As a grandparent, I know there is no greater joy than experiencing the phenomenon of being a grandparent. And the excitement grows as we become more and more important to our grandchildren.
Now more than ever, grandparents are an incredibly important part of their grandchildren’s lives. The U.S. Census Bureau reported that 6.7 million grandparents live with their grandchildren and that approximately 33% of grandparents living with grandchildren under the age of 18 are responsible for their grandchildren’s care.
Even if you’re not raising your grandchildren, you could have a real impact on them. You can use this influence for good or, frankly, for bad. I’m going to talk about the impact you can have on your grandchildren’s financial habits. Your grandchildren are watching you and learning from you. Let’s discuss whether you’re the financial role model you want to be.
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I’ll break it down by looking at some of the money mistakes what we can do with our grandchildren, consciously or unconsciously, and how we can change our behavior, and hopefully theirs.
Mistake #1: Not encouraging grandchildren to earn and save money.
Remember when you were a kid and you picked out something you really wanted and worked hard to get it? You saved up money and finally bought that bike or that Barbie or that special gift for mom. I bet you took great care of that bike and you may still have that Barbie. Why deprive your grandchildren of that empowerment and joy?
Help your grandchildren set a goal to save for something they want (not too expensive). Suggest odd jobs the kids can do around your house so they can earn extra money to reach their goal. This encourages the work-for-money ethic, which is how money works. Celebrate when they are finally able to purchase the item they have been saving for. Don’t get ahead of themselves by working and saving and just buy them the gift; let them feel proud of what they have accomplished.
Mistake #2: spoiling your grandchildren.
I know a lot of grandparents think that “spoiling the grandkids” is part of their job, but it’s not (okay, I also know I just introduced myself as the “evil money expert”). As a grandparent, if you’re like me, you don’t want to encourage the “want-me, want-me” syndrome. In fact, you may be the first to comment on your child’s upbringing, saying that you think the grandkids are too materialistic and, frankly, always asking for things.
This may not come as a surprise, because you may have contributed to this pattern, this Pavlovian response. Do you always show up with a gift for the grandchildren? You may think that’s the role of a grandparent, but it also encourages the “entitlement agenda,” as I call it. You know how it works: When Grandma or Grandpa shows up, the grandchildren are entitled to a gift.
Just think about his Your relationship with your grandparents. I bet those fond memories don’t include all the gifts they bought you. Mine include the talks, the hugs, and the unconditional love. My grandmother Jewel was my biggest fan. That’s what I remember. I could call her at any time of the day or night and she would always make things better.
Create memories with your grandchildren. They want your time. You can do an activity with them. Do you cook or play golf? Those are great activities to do with grandchildren. You can turn them into learning activities, too. In the case of cooking, for example, this means reading a recipe or following Grandma’s recipe, going to the store to buy ingredients on a budget, and then explaining the science and art of cooking.
Mistake #3: Not preparing your grandchildren for their inheritance.
According to Cerulli Associates, all estimates indicate that baby boomers will leave an inheritance of more than $70 trillion to the next generation. Because many of them feel that their children have squandered the money, much of the inheritance may skip a generation and go to their grandchildren.
When considering inheritance, I don’t think money should magically be transferred upon death. It’s not a secret you want to keep, as it sends the wrong message. You are not your money, but your values. Let your children and grandchildren know what’s important to you and why you’ve left them this incredible gift. I assume your inheritance isn’t meant for them to drop out of school and sip margaritas on the beach.
Tell your children and grandchildren what your dreams are for them. It might be paying for college, buying their first home, or traveling. Also tell them what your favorite charities are and invite them to get involved with them while you’re alive. It’s much more powerful to share your passions while you’re there to explain why this is important to you.
Mistake #4: Creating competition with other grandparents.
You may have to look in the mirror to see this. Here’s the scene: You find out that the other grandparents bought iPads for the grandkids, and the grandkids were very excited. You got nervous, and so were you. Your dark inner self may feel like you’ve been outdone somehow, and you decide you want to be the ultimate grandparent, and you decide you’re going to buy the kids a pony. The challenge has been issued.
Don’t be that person. Resist this reaction. It doesn’t enhance your role and creates an unhealthy “measuring up” syndrome. Get kids excited when they receive another gift from someone other than you. Make sure you help your little ones collect memories, not things.
Enjoy being a grandparent. As the late author Ruth Goode noted, “Our grandchildren accept us as we are, without scolding or trying to change us, as no one in our lives ever has — not our parents, siblings, spouses, friends — and almost never our own adult children.”
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This article was written by our contributing advisor and represents his or her opinions, not those of the Kiplinger editorial team. You can view advisor records at SECOND or with Financial Regulatory Authority.
