The MIT AgeLab, in partnership with TIAA-CREF and the AARP, is proud to announce a new study that examines grandparents’ influence on their grandkids’ money and saving habits. The study (read about it in TIME online and USA Today) which surveyed 1000 grandparents aged 50 and older and 1003 young adults aged 18 to 24, found that 85 percent of kids are willing to have a discussion about finances with their grandparents. However, only 8 percent of grandparents are willing to open up this conversation. These differences in perception emerge from the cultural differences between the baby boomers and the Millennials, said Dr. Joseph Coughlin, founder and director of the AgeLab. “Baby boomers almost took a kind of pride in not wanting to get advice from their parents. But Millennials seem much more open.”
Ninety-seven percent of young adults surveyed believe that saving for their future is very important, while 73 percent say that lessons from their grandparents could significantly influence both their saving and spending habits. 59 percent of young adults surveyed believe that their grandparents are “very good or excellent savers” and see them as financial role models. Yet only 30 percent of grandparents surveyed believed that they had any influence at all on their grandchildren’s financial habits.
Something that might factor into grandparents’ reluctance to speak to their grandkids about finances is the worry about stepping on financial toes. Dr. Coughlin brushes this hesitation aside, saying: “Life has gotten very busy for dual income households. Grandparents can fill in the gaps…they have the time and the stories to tell.” He adds, “Be tactful, not dictatorial.”
How to begin bridging this conversational gap between generations? Dr. Coughlin suggests framing financial lessons through personal stories and anecdotes, which have the potential to resonate more with today’s grandkids, rather than lectures. TIAA-CREF and AARP have also created online starter guides and worksheets that give helpful suggestions to grandparents, depending on the age group of the grandkid in question. Their guide for grandkids 12 years and older points out that “Often, they’ll let you know when they want to talk”—especially when saving up for big-ticket items such as a car or a college education that are no longer in the distant future. Their guide for grandkids under the age of 8, meanwhile, recommends making lessons out of "out of everyday adventures”—such as a casual trip to the grocery store. These online guides also help update grandparents on financial issues that have changed drastically since their young adulthood, such as the higher costs of college today.
Passing on these lessons to a younger generation becomes more important than ever in a world where ATMs and online banking and shopping have become commonplace, often making the value of cash hard to comprehend. Beginning financial conversations now, and connecting two different generations over money lessons, has become more important than ever.