Help them save for an education, but teach them now
Yes, you can (and you should) contribute to your grandchild’s 529 education savings plan for a college education. But there’s another kind of education you can share with them too — your experiences and values to teach them money skills that can empower them for a lifetime.
Stretch that dollar
Your grandchild probably loves pocket money or allowance. You can show them how far their money can go when they spend wisely. For instance, visit a yard sale or a thrift shop and show them how many toys and books they can get for $5 versus at a big-box store.
Small-biz fun
Nurture budding entrepreneurs to help them see that making money takes creativity, work and perseverance. Younger children will love selling lemonade or cookies, while older ones can earn big bucks with a neighborhood dog-walking or lawn-mowing business. Get creative! If they’re tech heads, they could earn extra cash setting up computers and phones for people who aren’t as savvy. Are they passionate about crafting? Encourage them to set up a holiday boutique to sell their wares. Help them divvy up their earnings, providing guidance to put a small percentage in their 529 savings plan. As time goes by, check the balance together to see how it can grow.
Enjoy real life
Deep down we know that doing things is more fun than having things. And your favorite memory of your own grandparent probably isn’t of something they gave you. Show your grandchild the joy of connecting with people and trying new things. Playing soccer, cooking a meal or having a game night are all experiences that build great relationships and problem-solving skills without costing a fortune.
Save for a rainy day — or graduation day
College is way more expensive than it was 20, or even 10, years ago, and you don’t want to watch your grandchild struggle with debt as they become an adult. Get them into the habit of saving while they’re young by teaching them how to open and use a savings account or buy a U.S. savings bond. Offer a matching grant — for every dollar they save annually, you’ll contribute another 25%. If they have a 529 savings plan started, help them brainstorm ways to add to it by getting an after-school job or staging a play and charging admission.
Delay gratification
When the internet can ship you a sparkling new gizmo within two hours, it’s hard for people of any age to remember how much more you can enjoy a purchase when you have to plan and wait for it. Is your grandchild in the market for a new bike? Help them save for it by making a budget that outlines how much they have to earn and how they can do it by not spending as much on games or gear.
