Corralling generous grandparents

Can you enlist them in your effort to teach kids fiscal responsibility?


Monica Ginsburg

When Sharon Theoharous’ mother-in-law visits from South Carolina, the Hinsdale mom knows she will arrive bearing lots of gifts for her two young granddaughters.

In addition, nearly every month her mother-in-law sends the girls, now 3½ and 2, gifts in the mail, typically books, finger puppets or stuffed animals. Birthdays and Christmas are a big deal, of course, and Theoharous already has watched the gifts grow from craft projects to tricycles.

"As the kids have gotten older, the gifts have gotten bigger and more expensive," she says. "How do I teach my girls the value of what their grandma wants to do and not stifle her intention because she enjoys it? These are her first grandchildren and she sees them so infrequently. How could I take this away from her?"

For many grandparents, showering grandchildren with gifts is a long-awaited rite of passage. They have raised their own children and now are finding joy in spoiling yours. But what happens when children expect a gift every time Grandma walks in the door?

Some parents, feeling overburdened by the skyrocketing costs of college tuition and other child-rearing expenses, wish grandparents would contribute to a savings plan rather than buy their kids the latest iPod or Xbox. Others, like Theoharous, wonder how to teach financial responsibility in the midst of all the spending.

"It is the privilege of grandparents to shower their grandchildren with gifts and many have waited for this moment," says Susan Beacham, Chicago Parent’s Healthy Finances columnist and founder and chief executive officer of Money Savvy Generation, a company that develops kid-friendly tools to promote fiscal fitness.

"The people who are going to leave a lasting impression and have the most impact on values are the parents. You are modeling for your children, not their grandparents."

Ask for what you want

If you’d like your parents to make a cash gift to your kids, or to scale back on gifting, you can ask. But they may not agree.

"Parents should absolutely be able to express what they want," says Beacham. "Then step back and see what you get." What’s important, she adds, is to preserve the relationship, even if the outcome is not what you hoped for.

For example, you may want to ask grandparents to consider donating directly to an established college savings plan, matching what your kids have saved or splitting what they would typically spend between a smaller gift and savings.

It all depends on the relationship.

"I can’t say to my mother-in-law, ‘Please don’t bring toys,’ " says Theoharous. "It would cause hurt feelings and strain the relationship."

And if you’re not sure if your parents can make a cash gift, don’t have the conversation. "It really isn’t their obligation to do this," says Wayne Janus, president of JMG Financial Group in Oak Brook. "It is the obligation of the parents and the children. If you’re not teaching your own kids about savings, you’re part of the problem."

Talk about values

Theoharous tries to "instill values in our kids whenever we can," she says. Janus suggests talking about values when you approach your parents, too.

"Ask your parents, ‘How do you want our kids to grow up? Do you want them to have it easy, or to value the things that you valued growing up?’ Most of my clients are grandparents who earned their money by working hard, not by inheritance," he says. "They have strong values. That will touch a nerve."

If you are fortunate enough to have family members who are helping you save for college, tell your kids who helped fund that account.

"Someday you will look at that college fund and you will be able to tell your kids that they were able to go to college because Grandma and Grandpa helped out," Janus says. "Or, if your kids are able to go to the college of their choice because of their grandparents, they will remember that for the rest of their lives. Grandparents want to be remembered. They have a passion for that."

But if Grandma and Grandpa prefer to be remembered for more immediate things—as the people who bought the cool iPod, for example—it doesn’t have to undermine your efforts to teach your kids to be fiscally responsible.

"You can tell your child that one of the ways Grandma shows her love for you is by giving you things," says Jon Gallo who, along with his wife, Eileen, wrote The Financially Intelligent Parent (New American Library, 2005). "It is different from the way we behave. We show our love one way, Grandma shows her love another way."

Parents, too, should look at the big picture. Grandparents’ generosity could be a blessing in disguise. If they’re willing to buy the expensive electronics or an American Girl doll, you won’t have to.

And some "mild entitlement" is OK, Eileen Gallo says. "You visit your grandparents and you know that they will spoil you rotten. Then you come back to reality when you get home."

Teach money lessons

Melissa Wise, a speech therapist in Lake Zurich, recalls her grandparents as farmers who lived simply but were able to give each of their 14 grandchildren a notable cash gift.

"What was amazing was that they lived through the Depression and they didn’t have a lot of income. They just lived simply but had a lot of money that they saved for the younger generation."

Wise received her grandparent’s gift when she was 10, and eventually used the money for a down payment on her first house. "It is a bit of an edge, when you are 20 years old, to have a little bit of savings and not be into the debt cycle."

Growing up, the gift became a tool to talk about saving, interest, how much things cost and the value of saving toward a goal. Wise’s parents already have started giving her 2-year-old son Andrew cash gifts at birthdays and holidays.

"It gave me the incentive to set up something separately in his name," Wise says. "Saving was very important to my grandparents and parents. I want to try to continue that idea. My husband and I hope to save for a college fund ourselves but I would love for Andrew to buy his own bike when he is 5."

Theoharous remembers opening her first passbook savings account when she was in second or third grade and the satisfaction she felt as she watched her savings grow. "This is something I want to do with my kids," she says. "I know what impact that had on me when I was younger."

Let them earn cash

In addition to an allowance your children might receive, Beacham suggests encouraging opportunities to earn extra money by washing the car, running a lemonade stand, helping out at a yard sale or some other kid-friendly job.

"If you don’t want an entitled child, don’t take away a child’s opportunity to contribute," says Beacham. "Every dollar your child can take into savings helps them to participate. This is huge for self-esteem. If we involve them in it, we can change our children forever."

As a child, Wise ironed her father’s shirts for $1 each. It wasn’t a life-changing amount, she says, but it allowed her to make her own decisions about saving, spending and donating money.

"Kids should contribute to the household because they’re members of the household," she says. "But if there’s something you’re paying someone else to do, why not pay your own kids?"



Many families support worthwhile organizations by making a financial donation. While this is important, writing a check is not likely to make a lasting impression on your children. Instead, find ways to involve your children in giving.

"You might say to your kids, ‘As a family, we have enough to live well. Sharing is a family responsibility,’ " says Jon Gallo, co-author of The Financially Intelligent Parent. "There are certain values that go with money and having enough. It’s important to teach your children how to give and for them to experience giving."

Here are some ways to get started:

• Donate gently used toys your children have outgrown. Let your kids help select toys, check for missing parts and pack them up for delivery. Hinsdale mom Sharon Theoharous doesn’t think her preschooler are old enough to really get it, but she hopes if she starts donating toys when they’re young, it will start a family tradition of giving to others. "I’d like to explain to them that some people have more than others," she says. "We have more than some and we need to give to others who have less than us."

• Support your favorite cause by participating as a family in a walkathon or another type of fundraiser.

• Send a care package to American soldiers in Iraq along with a personal note. Frequently requested items include chocolate, lip balm, batteries, disposable cameras and puzzle books. See these sites for more information:,,

• Help Hurricane Katrina families rebuild their lives. Visit the Katrina Home Registry at Set a dollar amount and let your kids select something to buy for a family in need. Options range from coffee pots and toasters to larger household appliances and computers.

"It doesn’t matter what you spend, it’s the spirit of experiencing together, as a family, the ability to give to someone else," Gallo says.

Monica Ginsburg is a Chicago writer and the mom of two girls.

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