Top 5 money hacks for the grandkids
While you might believe 'spoiling the grandkids' is part of your job description as nan or pop, it’s a good idea to take stock and remember – if you had a relationship with your own grandparents – how many favourite memories included all the gifts they’d bought you? We’d tip it’s not many.
So, gather your lifetime of experience managing your finances and focus your energy on passing on some invaluable life lessons to your grandkids.
Key learnings covered in this topic
- Ways to teach your grandkids about money
- The value of passing on your life lessons
- The importance of relationships in learning about finances.
Here are our top 5 money hack tips:
1. You don’t have to spoil them
While it might be tempting to see the big cheesy grin they give you when you have a gift for them at every visit, you might instead be encouraging a sense of entitlement.
Instead of regular gifts, focus on building memories together and passing on invaluable lessons – things that will last their lifetime. Even consider passing on some of your personal possessions that they might appreciate, such as costume jewellery, trinket boxes or books.
2. Let them earn some of their own money and save towards goals
They might hear it from their parents, but teaching your grandchildren about setting savings goals is one of the most important things you can do to set them up for long-term financial success.
Help them save up for that 'next big thing'. Once they’ve set a goal and set a date to achieve it, with Mum/Dad’s permission set up a high-interest savings account for them and save towards the goal together by letting them earn some extra pocket money when they visit. Once they hit the goal, celebrate the milestone by planning to go and purchase the 'thing' together.
3. Teach them about investing
While you could consider investing for them on their behalf* (if your budget allowed) kids learn by example, so why not involve them in the investment process? Use the opportunity to share your good/bad investment experiences, what you’ve learnt along the way, and how they might be able to avoid investment pitfalls of their own in the future. It can be as simple as saving for something that’s better quality, over a version that might not last them as long.
Or, with Mum/Dad’s permission, consider investing in some stocks together and tracking the performance over time.
If you’re not too confident about investing yourself, you could both participate in the ASX’s Sharemarket game as low-risk, educational way to learn the ropes, before taking the plunge with actual money.
4. If they’re old enough to have a super account, help them to sort it out ASAP
Our financial planners often hear members lament, 'I wish I took more notice of my super when I was younger’. Don’t let your grandkids make the same mistake.
Helping them make sense of their super while they’re young will do wonders later on, thanks largely to the magic of compound interest. This can involve:
- Helping them check their employer (if relevant) is actually paying them super.
- Making sure they understand the importance of being with a super fund that performs well over the long-term.
- Helping them understand their annual statement.
- Combining super accounts to avoid paying multiple fees.
- Helping them understand their insurance cover needs.
The bottom line
There’s an old adage: give someone a fish, and you’ll feed them for a day. Teach them to fish, and you’ll feed them for life.
Aussies have a huge debt problem and generally low levels of financial literacy. Teaching the next generation to become money savvy and forming good money habits at an early age is a challenge we must rise to together. And while you might believe this task is one for their parents, school teachers, or others – consider the fact you may be uniquely placed to help, simply because they may be more likely to listen to you – their biggest fan.
Looking for more ways to teach your grandkids about money? Find out here.
*There are tax issues to consider if the child is under age 18.
Information correct as at 5 February 2024.