It’s no secret that grandparents love to spoil their grandchildren. You want them to have the whole entire world at their disposal, so you do what you can to give what you’re able. While toys and sweets are fun in the moment, the best gifts that you can give to them are the wisdoms you’ve collected throughout your life and your vast pool of knowledge.
One of the best things you can proffer advice to your grandchildren about is money, specifically how to manage their finances. In order to build a strong foundation of skills and strategies for managing your money when you become an adult, you must first learn the basics and then build upon that knowledge. That’s why it’s important to start talking to children about finances while they’re still young, so they can grow up with a solid knowledge of how to save and spend. Here are a few tips on how to start talking to your grandchildren about finances.
Practice what you preach.
- Children are sponges, absorbing all of the information being presented to them. If you’re offering them financial advice on living moderately and saving your money while racking up massive amounts of credit card debt buying extravagant luxuries, they’re likely going to see this as a rule that, since you didn’t follow it, they don’t have to follow. Make sure you’re teaching them good life lessons, and maybe considering adopting some of them yourself in the process.
Take them to a grocery store.
- From the time that you were growing up until now, things have changed a lot in the world. However, for a young mind that fact can be difficult to actualize and comprehend. Take your grandchildren to a grocery store and talk to them about cost and the way that money has changed over time. For example, in the 1950s a dozen eggs cost $0.79, in 2015 it cost $2.94, and in 2017 it costs just about $1.97. Showing them how much prices can change even over a short period of time can help them grasp that money changes value over time.
Bonus: If you really want to teach your grandchild about finances while also spoiling them, invest money for their future. If you want to take it a step further, invest in a 529 college savings fund. If you saved money for your grandchild in a traditional investment plan, if and when he or she heads off to college, the money saved in that account will be factored into the amount that they will be able to contribute to the costs, and can have a drastic impact on the amount of financial aid you’re offered. However, with a 529 plan, the money saved has little impact on the loans they can get and can make a significant impact on the cost of higher education.