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Grandparents scrimp, but splurge on grandkids

Leslie Davis helps granddaughter Hunter Hill, 15, bake holiday cookies at Davis' home in Mesa, Ariz.
Samantha Sais | NBC
Leslie Davis helps granddaughter Hunter Hill, 15, bake holiday cookies at Davis' home in Mesa, Ariz.

Grandparents may cut back on their holiday party treats, throw a little less tinsel on the tree and recycle last year's holiday outfit, but they don't want to stop indulging their grandchildren.

"People will do a lot of things for their children. They will do anything for their grandchildren," said Peter Francese, a demographic expert who has studied grandparents' spending habits extensively.

That's especially true during the holidays, when it should come as no surprise that grandparents often want just one thing: to see their grandchildren's joyful faces on Christmas morning. It's more than just about fleeting joy, experts say. In the weak economy, many grandparents have prided themselves on being the economic pillars of their families.

"Giving gifts is a wonderful thing and it makes you feel good," said Amy Goyer, an expert on family issues with AARP. "It's seeing those little faces light up. You just live for that sometimes, and the holidays are a time when you don't really want to change that."

Donna Jackson and her husband have 17 grandchildren between them. Although they have had to cut back significantly on their holiday budget in recent years, they still plan to spend $50 to $75 on each child—even though it means relying on credit cards.

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"By the time I get (them) paid off it'll be Christmas again. It's a tough situation but I just—Christmas is my favorite time of year, and I just cannot not buy them something for the holidays," she said.

Jackson, 64, retired from her job as a receptionist two years ago in part so she could take care of one of her grandchildren. Her 83-year-old husband retired from his career as a graphic designer but still works part-time delivering office supplies. They also have retirement savings, but health care costs and other setbacks have made it harder for them to get by.

The couple, who live in Green Lane, Pa., have stopped buying birthday and anniversary gifts for their kids, and cut back significantly on what the kids will get for the holidays. For the first time, Jackson also asked her son to host an annual Christmas party for about 24 family members that she traditionally gives.

Still, Jackson said she drew the line at not giving the grandchildren presents.

"I just could not bear to not give them something," she said.

Goyer said her research has shown that some grandparents did cut back on spending for their grandchildren as a result of the weak economy. That may mean that some are buying fewer or more practical gifts for their grandchildren, she said.

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But Goyer said her research also has shown that grandparents continue to find it extremely important to be able to provide practical support for their grandchildren, such as a new coat or money for karate lessons.

"Even when grandparents felt like it was causing a little bit of hardship for them, this is not an area they want to cut back on," Goyer said.

Grandparent Leslie Davis helps her grandchildren bake holiday cookies at her home in Mesa, Ariz.
Samantha Sais | NBC
Grandparent Leslie Davis helps her grandchildren bake holiday cookies at her home in Mesa, Ariz.

Leslie Davis said when she and her husband were in a better financial situation, she reveled in splurging on her four grandchildren, ages 5 to 15.

"I loved to get them a lot of things to put under the tree at Christmas, because it was just so much darn fun to watch them when they were little, opening the gifts and enjoying them," said Davis, who lives in Mesa, Ariz.

Davis, 62, said her philosophy of delighting her grandchildren hasn't changed as the grandchildren have gotten older and her salary has fallen because of job changes. But Davis, who is a technical writer, said she can't afford to go all out like she used to, especially now that the three older ones are 11, 13 and 15.

"As they get older they're a little bit harder to buy for, and sometimes you just can't always get them what they want," she said. "I'm not in a position to go out and buy iPads for them all, or anything like that."

This year, she's trying to stick to a much stricter budget and focus on one meaningful gift instead of tons of presents under the tree. She's also focusing on other family traditions they have around the holidays, such as baking cookies with her grandkids and her annual Christmas party.

In the past, Davis said she's enjoyed being able to help out with necessities or things like school supplies when her children or grandchildren needed it. What she definitely doesn't want is for the younger generations to end up having to help support her.

"I don't expect my kids to have to take care of me and my husband," she said.

Goyer said grandparents' devotion to helping out with expenses for the grandkids partly reflects a change in the way older Americans think about their legacy.

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Instead of placing a lot of importance on leaving a big inheritance for future generations, she said many grandparents want to be the person in the family that people can turn to now—whether it's to help out with college tuition or get that must-have holiday gift.

"They are that safety net. They value that role," she said, even when it requires financial sacrifices.

Francese, the demographer, said that's been especially true in recent years, as many older Americans have watched their children suffer through job losses and other setbacks because of the weak economy. He said he's heard more than one story of grandparents continuing to work full time when they might have retired so they can help out with basic expenses like strollers, cribs and child care.

"You can't meet a grandparent who will not make huge sacrifices for their grandchild," he said.

—By CNBC's Allison Linn. Follow her on Twitter @allisondlinn and Google or send her an email.

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