Site Logo
Site Logo

5 Grandparental Pearls of Wisdom

11 July, 2017

It's not for nought that grandparents have historically been a revered and key part of societies across the globe. Almost a tenth of cash-strapped millennials today are lucky enough/need to get help from their grandparents to scrape together the money for the deposit on their first property. And the number of first-time buyers needing a financial leg-up just keeps increasing.

Giving Grandparents are a financial keystone of their family, besides also providing all of the other pearls of wisdom and support necessary in family life. But which are the key pearls to make sure you pass on to the next generation?

5 things grandparents can teach the next generation

Start early

Something to hammer home to your grandchildren, is that they need to get a savings habit going - the earlier the better. Tell them to set up a direct debit just after their salary goes in so they’ll never miss it, then increase it progressively when they get pay rises. The power of compounding is very powerful. £100 a month saved over 10 years, growing at 5% will give them a pot of £15,528, the same amount saved over 25 years gives them £59,550.

Whether they’re 18 or 40, pensions ( sound a long way off to most grandchildren. However, pensions are just long-term savings accounts with very appealing tax perks. This means that you basically get free top-ups from the Government when you pop savings into a pension. If your grandchildren don’t believe you, get them to throw some numbers into a pension calculator ( to see how much ‘little and often’ savings can add up.

Buy what you need, not what you can afford.

This is homespun wisdom that previous generations perhaps understood best. It sounds mean, but it's good to let your grandchildren know that just because they’ve got a few pounds in the bank, doesn't mean it’s automatically time to treat themselves. We all want our grandchildren to enjoy themselves, but they need to be aware that by using up unexpected extra cash on impromptu spending splurges, they won’t have the money when they need it for something important.

Debt bites

No-one would willingly pay 20-30% more for everything they buy. Yet when buying items on an expensive credit card and then not paying off the balance, that’s exactly what they’re doing. Living with debt can sometimes feel like an everyday part of modern life for your grandchildren's generation. Now that debt is readily available, you need to make your grandchildren aware that often it can be oppressive and leave people vulnerable during difficult times. It might feel like living life in the slow lane but making big ticket purchases the old-fashioned way, by waiting until they have the money to afford it, could be really beneficial to your grandchildren in the long run.

Money may not be the root of happiness, but it beats the alternative.

It’s pretty fashionable to suggest that money can’t buy happiness. However, it can buy peace of mind and freedom. It can enable people to change jobs, to travel, to take time out. Your grandchildren shouldn't dismiss its power out of hand.

Suggest to your grandchildren that they set aside savings into a Cash ‘emergency fund’ (usually around 3 – 6 months worth of your salary), to create a safety net. From here they can more confidently make decisions about what they'd like to do with their time and money. This financial fallback can prove very important when making decisions such as deciding if you’re ready for the stock market ( other investment options. From this point of security, your grandchildren could perhaps begin a savings pot which steps outside the safety of Cash savings, into potentially higher return options such as investing ( and Stocks & Shares ISAs (

Learn to do things yourself.

No-one's suggesting that the next generation need to plumb in a shower, or do their own electrical work, but previous generations often better understood the value of being ‘good around the house’. Being able to do basic repairs could save your grandchildren a whole lot of cash in the longer term. Workmen are expensive and unpredictable. Perhaps give them a run-down of the handy skills you've picked up through the years, or recommend that they try out a class - groups such as the Good Life Centre ( offer some very useful DIY workshops. 

Now that you've sorted out the best tips to pass along to the next generation, why not find out how to make your money work harder for you?

Check out our 'Finance for Grandparents (' article.

Finance for grandparents (