Money lessons are among the most important instructions that kids must learn at home. Parents can help a child to become responsible with their finances by teaching a lesson on saving money for kids, for example. Apart from moms and dads, grandparents — who have plenty of life experiences to share with the young ones — can also impart financial wisdom on their grandchildren. Here are some lessons that grandpas and grandmas can use in teaching money concepts to their grandchildren.
Money Lessons Kids Can Learn From Their Grandparents
Money Lesson #1: Needs Over Wants
It is natural for children to crave a lot of things. Advertisements or peer pressure can easily persuade kids to buy luxurious items. Also, most kids can simply ask their parents to buy them things they think are cool but actually are unnecessary in life.
Grandparents should teach their grandkids to always think first of what they need instead of what they simply want. Given their age and experience, grandparents know what is essential and necessary in life. They should tell the young ones to always prioritize the things that are important for their well-being.
Money Lesson #2: Earnings
It is easy for most kids to ask for an allowance from their parents. Sometimes this means they don’t have to work hard to earn money for themselves. Unfortunately for these kids, their parents won’t stay by their side forever to provide all the things they need. Soon enough, they will grow up, live separately from their parents, and have to earn their own money.
Grandparents should teach their grandchildren that it’s not easy to earn money. Unless a person wins the lottery or receives a huge amount of cash as a gift or as an inheritance, he will need to look for a job and work hard for his money. Children must know and understand that parents work very hard, sometimes even at multiple jobs, to provide for the whole family. To have a comfortable life in the future, children need to learn that they should earn their money by being industrious and dedicated to their work.
Money Lesson #3: Stock Market
The stock market is a complicated universe for most adults. Those who have no basic knowledge of finance and marketing have a hard time understanding it. A lot of grownups become interested in venturing into the stock market but not everyone succeeds.
Grandparents should educate their grandchildren about the stock market at a young age. The stock market is a very technical topic, and kids might have a hard time absorbing its know-how. Grandmas and grandpas can introduce the topic by making kids aware of what the stock market is and how beneficial it is for their future.
Money Lesson #4: Credit Cards
Some parents use credit cards in lieu of keeping cash in their wallets. Credit cards provide parents convenience in payment, leading kids to become fascinated with the purchasing powers attached to these small cards. Because of the convenience that credit cards bring, kids develop the impression that credit cards are essential in an adult’s life. In their young minds, they are already planning on getting one when they grow older.
Grandparents should teach their grandchildren about the proper and responsible use of credit cards. These cards definitely bring purchasing convenience and other financial advantages, but grandparents should warn kids that improper use of credits may lead to money disasters. Children should be aware that too much card usage means higher interest payment to banks, and that unsettled card fees may lead to potential bankruptcy.
Money Lesson #5: Scholarships and Student Loans
In school, there are a lot of things that kids worry about: tons of homework and projects, their reputation among peers, issues like bullying, etc. For most children, tuition is the least of their concerns — maybe not even a concern at all — because their parents take care of it, but as kids grow older, so do their parents. And there might come a time when parents can no longer finance the studies of their children due to sickness or old age.
Grandparents should teach the kids about scholarship opportunities they can avail in the future. Kids should know that they can apply for a scholarship, or they can get one if they perform well in school. Schools and institutions, however, are very strict in providing scholarships. An applicant must establish that he’s deserving to receive a study grant. Grandparents should encourage children to study very hard and to qualify for scholarships they’ll apply for in the future.
Money Lesson #6: Cost Cutting
Given the lack of maturity in handling money, some kids don’t value the importance of minimizing expenditures. For these children, their parents can easily — oftentimes automatically — give them allowances when they no longer have cash. Because of this, they don’t mind how much they have already spent, and how much money they have left.
Grandparents should teach their grandchildren about the value of cutting costs to save money. Life is not always comfortable, and there will come days when the budget is very tight. Kids should be aware that controlling and limiting expenditures allows them to create an emergency fund that may help in unexpected instances.
Money Lesson #7: Saving Early
For most adults, saving money is not very easy due to numerous bills and other expenses. This is why not all people manage to save money and have some spare cash for emergency purposes or for retirement. Most people — including some grandpas and grandmas — regret in the end that they were not able to start saving at a young age.
Grandparents should teach kids about saving money at an early age. For kids who are receiving allowances from their parents, grandparents should make them realize how lucky they are. These children should learn to keep part of their allowances for savings because they will not be depending on their parents financially forever. Soon, kids must grow up and learn to be financially independent when they grow older. Having some savings will help them financially when they decide to move out of the house or when they decide to start buying things for themselves.
Teaching money lessons to children will help them develop financial maturity as they grow. Although explaining money concepts and sharing lessons on saving money for kids may be tough for grandparents, the idea of raising a financially-responsible individual is definitely rewarding.
Are there other money lessons you would like grandparents to teach their grandchildren? Share with us your thoughts in the comments section below.