Teach Your Grandchildren Important Lessons about Money
You have dealt with money for more than half a century. You understand hard work, following a budget, saving money, and spending wisely. You possess a wealth of financial wisdom—at least in comparison to your grandchildren.
As a grandparent, you can provide your grandchildren with sound, sage advice. Will they accept and heed it? Researchers say yes! In fact, a survey of more than 1,000 young adults found that most (85%) were receptive to financial discussions with their grandparents. However, just 8% of grandparents said they actually talk with their grandchildren about finances.
Nearly a third of grandparents said they thought they could influence their grandchildren’s financial decisions. The study also indicated grandparents are able to shape grandchildren’s decisions more than grandparents realize. Nearly three-quarters of grandchildren said their grandparents’ financial advice would influence how they save and spend money.
How do you talk to your grandchildren about money? Here are several ways to engage in fruitful discussions:
Just say no to gifts (sometimes).Giving gifts or investing in college funds is nice and may provide the catalyst for a bright future. But when money is tight, often the best approach is talking about the value of money. Discussions help develop the sense of money’s value and a good work ethic in your grandchildren. Moreover, you may “hire” your grandchildren to do chores or household projects; you can then pay them an hourly wage for the work, like they do it in the real world.
Story time: “In my day…”
You first must determine whether you have a captive audience. If your grandchildren are interested, tell them stories about how you earned money as a teenager, how you paid for your school, and how you saved money. If your audience’s attention doesn’t waver or wane, you can segue into goal setting and saving money for college. You may also delve into the difference between needs and wants.
Bring them to the store.
This would be a good time to discuss history and inflation. You can explain how prices have gone up on products and how selections have changed. A loaf of bread, for example, cost 25 cents in 1970. A pound of hamburger meat cost 45 cents in 1960. Those types of discussions give children a wider perspective on the role and the time value of money.
Stay in touch.
Grandparents who live far away from their grandchildren can use video chatting or other methods to keep in touch. This will enable you to keep the conversation alive and to continue conveying your wisdom.
Serve as an example.
Sometimes having a conversation isn’t the best approach or it’s not the right time. However, grandparents’ life stories can provide compelling lessons on the value of money and responsible financial management. Your story in a family novel, at family gatherings, or through other formats may serve as powerful lessons later in your grandchildren’s lives. Parts of your story may include getting your first job, your first car, or even your house. After all, the most important legacy you can leave to your grandchildren resides in your heart, not your bank account.
If you have any questions about money management or would like help reviewing your financial strategy, give us a call. We’re happy to talk.