Summer school holidays can be a busy time for grandparents, with two fifths (42%) saying they’ve been lined up to provide free childcare, according to a survey by Lloyds Bank.
It can also be an expensive time. A quarter (26%) have been or are currently funding activities over the summer while kids are under their watch, the research also found.
“Grandparents are summer holiday saviours, bridging the gap between annual leave and the never-ending school holiday,” says Sarah Coles, a personal finance analyst at Hargreaves Lansdown.
And this is just the tip of the iceberg for many, with lots of grandparents also helping out younger generations with university costs or getting on the housing ladder or dipping into their bank accounts when kids need something new.
Of course, if you have the means to do so, being able to help your grandchildren financially is possibly something you’re keen to do but it’s a good idea to think about the most sensible ways of going about it, and balancing generosity with helpful life-lessons too.
Here are five tips from Hargreaves Lansdown for how grandparents can help to transform their grandchildren’s lives financially…
1. Teach them about money early
Grandparents have the freedom and space to plan the sorts of handy money lessons that harassed parents may not have time for; for example, shopping trips with a budget can help them learn to prioritise. Grandparents taught their own children about money – Hargreaves Lansdown says two thirds of people learned about financial issues from their parents – so they already have plenty of experience.
2. Kick-start good habits
You can give them their first money box and talk to them about saving up. Check their savings account statements regularly with them, so they can see the impact on a regular basis.
3. Encourage the savings habit by helping them to set goals to buy something they really want
Set a goal they can reach in a few weeks. Once they have reached that, set another a little further away. Matching what they save pound for pound really helps here.
4. Get them into investing
A Junior Isa can be a great way to do this, by talking to them about companies they’ve invested in. As they get older, help them assess their investments, so when they have control of the funds, they’re comfortable making investment decisions.
Consider lending a hand in building the Junior Isa, which could make a huge difference, particularly in the early expensive years, where parents have a battle to make ends meet.
5. Support them from income with school fees or university costs
If you can afford sums from your income that don’t affect your standard of living, you could make regular payments that offer a dual benefit. Not only will it help your grandchildren cover their costs but, depending on the circumstances, the cash may also be considered to be out of your estate for inheritance tax purposes.