5 Money Tips for Grandchildren

Did you know that Isaac Newton introduced the ridges on coins? This is just one of the many interesting facts included in Deborah Meaden's Little Experts book ‘Why Money Matters’.

The Dragons’ Den investor and entrepreneur has taken pen to paper to create a children’s guide to money – and it’s inspired us to come up with our own tips that we thought we’d share with you.

Financial literacy is increasingly important, and the earlier it’s introduced to children the better. So if you’re at a loose end this summer, why not go through the below with your grandchildren and give them a head start when it comes to the next school year?

Why saving matters

One of the most important lessons we can teach grandchildren is the value of saving. In a world of instant gratification, it can be tempting for young people to spend their money as soon as they get it. But by instilling in them the importance of saving, we’re setting them up for a lifetime of financial security and stability.

Saving money is not just about putting it aside for a rainy day, it's about understanding the power of delayed gratification. It's about teaching children that the things they want may not be instantly attainable, but with patience and discipline, they can achieve their goals.

Whether it's saving up for a new toy, a car, or even their university education, we can show them that by setting aside a little bit at a time, they can reach their dreams.

Furthermore, saving money teaches our grandchildren the value of hard work. It shows them that the things they desire in life require effort and sacrifice. They learn that money doesn't come easily, and that it must be earned through dedication and perseverance.

The value in starting early

Encouraging your grandchild to save at least half of their pocket money or earnings is a good place to start. They can begin with small amounts that gradually increase over time. Show them the power of compound interest, and how even small amounts saved regularly can grow significantly.

Make saving fun by creating savings goals that your grandchild can relate to, such as a day out with friends. Teach them how to track their savings and celebrate milestones along the way. When your child sees the results of their savings, they'll be inspired to continue saving for larger goals.

The concept of investing

Introducing your grandchildren to the concept of investing can be a game-changer in their financial journey.

Investing is not just about making money; it's about making money work for you. By teaching your grandchildren the ins and outs of investing, you are empowering them to become savvy decision makers and risk takers. They’ll learn how to analyse market trends, assess potential returns, and make informed investment choices that align with their financial goals.

But investing goes beyond the realm of finance; it fosters critical thinking, patience, and discipline. It teaches them to embrace uncertainty and seize opportunities.

So, open their eyes to the world of investing. Show them that it's not just for the wealthy or the older generation. With knowledge, guidance, and a sprinkle of enthusiasm, you can ignite a passion for investing that will shape their financial future.

Talk about debt

Debt often has a negative connotation, but it's not inherently bad. It's important for children to understand the different types of debt and how to use them responsibly.

For example, borrowing money to purchase a home or invest in higher education can be considered a good debt if it's managed well. However, credit card debt or high-interest loans can quickly spiral out of control and harm your financial wellbeing.

Teaching children about good debt and bad debt can help them make informed financial decisions in the future.

It's also important to teach children about credit scores and how they can impact future borrowing opportunities. By instilling these lessons early on, children can avoid the pitfalls of bad debt and make responsible financial decisions as they grow older.

How to manage money online

Managing money online is an essential skill for everyone in today's digital age. Online banking, budgeting apps, and digital wallets are just a few of the tools available to help kids manage their finances responsibly. It's crucial to educate children about the risks and benefits of managing money online and how to keep their information safe.

Start by setting up a secure online account for your grandchild and show them how to navigate the interface. Encourage them to monitor their account regularly and keep track of their spending.

Using budgeting apps can also be helpful in teaching children how to manage money online. These apps allow kids to set financial goals and track their spending while giving them a better understanding of their financial habits and patterns.

To sum it all up...

As grandparents, you have the incredible opportunity to not just spoil grandchildren with gifts, but to empower them with the knowledge and skills they need to navigate the complex world of money.

By teaching them the value of saving and encouraging wise spending habits, we can set them on a path towards financial security, independence and wellbeing.

#empowerment #wealthempowerment #financialliteracy #financialeducation #sharedknowledge