What Money Message Are You Sending Your Grandchildren?

Grandparents have the power to help shape little ones' financial futures, and all it starts with some good old heart-to-heart talks.

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Fear, power, greed and self-esteem … These are words and thoughts we associate with money, and we’re passing them onto our children and grandchildren, whether we realize it or not. Kids pick up on how we think and feel about money, and that can have long-term ramifications for their financial futures.

Are you projecting money confidence, or money fear to your little loved ones? You can turn the money narrative around for your family if you weigh your words wisely and take the time to have some good chats when the opportunity presents itself. I’m living proof of that.

My grandfather used to save pennies and not tell my grandmother. He still bought stock (even though they lost everything during the Depression) with those pennies, and after he died, my grandmother was able to live to almost 100 years on the stock he had bought and never told her about. I learned from him, and from my grandmother, too. I remember watching her carefully count her change every time we were in a store. I asked her why. She told me about living through the Depression, when every penny really counted. She explained, “So many people went hungry, and for just 18 cents you could buy a dozen eggs. A whole quart of peanut butter only cost 23 cents. People were happy to work for $5 a day. It seems so strange today, but then, every penny counted.”

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We would play a game, and I had to guess what things cost long ago. This game stuck with me, and I play it with my grandchildren. I even titled one of my books A Penny Saved.

Rich or Poor, We All Worry About Money

Whether you have wealth or are living paycheck-to-paycheck, we all worry about money. For more than a decade, the American Psychological Association has conducted an annual study on the leading causes of stress, and money has consistently topped the list. (We should note that 2017’s leading cause of stress was the future of our nation, but money was still No. 2.) A November 2017 article in The New York Times illustrated how even a 72-year-old multimillionaire is nervous about whether or not he’ll have enough funds to sustain his life in retirement.

Having more money does not cause less anxiety. Don’t trust me, watch the Family Feud. They asked the question: “Poor People Worry About Money. What Do Rich People Worry About?” What was the top answer of 100 people surveyed? If you guessed “Money” you and 69 others agree. Well, that nails it for me.

But, seriously, how can those with wealth genuinely worry about losing it all?

Humpty Dumpty, You Could Have a Great Fall

Money and power: In a lot of cases, the words are synonymous. But do wealth and power breed arrogance? There have been plenty of incredibly wealthy and influential families that should have been better stewards of their wealth. In their cases, “All the king’s horses and all the king’s men couldn’t put Humpty together again.”

Huntington Hartford, the heir to the A&P grocery chain fortune, lost his millions and declared bankruptcy. The Stroh family controlled the third-largest brewing company in the 1980s, and today the company is gone. Other notables, who went from wealth to bankruptcy include Michael Jackson, Henry Heinz, Milton Hershey and Willie Nelson.

It is true that the wealthy don’t lie awake at night thinking about how they’ll pay the electric bill, but they do cringe at reports that could topple their wealth status. They could think about what Federal Reserve Chairman Jerome Powell is going to do about interest rates, pontificate about swings in the market, or if it is time to buy or sell real estate. Others with wealth see themselves as sitting on a ledge, where their money and power could be in constant jeopardy.

We are all too familiar with the self-esteem issues that are tied to money. Self-esteem is a belief, and beliefs are a story we tell ourselves. We made up the story that, perhaps we are not worthy because we don’t earn enough. We don’t have a big enough house, we can’t go on vacation, we may go into debt because someone wanted something we “had” to buy for them … You know the conversations and the fights. “Where did the money go? What do you mean you spent it without telling me? I’m not giving you any more money. You don’t deserve any money.” We are all too familiar with these phrases.

I have observed, after working with thousands of people and their kids over the years, that children seem to be born as either savers or spenders. Even when there two or more children in the family and they were raised the same way, one seems to spend away and one seems to be hoarding money. Is it in our DNA? Are we pre-programmed with a financial personality? Maybe. I tend to think so, but it’s impossible to say for sure.

Change the Money Story in Your Life

I do know that we can make things different for our next generation. As a Baby Boomer grandparent, I know the influence our generation has on our grandchildren. Change the money story in your life. Alter the DNA. By just sitting down and chatting, you have the power to create your own kind of “Compound Interest” with your grandchildren that will pay off in the future. Focus your money conversations on empowerment, not fear. I’m talking about building a connection: That is your “interest.” You will “compound” this as the discussions unfold. You will make the money connections for your grandkids: how you earned it, how you share it, how you spend it and how you save it.

The Bottom Line for Your Family

Have real conversations with your grandchildren. Money is a symbol. It is also a tool. Your hammer can’t drive the nail in by itself. Your money didn’t make its own decisions. Your tools can’t control you. You control your tools. Own your actions and teach your grandchildren to do the same. We made up the self-esteem story around money… now is your chance to rewrite the narrative.

With money comes responsibility: Responsibility for yourself and for the people around you whom you love. Have conversations with your grandchildren from the heart, not from your wallet. You want the memories they have of you to not only be about the fun and the laughs, but about the lessons you taught them.


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Neale Godfrey, Financial Literacy Expert
President & CEO, Children's Financial Network Inc.

Neale Godfrey is a New York Times #1 best-selling author of 27 books, which empower families (and their kids and grandkids) to take charge of their financial lives. Godfrey started her journey with The Chase Manhattan Bank, joining as one of the first female executives, and later became president of The First Women's Bank and founder of The First Children's Bank. Neale pioneered the topic of "kids and money," which took off after her 13 appearances on "The Oprah Winfrey Show." www.nealegodfrey.com