Whether you are one of the millions of grandparents serving as a primary caregiver for your grandchildren or just a concerned parent (as I am) watching from the sidelines, there are things you can do to make those you care about more smart-money.
As of this writing, the market is down roughly 30%, and it can be an emotional roller-coaster. However, as a parent or grandparent, there proven ways to be diligent about money growth.
Raising money-smart kids is no easy task, especially in this world of instant gratification and $1,000 smartphones. Everything, it seems, is stacked against financial responsibility, but you can help your grandkids for their future!
It does not matter whether your grandkids are still too young for nursery school or already heading off to college — as a grandparent, you can make a real difference in their lives.
Here are some smart tips to help concerned grandparents raise money-smart grandkids.
Avoid the Urge to Spoil Your Grandkids
It is easy for grandparents to be overindulgent with their grandkids, especially when they see them relatively rarely. But, if you are the kind of grandparent who always arrives with armloads of gifts, you might want to rethink your strategy. Every Target run doesn’t need to include a gift to your precious grandchild.
Spoiling the grandkids may be fun for you, but it could be bad for them in the long run.
Instead of spending your cash on gifts, they will forget tomorrow, make a real investment in your grandkids and their future.
Give Monetary Investments Instead of Cash
Cash from grandma is a staple of many a birthday party or Christmas celebration, and there is nothing wrong with an occasional monetary gift.
But, if you want your grandkids to grow up money smart, you need to look beyond those cash gifts.
Supplementing those monetary gifts with long-term investments will help your grandkids see beyond the now and give them the tools they need to fight the instant gratification culture in which they live.
Gifting a few shares of stock or funding an initial investment in a mutual fund is a gift that will be appreciated for many years to come — long after that tech gizmo has been forgotten.
Contributing to an education account, such as a 529, can be a great way to invest in their future success. Other options are setting up custodial accounts. However, this is not financial advice, and you will want to speak to your financial advisor for the best options that will work for your needs.
Talk With Your Own Kids
If you are the primary caregiver for your grandkids, you have direct responsibility for their physical well-being and their financial education. In that case, you can make all the decisions and use all the tools in your toolkit to make the grandkids smarter about money.
Things become considerably more complicated when your own kids are raising your precious grandchildren. In cases like this, your own kids’ attitudes about money and spending will have a profound impact on your grandkids and how they feel about finances and investing.
Even if you disagree with the approach your children are taking, you need to respect their rights as parents. You can express your opinion — and make a difference with gifted investments and money-smart presents.
Also, knowing when to step back is equally important, as not to overshadow the parents.
My late Father instilled values surrounding smart-investing in me from a young age. And my Mom, she always taught me other priceless life skills.
Leave a Lasting Legacy
You can also help your grandkids be money smart by leaving them a lasting legacy. Estate planning is an essential consideration for grandparents, and there are various ways to structure your inheritance.
Talk to your attorney or estate planning expert about how best to leave your grandchildren a lasting legacy. From passing your IRA on to the grandkids to the new laws of IRA trusts, there are many things to consider.
Raising money-smart kids is hard, and raising money-smart grandkids can be even harder. The instant gratification culture seems to be getting worse every day, and saving money often gets put on the back burner. If you want to protect your grandkids and their future, giving them the tools they need to resist this urge to spend may be the best legacy of all.
Making a real difference if your grandkids’ lives should be a top priority, and setting them up for financial success is an area they could definitely benefit from immensely.