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We Can Talk About Money With Our Grandkids
Did your grandparents teach you about money? My grandparents ended up talking to me about money simply by sharing a story about a refrigerator!
When My Grandma Bought a Refrigerator
As a newly married couple, my husband and I were having dinner with his grandma when she told us the story of how they got their first refrigerator.
This story most likely took place in the early 1930’s. She and grandpa were living out in the country and had a very small icebox, which meant frequent trips to town to purchase perishable food.
One day, she decided to purchase a refrigerator and make payments over time, as she thought that would be better than making all those trips to town.
When her in-laws found out, they sat them down and explained to them how much they would end up paying for their new ’luxury’ (at the time) item. Then they made them a deal that if they promised to never purchase items on credit again, that they would pay for the refrigerator.
I remember looking at her and asking, rather incredulously, “So did you really do that?” And she said yes! From that day on they saved for everything they needed before making a purchase.
Well that story stuck with me for sure, and it had a major impact on how I viewed my finances as well! They had talked with their grandkids about money. Well done grandma!
What’s the Benefit of Money Conversations?
A study from the financial services company TIAAA-CREF in 2014 found that “grandparents have a big opportunity to make a positive impact on their grandchildren’s future financial success by simply talking to them about money.”.
However, the study finds that approximately 8% of grandparents indicate they may talk with their grandkids about money, while 85% of young adults between 18-24 say they would be open to the conversation.
Joseph Coughlin, PH.D., and director of the Massachusetts Institute of Technology AgeLab, collaborated with TIAA-CREF on the study. He stated “When it comes to saving for college, most young adults feel unprepared, and grandparents aren’t fully aware of how they can help. Conversations about money over time could help young adults more than their grandparents realize.”
Coughlin goes on to suggest starting these conversations when grandkids are young.
He explains, “When you empower children to understand financial decisions, they develop a lifelong sense of confidence and trust in themselves, helping them become successful adults.”.
3 Ways to Integrate Finances
So here are three ideas for talking about money with our grandkids.
One thing to note though, is to make sure you have the conversation with their parents first. You want to make sure you are all on the same page! We talk more about this in Comm 100, Ground Rules for Grandparenting.
1. Delay Gratification
Help your grandkids learn to delay gratification. When kids are young, many of their wants are so affordable it’s easy to just say “Oh I would love to buy this for you!” as we look into their adorable little pleading faces.
So not to suggest that we stop purchasing little gifts and surprises (that would be way too hard for me!) but that we also consider there may be times when we can encourage them to save for something.
Instead of purchasing the wanted item, purchase or make a savings bank they can use over and over again as they learn to save their own money. When you’re having a video chat ask what they are saving for, and then cheer them on!
2. Hire Them
Rather than giving them money, consider ‘hiring’ them to help you do some work when you are going to have some extended time in person with them. This is also a great time to teach them the concept of saving, spending, donating and investing the money they earn.
Preschool children could help sort items in a drawer, dust, or wipe down cabinets. Older elementary kids could help fold laundry, pull weeds or rake leaves. Older students could wash and clean out cars, or help with some basic home improvement tasks.
If you aren’t going to be with them in person, but would like contribute to their ‘work income’ at times, make a deal with their parents to fund special projects at their house. Or they could help you with tasks that can be completed virtually too! For older kids they could do things for you that need done on a computer like making a photo book, updating addresses or creating a favorite recipes cookbook, etc.
3. Share Your Stories
One of the best investments you can make in the money conversation is by sharing stories of your own financial past. These can be stories about your first job, a treasured item you saved for, how much your first car cost, or maybe how much a candy bar was when you were a kid.
You can also share with them something you wish you never would have bought, or something you are currently saving for. These stories have the potential to engage our grandkids’ imaginations and help create curiosity about their own financial futures. So let’s talk about money with our grandkids using stories too!
I am excited to include finances in the conversations I have with our grandkids as they grow, and I know that one of the stories I will be sharing with them is how the story of my grandma’s refrigerator changed my financial future.
