The Bank of Mom and Dad is expanding operations: It's now also the Bank of Gram and Gramps — and it's costing baby boomers dearly. In some cases, it might be eating away at their nest eggs.

Faced with the rising cost of everything from groceries to childcare to college savings, parents with children under 18 are at a breaking point — and 76% believe they'll need financial support from extended family to make ends meet, according to the latest BMO Real Financial Progress Index.

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In the coming year, nearly two in five (37%) parents with young children expect to receive financial support — or plan to ask for it — from their parents or grandparents.

This goes beyond asking grandparents to babysit or chip in for a college education. Nearly half (47%) of parents with young children say they'll receive cash for day-to-day expenses as inflation stretches budgets thin.

That shouldn't come as a surprise, considering the cost of raising a child these days: a LendingTree analysis found that it costs $303,418 to raise a child over the course of 18 years. That works out to $16,857 every year.

And that doesn't include costs after the age of 18, namely the cost of a college education. But with more adult children asking for financial support, baby boomers may find themselves blasting through their savings — and putting their golden years at risk.

Here are three things to do before handing over a cent.

If the cabin air pressure drops in an airplane, you put on your own oxygen mask first before helping others — including small children — because you can't be helpful if you're incapacitated.

The same goes for financially supporting adult children and grandchildren.

The vast majority (92%) of American grandparents are providing financial help to their grandchildren, according to research by SeniorList.com, with 16% supporting both their own elderly parents and their grandchildren.

The research reveals "a concerning pattern of financial self-sacrifice" from grandparents, with nearly one in five feeling "pressured to give even when it creates financial strain."

More than one in 10 had already dipped into their savings or retirement accounts to help their grandchildren, while 51% would consider doing so. Many would also consider taking on debt (28%), retiring later (42%), refinancing their home (20%) or even coming out of retirement (37%) to help their grandchildren.

But, oftentimes, that leads to more problems down the road.

"This is especially true if you're sacrificing your retirement savings, as you may find yourself in a situation where you can't retire and you can't depend on your children for support, as they never established financial independence," says Nancy Thomsen, a partner and wealth manager for Creative Planning in Overland Park, Kansas, in a blog.

Before you step in, Thomsen says to make sure you're prioritizing your own financial health first. That means maximizing your retirement savings, maintaining an emergency fund and avoiding debt.

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While giving or lending money is often driven by a desire to help those we love — or, in some cases, feeling obligated to do so — it's important to set ground rules and boundaries.

If you're regularly giving them money for essential living expenses — such as rent or groceries — this can develop into a dependency loop over time, Thomsen says.

This dependency loop "can be particularly challenging for older adults who are trying to balance support for their grown children with their own retirement savings needs."

If you're in this situation, only lend what you can afford. If you're not sure how much you can realistically afford to give, talk to your financial advisor — ideally before you start taking withdrawals from your retirement accounts.

"Boundaries often get a bad reputation, but in reality, they create clarity and safety for everyone involved," says Bryan Trugman, CFP and managing partner at Attitude Financial Advisors in Plainview, New York, in a blog post.

He recommends defining time frames or conditions around financial assistance. "It gives adult children a clear understanding of what support looks like and encourages forward momentum."

For example, if an adult child wants to move back in with you, agree in advance for how long. If they need help with day-to-day expenses, such as groceries, childcare or summer camp, be clear about what you can afford and how much you're willing to spend each month — then let them figure out where that cash should go. Also be clear how long that support will last.

Ideally, financial support should be short-term and help them progress toward a goal, such as covering a grandchild's rent while they go to college.

"You have to look at what is the goal of the support going forward," Mark Hasenauer, head of financial planning and retirement at TD Wealth, told U.S. News. "If you're not helping them build toward something, you're hurting them."

For example, you could lend your adult child a certain amount — an amount that fits into your budget — at 0% interest. Make the loan repayable over a set period of time, such as a monthly payment over 12 months.

Then, make it formal by having them sign a contract (you can find templates online). You should also set terms for late payments or defaults, to keep your child or grandchild accountable.

Another option is to match their savings for a major expense, up to an amount that you can afford each month.

So, for example, if they're putting aside $200 a month for a car down payment, you could match their $200. That not only reinforces good money habits, but it keeps your own budget under control.

If you want to be able to help out your adult children or grandchildren with unexpected expenses, consider opening a high-yield savings account, which you can build up over time. That way, you won't have to drain your retirement account if an emergency arises.

After all, you don't want to push the Bank of Gram and Gramps into a crash.

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This article originally appeared on Moneywise.com under the title: 92% of grandparents give financial help to grandkids — and it's draining their retirement savings

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