On the surface, a grandparent jumping in to teach a young adult grandchild about setting the best savings goals may seem a little off base. After all, isn't that a job for parents? Maybe, but kids can always use some reinforcement. Some may miss out on much financial advice altogether, either because money can be such a touchy subject, or because the importance of getting into the best savings habits early just never came up.
Some parents are more comfortable talking to kids about the birds and the bees than IRAs and CDs. In fact, a report from Charles Schwab disclosed that only 34 percent of parents teach teens how to balance a checkbook. Grandparents can help, especially by talking about goals, modeling their own experiences, laying out savings strategies, and discussing financial priorities. "Grandparents can be really influential," says Lynne Finch, author of The No-Cash Allowance, who spoke to Ally Bank. "For one thing, money may be more of a neutral topic between grandparents and grandchildren, not something they've argued about. For another, saving has a different connotation for older people than it does for younger generations: A grandparent who is willing to talk openly about his or her own experience can show how saving has helped them. They can explain how their money grew over time in a way that's really meaningful." Besides, who has more credibility on the subject of retiring well than a happy grandparent? Who has greater authority for showing how the best savings habits can pay off in the long run?
Grandparents can help young adults learn to be comfortable with figuring out a spending plan, managing their debt, and figuring out savings goals, from short-term (a new car next year), to mid-term (a house in five years), to long-term (including retirement). MyMoney.gov is a great place to start for grandparents who want to find basic financial literacy tools to share with their grandchildren.
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At Ally Bank, our accounts help families make their best savings strategies possible. No matter which way you decide to save, our rates are consistently among the most competitive in the country according to rates as published by Bankrate.com. Learn more at Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559).
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