Have you ever talked to your grandkids about money?
There is a popular quote saying that “the early bird catches the worm”. It refers to the fact that people who discover “the secrets of life” at a young age are more likely to be happier and more successful in their daily lives. Long story short, this can help them always be ahead of the game.
We’re sure that when it comes to money, you wish you had learned about its value when you were a child. The earlier you start learning about all sorts of things that are usually difficult to handle, the easier it’s going to get when you’re older and wiser. So why not teach your grandkids everything you know about finances? This way, you’ll get to spend time with them and help them acquire skills that are going to be very useful in the long run.
At the end of the day, children of all ages will end up dealing with money throughout their whole lives, which makes it a must to teach them young about financial literacy. In conformity with studies and financial experts, by the age of 7, kids would already have anticipated how money works and what they could get with it. In other parts of the world, such as Singapore, children usually start taking care of their own daily allowance at primary school.
If you want your grandchildren to be successful and know how to handle their money, you’d better teach them everything you know as soon as possible. Speaking of that, we’ve put together a few tips and tricks, as well as some topics that you can use to help your beloved children in your life kick-start their savings journey. Here are 7 things you should tell them about:
The first thing you can talk about with your grandkids is the importance of earnings. It doesn’t matter how young they are, you can still teach them that it’s necessary to earn their own money by doing certain things. Did they make their bed in the morning? Did they put their plates in the sink after they finished eating? Reward them for completing the tasks. Even if you only give them a few scents, they will learn the habit of earning.
The first decision your grandkids are going to make about money is how they’re going to spend their earnings. When a kid earns money for their work, even if it means making their own bed in the morning, they will understand the importance of hard work. They will know that things aren’t simply handed to them if they don’t do something first.
If you want to make your grandchildren mindful of their finances and how they choose to spend them, you should talk to them about what they can actually buy or want to buy.
Of course, it doesn’t matter if they make smart decisions or not, but they will learn that they are the ones in control and are able to choose what they want. Even if they make a mistake and regret it later, it’s an opportunity for them to choose better the next time.
As the little ones learn more and more about the importance of earning money and making a livelihood for themselves, they will actually come to the conclusion that some things are more important than others. There are some items that are more affordable, while others are on the pricier side, which means that they require more savings.
That would be a good time to introduce your grandkids to the piggy bank and teach them how to save money so that they can purchase the things they want. They will learn that good things take time and that they need to work to be able to get them.
If your grandchildren are a bit older, you can open an account for them, which will also give them the ability to multiply their savings. You can open a joint account, which means that you’ll be able to keep track of their finances.
Budgeting is a common problem that a lot of adults have. Whether it’s because they didn’t receive good financial literacy when they were younger or they simply can’t stick to a budget, they spend more than they manage to save.
The same thing can happen to your grandchildren too if you don’t teach them young how to take care of things. To avoid potential problems and even falling into debt, a great thing you can do is to create a budget for your grandkids. Ask them to note all their expenses during the current month somewhere and then plan for the next one together.
5. The 50/30/20 rule
When your grandkids start making a good income, it’s the perfect time to tell them all about the 50/30/20 rule. Some people say that it’s too early for that, but we believe that the faster you start teaching them about the golden rule, the easier it’s going to be when they’re older.
This rule is one of the best ways to make sure that your little ones have financial security in the end. This simple guideline means that 50% of the income is spent on needs, 30% on wants and the rest of 20% goes directly to savings. Even though this rule is one of the most basic ones possible, it’s really important for young kids to know how to make decisions based on their income.
6. Be an example
If you want to teach your grandchildren everything you know about financial literacy, you have to set an example for them. This means that you can talk to them about your own savings and what exactly you are saving money for. Kids will know that you do exactly the things you tell them about, and it will make them more motivated to apply the same pieces of advice you keep telling them about.
Let’s be honest here: children are a lot smarter than you might think, and they’re also very fast learners. So why not take advantage of their memories and talk to them about finances and investments?
Maybe your financial literacy started a lot later, but money is one of the most important things in the world, and we’re sure that your grandchildren’s education is a priority for you. A conversation about investments shouldn’t be a long or boring one. It can be as simple as explaining to them the difference between a fixed and a recurring deposit. You can even open a deposit, which is a great way to teach them more about how to multiply their money.
If you want to take it up a notch, you can even introduce them to more complicated things, such as bonds and stocks. However, you need to keep in mind that the first big step toward investing money is to be aware of the risks. Allow children to do their own research and come back to you with questions.
…When do you think is the right time to teach children everything you know about financial literacy? Have you ever talked to your grandkids about money? If you have any suggestions or experiences you want to share with us, leave them in the comments!
…Speaking of money, are you curious to discover some great things about finances and how to make the most out of your credit card? If your answer is yes, check this article out: HAVE A CREDIT CARD? HERE ARE 10 TIMES YOU SHOULD USE IT WITH CONFIDENCE!