27 September 2011
Being a grandparent, I know that you want the best for your family. As a parent you wanted the best for your kids, making sacrifices in order to give them a better life. Now you have an opportunity to share the most important knowledge you have gained for yourself – how to create wealth and keep it! For a moment, I want you to think back to when you were younger, say 15 years old and just imagine if you knew everything you know now about how to make money. If you had your time again would you use this knowledge to make better decisions?
Thinking of your situation, wouldn’t you like your grandchildren to discover the secrets of wealth creation and money management early in life? With the wisdom of financial hindsight and less pressure on time, grandparents like you are often in the prime position to be the best money mentors for their grandchildren.
So a question to ask yourself is “What lessons are you teaching your grandchildren about money?”
Are you the softie who gives them whatever they ask for when they look up at you with those big adorable eyes and grin – even when it is not their birthday? If you are, it is important to consider the underlying message about money the children will take on board if you simply give them the treats they want.
The strong consumerism in our society coupled with the fact that grandparents are more likely to have the financial resources to buy grandchildren what they want (which feels lovely) can be a recipe for disaster when trying to teach children the real value of money.
We know from studies that these days grandparents are tending to put more time into raising their grandchildren – some of them are in fact the main care-giver and spend more one-on-one time with the children than their parents. This puts you in a powerful position to influence your grandchildren in many areas including understanding the value of money and what it takes to be a good money manager.
The reality is, the younger you teach children the real value of money, the easier it is for them to learn the more complex money management processes later in life. Children are sponges and they are soaking in lessons all the time, even if you don’t realise it. The sooner they gain an understanding for the basic way that money works, the fewer money problems they will have as they become teenagers and then later as they move out of home as independent young adults.
A few ideas grandparents can implement to help their grandchildren include:
- Make time and take them to the bank and explain what it is and how it works.
- Help them understand the difference between spending and saving and why it is important to have a savings plan and what it can do for them.
- Ask them where they think money comes from and discuss what they think happened before there was money like we use today.
- Talk to them about different jobs and the fact that different jobs attract different rates of pay.
- Offer them opportunities to do chores for some money.
- Discuss with them what jobs around the home they should do because they are part of the family.
- Ask them about the next thing they are saving up for and how they are going to earn the money.
- Ask them what questions about money they have and help them find the answers – remember the best way to learn is to ask questions.
- Talk, talk, talk to them about money – have them grow up believing it is good to talk and learn about money so they are comfortable with any challenging money questions that come up for them in the future!
Looking for more ideas and educational material to teach your kids about money? Visit moneysmart.gov.au for more information.
Keeping children ignorant of how money works keeps them juvenile about money into their teenage years. If you help them to discover the basics while they are still young enough to believe what you tell them, the future becomes a whole lot easier too.