Many families gather for the Thanksgiving holiday and acknowledge their gratitude for each other and a bountiful meal. This is an opportune time to connect with generations of family members over topics involving financial responsibility, planning and budgeting to teach younger generations healthy financial habits.
Who better to impart this financial wisdom than grandparents, who can speak from years of experience. Not to mention, grandparents have an advantage over parents – they can speak more freely with their grandkids, and in turn, the grandkids open up to them more. Many children dismiss advice from their parents, but that same advice can be received differently when delivered by a beloved grandparent.
Key financial lessons that can be taught this holiday season include:
Understand the Value of a Dollar
Engaging grandchildren in giving back by volunteering at a local food bank or another charity that sorts food for the homeless, or serves the needy a Thanksgiving meal, can serve as a bond and drive home a valuable message. Grandkids of all ages would benefit from seeing firsthand people who have experienced financial hardship and are forced to rely on the kindness of strangers. The personal impact from interacting with the less fortunate, along with the accompanying awareness and conversations about financial planning, can spur greater bonds between grandparents and grandchildren.
Eliminate Unnecessary Spending
Hand-me-down furniture, cars and home goods may all be welcomed by a grandchild. Gifting these items may also be a good starting point for a conversation about financial choices and priorities. If a grandparent lives near a college and has a spare bedroom, offering the grandchild free room and board in exchange for some household and yard chores is a great way to save on college expenses and deepen the relationship.
Never Too Early to Invest
Teaching moments are possible when a grandparent gifts a stock to a grandchild, along with a discussion of dividend reinvestment and capital gains. Setting up a college savings plan such as a 529 and discussing it with a grandchild can also be a great way to introduce the concepts of saving, compound interest and even income tax planning.
Get in the Habit of Following a Budget
For grandchildren who have jobs, grandparents could propose a sort of matching program by putting funds into a Roth IRA, college fund or savings for a major goal such as a trip or a car. This is a great time to introduce the concept of separate money “buckets,” for saving, spending, donating and investing. A grandparent can use this opportunity to relate their own story of saving for retirement while budgeting for current cash needs and sending children to college.
Thanksgiving is a joyous time for many families. Amid the turkey and cranberry sauce, consider adding a side dish of financial responsibility to have a lasting impact on generations to come. And don’t forget to stress the importance of working with a CERTIFIED FINANICAL PLANNER™ professional down the line to help your grandchildren develop and follow a comprehensive financial plan to set them up for future success.