Ka-ching! Here's what it costs to be a grandparent

Raising a child from birth through adulthood will set you back $233,610, according to the latest figures from the Department of Agriculture, and helping raise a grandchild could be just as expensive.

Grandparents report that they spend an average $2,383 each year specifically to benefit their grandkids, according to new data from TD Ameritrade. That includes the more expected doting-grandparent gifts of toys and outings, as well as college savings, extra-curricular lessons, school supplies and even an allowance. (See chart below for some of the highlights.)

The survey, conducted in October, polled 1,004 millennial parents and 1,014 grandparents with millennial children. The margin of error is plus or minus 2.1 percentage points.

Money isn't grandparents' only investment.

More than half of millennial parents say their parents provide at least an hour of help each week on child care or running the household — with the average grandparent spending 48 hours per week on tasks including primary child care, babysitting, homework help and transportation to after-school activities. (See chart below.)

Parents estimate the value of grandparents' hours of support at an average $300 per week. Assuming that job doesn't come with a built-in vacation, that help could amount to as much as $15,600 per year.

Holiday Gifting To The Grandkids
Holiday Gifting To The Grandkids

This isn't a case of millennials being ill-equipped financially to have children, said David Lynch, managing director and head of branches at TD Ameritrade.

"Millennials are waiting until they are financially secure to have kids, far more than their parents did," he said.

But the costs to raise a child weigh heavily on a generation facing the challenges of mounting student loan debt and stagnant wages, said Lynch. A quarter of millennial parents receiving hourly support from their parents, and 18 percent of those receiving financial support, say they couldn't afford their current lifestyle without that help.

Grandparents are overwhelmingly happy to help. In the survey, 40 percent said their adult child didn't ask for support — they were the ones to offer it — and 43 percent said they help because "it makes me happy."

Grandparent prep

If you're hoping to assist your kids and grandkids, it's important to get your own financial plan in order first. Think about how that outlay of time or money will affect your ability to meet your own financial goals, whether that's exploring an encore career or traveling, said Douglas Boneparth, a certified financial planner and president of Bone Fide Wealth in New York City.

"It's your grandchild, but you can't escape the fact that [caregiving] is still work," he said.

Nearly half of grandparents in the TD Ameritrade survey said they have made at least one compromise to provide that time or money support for their grandkids. More than a quarter have dipped into their savings, while 15 percent "spend less time enjoying life" and 8 percent have postponed retirement.

Even if you're willing to make such compromises, make sure the help you provide won't put you at risk of needing financial support yourself down the line.

"Do you want to spoil your grandchild rotten at the expense of running out of money at 80?" Boneparth said.

Think about the best tools to help, based on your ultimate aim, said Andrea Blackwelder, a certified financial planner and a co-founder of Wisdom Wealth Strategies in Denver. That may not be handing your adult child cash.

Contributions to a 529 plan could help you snag a tax break, for example, while direct payments to a medical provider to cover health expenses are exempt from gift taxes.

Create an open dialogue with your children, Lynch said. That can help ensure the whole family benefits from your help.

"That way there's clarity on what the expectations are," said Lynch. "You hate to see money tear a family apart."