If you are like many grandparents, you like your kids, sometimes, but you LOVE your grandkids. Being a grandparent is a special honor. You have a unique ability to shape your grandkids well beyond just spoiling them with sweets and sending them home.
Given how important financial skills are to succeeding at life, it’s surprising schools don’t teach our children more about money. As a grandparent, however, you can teach your grandkids important financial lessons — and you should! These lessons can leave a positive mark on your grandkids for decades to come.
Lesson 1 (ages 3-8): Delay gratification.
You may have to wait to buy something. This is a hard lesson for people of any age to learn, but building the foundation early is a key to financial success. It’s easy for adults simply to buy things for grandchildren who are looking up at them with pleading eyes. Instead, help them save money and set a goal to buy the item of their dreams. Create a “savings jar” that is clear, so they can see the progress, and help them count the money as they add to it.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Lesson 2 (ages 8-14): Hard work never hurt anyone.
There is a sense of satisfaction in us all when we work hard for something and achieve it. While we’re certainly happy to live in a country and time where 8-year-olds are not working in factories, completing some kid-friendly chores around your home — like raking leaves, dusting or cleaning up the garage — could help teach a valuable lesson about work and reward. As your grandkids get older, encourage them to become entrepreneurs by starting their own business babysitting, pet sitting or mowing grass. It’s a lesson that will serve them well throughout life.
Lesson 3 (ages 10+): Invest in the stock market.
You don’t have to be Warren Buffett to teach your grandkids about the stock market. Consider gifting your grandchildren shares of stock instead of the newest toys. Open an investment account and have them help choose a company in which to invest. Then review the stock quarterly and talk about the company, as well as any gains or losses. Your financial adviser can help you with the basics. Getting kids interested early about investing can have a profound impact on their wealth later in life.
Lesson 4 (ages 14+): Stay away from credit cards.
Credit card companies don’t make billions of dollars a year because they are a good deal for consumers. Talk to your grandkids about the mistakes you’ve made with credit cards and how you’ve fixed those mistakes. Avoiding high-interest consumer debt is a key factor in someone’s future financial success.
Lesson 5 (ages 17+): Pay yourself first.
“If I had only started saving earlier.” How many times have you said this to yourself? As your grandkids embark on their careers and first jobs, encourage them to save a portion of every check. A good savings target is 10% to 15%. If their company offers a 401(k), that’s a great place to start, especially if the company offers a match. If not, there are a variety of other savings vehicles. The earlier they start, the quicker the power of compounding takes effect.
These financial lessons are important for kids of any age. Don’t be scared to have these conversations with your grandkids — it’s a sure way to build a legacy and a foundation they’ll always be thankful for and remember.
-
What About Those ‘Guaranteed’ Life Insurance Ads?Guaranteed life insurance policies can sound tempting if you've been declined for insurance elsewhere. Here are four downsides and one alternative.
-
13 Answers to Pressing Social Security QuestionsFrom smart claiming strategies for couples to tips on maximizing your monthly check, we have advice that can help you.
-
Eight Tips From a Financial Caddie: How to Keep Your Retirement on the FairwayThink of your financial adviser as a golf caddie — giving you the advice you need to nail the retirement course, avoiding financial bunkers and bogeys.
-
Just Sold Your Business? Avoid These Five Hasty MovesIf you've exited your business, financial advice is likely to be flooding in from all quarters. But wait until the dust settles before making any big moves.
-
You Were Planning to Retire This Year: Should You Go Ahead?If the economic climate is making you doubt whether you should retire this year, these three questions will help you make up your mind.
-
Are You Owed Money Thanks to the SSFA? You Might Need to Do Something to Get ItThe Social Security Fairness Act removed restrictions on benefits for people with government pensions. If you're one of them, don't leave money on the table. Here's how you can be proactive in claiming what you're due.
-
From Wills to Wishes: An Expert Guide to Your Estate Planning PlaybookConsider supplementing your traditional legal documents with this essential road map to guide your loved ones through the emotional and logistical details that will follow your loss.
-
Your Home + Your IRA = Your Long-Term Care SolutionIf you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
-
I'm a Financial Planner: Retirees Should Never Do These Four Things in a RecessionRecessions are scary business, especially for retirees. They can scare even the most prepared folks into making bad moves — like these.
-
A Retirement Planner's Advice for Taking the Guesswork Out of Income PlanningOnce you've saved for retirement, you'll need your nest egg to support you for as many as 30 years. For that, you need a clear income strategy, not guesswork.
