If you have been blessed with grandchildren you’ll know just how savvy they are. From technology to creativity, they show just how progressive they are. However, despite their ability to adapt and change, many of today’s young people seem to be lacking what one might call ‘financial intelligence’.
As society steps towards being cashless, it is important to teach your grandchildren the value of money. It is perhaps one of the most important lessons you can teach them, but where to start?
If you have young grandchildren, this is the perfect opportunity to start discussing money and finances. If you spend time with them, use opportunities such as trips to the bank or the ATM to talk about how money is earned. If they receive pocket money, talk to them about the sort of ‘work’ they need to do in order to receive the benefit and help them understand that while most people have to work hard for their money, those who save and invest well can make their money work for them in the future.
If you have a game like Monopoly, it can be a fun way of giving your grandies a good understanding of how money works.
A large percentage of people find themselves spending more than they earn, largely because they don’t know how to budget. Give your grandkids a head start, by helping them to understand the value of a budget and how to balance one.
You can talk about ‘needs’ versus ‘wants’ with your grandchildren. Explain the benefits that can be had by delaying gratification and satisfaction. Revisit that discussion about saving and investing. Use a trip to the supermarket to provide a real example of how far $20 can go with your shopping list. You might also want to use vouchers, coupons and in-store special deals to demonstrate the ways in which you can ‘stretch’ your money. If there is any money left over at the end of your trip, put it in a piggy bank or jar and talk to your grandchildren about how that money can be saved and deposited into a bank account at a later date, unless of course they want to use it for something special.
Sure, the world is becoming cashless and it’s important to move with the times, but sometimes plastic is not so fantastic. You can talk to your grandchildren about credit cards and how companies that issue them make their money. Use examples your grandies can relate to, such as the purchase of a computer game or a piece of sports equipment on credit, taking into account minimum payments, the interest rate and how long it might take to pay off.
If your grandies have an online account, talk to them about the reality of that money disappearing from their account and show them by logging on. Believe it or not, some kids believe that the money in their savings account magically replaces itself like that never-ending packet of Tim Tams and it isn’t until they see it go from their account that they understand.
If you have knowledge of the share market or you have investments, talk to your grandchildren about these things. You might like to discuss what investment opportunities are available to them. You might even like to gift your grandchildren shares in a company for their birthday or a special occasion, explaining that they have a stake in something and they can follow its progress over time. Talk to them about the highs and lows of the stock market.
Financial wealth isn’t always about the money you earn. Many people get great satisfaction from being able to give. If you donate to charities — giving at food banks, donating clothing, buying a $2 pin for Legacy — show your grandchildren how you do it. Talk to them about the reasons why you do it and the value that can be had from being involved in this way. If your grandchildren see this as being something that is part of being a community the future is bright.
These small steps are not just a way of laying the foundations for securing your grandchildren’s financial knowledge, they are a way of ensuring their future financial success.
Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.