It’s finally here – the long summer weekend with the grandkids to which you’ve been counting down the days. You’re headed to the amusement park…the one the kids have been dying to hit as soon as they were “old enough.”
While you’re pacing the house waiting for them to arrive, you start to do the math. Of course, there’s the cost of tickets. And, lunch. Maybe an ice cream cone or two. Then there’s the $20 it will cost to win Susie that to-die-for stuffed animal. And, you know Billy won’t be able to pass by the souvenir shop without resorting to some well-executed pleading for the snazzy theme-park pencil case.
And, who are you to disappoint?
Just like that, a day with the grandkids has become a three-figure drain on your wallet.
It’s a veritable fact of nature: Grandparents love to spoil their grandkids. A 2002 study by AARP showed that a full 93 percent of grandparents spend money on their grandkids purely because they enjoy it. But, visits with the grandkids don’t have to turn into spending sprees that send them into sensory overload and you wondering where all your cash went.
With some advanced planning, conversations, and a little creativity, you can keep your spending in check while also imparting some financial wisdom to your grandkids. Bonus: They’ll be having too much fun to realize they’re learning.
Make A Plan
Dayana Yochim, a personal finance expert at The Motley Fool in Alexandria, V.A., has an easy, guilt-free way to spoil the grandkids: Plan on doing it. Make spending on them a line item on your own budget, with specific amounts allocated for visits and activities.
Linda Leitz, a Colorado Springs-based certified financial planner who authored The Ultimate Parenting Map to Money Smart Kids (Bright Leitz Publishing), echoes the feeling of liberation that a budget, or better yet, a spending plan, can provide. If the money’s planned for specific expenses, it’s less likely you’ll act on the impulse to spend frivolously.
Talk About That Plan
Turn that well-crafted budget into a teaching tool. Talk to the kids about how much you have allocated for the day. Then, discuss together how you want to spend it. Use it as a real-time lesson in budgeting. “Giving hands-on practice, managing their own money, is a really good way to teach things,” says Yochim.
Exercise Your Powers
Grandparents hold hidden powers when it comes to teaching financial lessons. Whereas parents’ attempts to teach money lessons might easily resemble a cacophony of “no’s” and nagging, kids have a way of listening – and hearing – grandparents’ words of wisdom. “Children might listen to them, more than they might listen to their own parents,” says Yochim. “So the lessons of money management might be heard.”
Use Cash Or A Pre-Paid Credit Card
To help kids understand just how quickly money can vanish, give it to them as a cash allowance. Let them physically experience how much they receive, how much they give away, and how much they have left at the end of it all. In days where even Barbie has a charge card, the humble dollar bill can go a long way in giving kids a tangible grasp on what money can do. And, this can set them up for a long-term understanding that credit cards do not equal free money.
If you do use plastic (hey, it's waterproof and won't get soggy on the log flume ride) opt for a pre-paid credit card. As it's swiped at the register, point out to your grandkids how you saved for the trip by setting aside a certain amount on the credit card. This way you could really treat them special; but, once the amount on the card is spent, it's gone.
Cash can also turn what may be an impulse purchase into a thoughtful decision. Leaf Van Boven, assistant professor of psychology at the University of Colorado at Boulder, cites research that shows people are more willing to pay for a product when they’re paying with credit. “It pushes the cost into the distant, nebulous future so we don’t have to ask whether we can afford the purchase ‘right now,’” he says of credit.
Be The Grandma And Grandpa 401(k) Plan
When setting up your spending plan with the kids, offer to let them keep whatever they have left at the end of the visit, say experts. “They don’t then end up getting the blue feathered hat at the theme park exit, because they don’t want to lose the money,” says Leitz.
Take it one step further: Offer to match whatever they manage to save. “Do not be above bribery,” laughs Yochim. “Money talks.”
Get Parental Buy-In
While you may be eager to impart your financial wisdom, be sure to check in with your grandkids’ parents first. For plenty of parents, money is the last taboo topic of discussion. Be careful that your actions, however well-intentioned, aren’t undermining any lessons being taught at home.
Remember: You Can't Buy Memories
Fran Murphy, a Maryland grandmother of three, has done the three-figure outings such as Ice Capades complete with all the trappings: dinner, souvenirs, costumes. She questions, though, whether an expensive event or big-name theme park visit actually holds more memorable value than a sunny day spent working together in the backyard vegetable garden.
The smartest budget is the one that leaves room for a splurge. When Fran decided to take one of her granddaughters skiing, she admits “there was no budget there,” with a laugh.
But, when you go for that big day out, be savvy about it. Keep an eye out for discounts in places such as retailer KB Toys, which in October started targeting grandparents (who make 40 percent of purchases there) with its Grandparents’ Rewards Club. Tip: Grandparents and adults 50-plus can save ten percent off their total purchase on Tuesdays. "It’s live and learn,” says Fran. “Being a grandparent is just like everything else.”
How well do you get along with your grandchild and other family members? Want to know if your personalities mesh?Find out here.