Ep # 12 - Grandparenting 101: Instilling Money Values in Grandchildren
This month Joe and Regan dive into how to educate grandchildren about money. They use real-life examples like grocery shopping and budgeting exercises. They look at how grandparents can make meaningful contributions, such as gifting money with a purpose, like for a car or post-secondary education while instilling lessons about financial responsibility.
By engaging in open conversations and setting positive examples, grandparents can play a crucial role in shaping their grandchildren's financial literacy and long-term financial well-being.
What You’ll Learn in Today’s Episode
Teaching the Value of Money: Grandparents can help grandchildren understand the concept of money, its value, and how it's earned. Using real-life examples like grocery shopping can illustrate budgeting and decision-making.
Financial Contributions to Grandchildren's Future: This could include gifting money with a specific purpose like saving for a car or education.
Money Doesn't Buy Happiness: Use analogies and real-life experiences to illustrate that material possessions may provide temporary pleasure but aren't the key to lasting happiness.
Modeling Financial Behavior: Grandchildren often learn from observing the financial behavior of their parents and grandparents. Modeling good financial behavior is crucial in shaping children's understanding and habits regarding money.
Resources for Financial Education: Use resources like the "Money and Youth" program, which offers structured financial education for different age groups.
Ideas Worth Sharing
· "Giving money with purpose can teach kids about investing and financial responsibility."
· "Buying things doesn't necessarily bring happiness; lasting joy often comes from experiences and relationships."
· "Modeling good financial behavior is key; children learn by observing."
· Every small purchase takes away from larger goals; it's about prioritizing and saving for what truly matters."
· "Engaging in open conversations and practical lessons can shape children's financial literacy and habits."
Resources
Retirement Planning Simplified
Your Canadian Retirement Specialist
The Estate Planner and Family Registry
Teaching Grandchildren Budgeting Without Spoiling Them
This month we explore retirement planning topics for grandparents who want to impart financial lessons to their grandchildren without overindulging them.
Financially Contributing Without Spoiling
Grandparents often ask how they can financially contribute to their grandkids' futures without spoiling them or creating a sense of entitlement. Here are some tips:
* Spend money on shared experiences like trips, events, or activities. This creates opportunities for quality time together where you can have meaningful money conversations.
* Give money for specific future goals like post-secondary education rather than just handing out cash. This teaches the value of saving and gives kids motivation.
* Offer to help kids save on big purchases like cars or computers. Make them contribute earnings, gift money, etc., and help invest it. Then whatever is saved by the target date is what they can put towards the purchase.
Teaching the Value of Money
Here are some ideas to teach grandkids the value of money:
* Explain in simple terms where money comes from - jobs, businesses, investments, etc. What it represents, how to earn it, and what they can buy with it.
* Do grocery shopping together and get kids to guess the prices on items. Explain why basics like bread cost less than treats.
* Show them a household budget. Explain there are competing priorities for money and you can't buy everything you might want.
Understanding Budgets and Living Within Your Means
* Walk through your household budget categories like housing, food, travel, etc. and what percentage goes to each.
* Explain how overspending in one category leaves less for others. Relate it to running out of money before the next paycheck.
* Do a shopping trip where they get a set budget to buy items on a list. If money remains after getting essentials, they can spend it on treats.
Money Doesn't Necessarily Equal Happiness
* Reflect on your own lessons around money and happiness. Does buying material things really bring lasting joy?
* Use analogies they understand. Eating candy all day brings short-term happiness but leaves you sick. Overspending on toys or trinkets provides temporary joy but no long-term financial security.
* Discuss where they really get enjoyment from. Experiences and time with family and friends or possessions? Remind them you don't need money to have fun playing outside.
While gifts and contributions can be part of generously supporting grandkids, nothing beats teaching money skills, modeling sensible spending habits, and having open conversations about finances. Actions speak louder than words – lead by example with your own behavior around money.