4 Money Mistakes Even Good Grandparents Make With Their Grandkids
By: Neale Godfrey - December 20, 2017
The Census Bureau report indicates that grandparents are an active part of the household. “About 4.2 million households, or 3 percent of all households, contained both grandchildren under 18 and their grandparents in 2012. More than 60 percent of these households were maintained by a grandparent and about one in three had no parent present.”
Whether or not you are raising your grandchildren, you have an incredible impact on them. Use this influence for good. It’s not just about the money; it’s about your conversation and actions. They are watching you and learning from you. Are you the grandparent you want to be when it comes to teaching them financial responsibility?
We are all trying hard. Read these four money mistakes you’re probably making and see if any resonate with you.
Mistake #1: Not Preparing Your Kids And Grandkids For Their Inheritance
A 2016 story published on CNBC.com indicated that approximately $30 trillion will transfer to our grandchildren. Because many Baby Boomers feel that their children have blown-it when it comes to money, much of the inheritance may skip a generation and head into the pockets of their grandchildren.
I am not a believer that money should just magically transfer upon your death. This is not the secret you want to keep; it sends the wrong message. You are not your money; you are your values. Let your kids and grandkids know what is important to you and why you have left them this incredible gift. Tell them that their inheritance is not intended for them to drop out of school, drink margaritas on the beach, and pierce every inch of their body.
Convey to your kids and grandkids what your dreams are for them. You may want them to pay for college, or to pay for their first home, or travel. In addition, let your family know about your favorite charities, and get them involved with those while you are alive. It’s way more powerful to share your passions while you are there to explain their importance to you.
Mistake #2: Spoiling The Grandkids
Many grandparents may feel that “spoiling the grandkids” is part of the job description, but it’s not. (Okay, I know that I just set myself up as the “evil money expert;” however, you don’t want to foster the, “I want, I want syndrome.”) Be the first one to discuss your kid’s parenting of the grandkids, citing that you think the grandkids are too materialistic and are frankly always asking for things. This may be no surprise because you may have contributed to this pattern, the classic Pavlovian response. Do you always show up with a gift for the grandkids? You may think that this is the role of a grandparent, but it also fosters the “entitlement program,” as I call it. You know how it works; Grandma or Grandpa show up and the grandkids receive a gift.
Just think about your relationship with your grandparents. I bet those fond memories don’t include all the gifts they bought you. Mine include the talks and the hugs and the unconditional love. My Grandma Jewel was my biggest fan. That’s what I remember. I could call her at any time of the day or night and she always made things better.
Build memories with your grandchildren. They want your time. You can do an activity with them. Do you cook or play golf? Those are great activities to do with the grandkids. You can turn all of these into learning as well. Cooking, for instance, involves reading a recipe or following Grandmas’, a trip to the store to buy the ingredients, and then the science and art of making the dish.
Remember when you were a kid? You picked out something that you wanted and you worked hard for that. You saved your money and finally bought that bike or Barbie or a special gift for Mom. I bet you took care of that bike and you may still have that Barbie. Why take that empowerment and joy away from your grandkids?
Give your grandkids odd jobs to do around your home, so they can earn extra money to reach their goal. This activity fosters “work-for-pay” principles and gets them closer to their goal, without undermining their hard work. Celebrate when they finally get to buy the item they have been saving for.
Article source: Forbes.com
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