandparents are laid back and don’t keep score. Others, perhaps unconsciously, will keep count of each extra minute and additional jug of milk.

Some parents will bend over backward to keep from taking advantage of the grandparents. Others will figure that grandparents’ patience and benevolence should have no limits.

Before agreeing upon a child care arrangement, it is important to know oneself and one’s children. Perhaps you are endlessly generous, and your children are meticulously responsible. In that case a contract may be unnecessary. For the rest of us — it makes sense to put it in writing.