Grandparents occupy a unique role in the lives of grandchildren. Their experiences provide wisdom and guidance, and they often challenge their grandchildren in more compromising and agreeable ways than parents or other authority figures.
Grandparents Day gives us a chance to reflect on the incredible contributions grandparents make in the lives of their families, communities and friends. A grandparent can have a profound influence on a child’s life, and that includes money matters too.
Yet, data shows that grandparents may be hesitant to talk about finances with their grandchildren. This study found just 8 percent of grandparents say they are likely to start a conversation with their grandchildren (18 and under) about money and the importance of saving for college, even though 85 percent of young adults say they are open to having that conversation with grandma and grandpa.
This comes even as young people are bearing the brunt of the financial stress caused by the COVID-19 pandemic. In fact, young adults are three times more likely to experience pandemic-related financial stress, and 9 in 10 young adults who have experienced stress about their financial situation say it has had a negative impact on their mental wellbeing.
RELATED: Celebrate Grandparents Day!
OneAZ Credit Union has a few simple tips to encourage grandparents to teach their grandchildren the importance of saving, budgeting and setting good spending habits:
· Don’t just mail a check. Explain where that money came from and some ideas on how to use it (spend, donate, save)
· Pull from your own experience with saving and investing. Share what went right, what went wrong, what you would do differently. Having kids involved with investing for future education can be valuable because it teaches them early how to invest and what they are investing in.
· Lead by example. A study by the University of Cambridge found that money habits in children are formed by the time they’re 7 years old. Little eyes are watching you. If you’re slapping down plastic every time you go out to dinner or the grocery store, they’ll notice.
· Give Grandkids a chance to earn. Paying children for chores is a great way to teach the value of work and how to budget. Let them have a chance to earn a little money by helping you with chores or projects around the house.
· Set up a college fund. Many grandparents give the initial amount to set up an education fund for grandchildren. If you have a teenage grandchild and they are working a summer job, offer to match the amount they deposit into a college savings education. Review the account with them so they can see the power of compounding interest and start to plan for college expenses.
Do you have financial questions? OneAZ has answers! OneAZ’s experts are available to answer questions about smart saving, wise credit card use and money management. You can also check out OneAZ’s Financial Resources Guide for quick tips, videos and articles to help you live your best financial life.