Life Tips that a Grandparent Can Give to a Teenager

Grandparents today have many things that they can teach to teenagers. The one thing that today's seniors have and teenagers don't have is life experience. Seniors have lived and experienced things that young people have yet to go through. 60 minutes commentator Andy Rooney said that, "These kids today make fun of us for being forgetful. Well, my mind has so many things in it, like History, that in order to put in a new piece of information, I have to kick something off of the hard drive in my head. The teenagers have nothing up there to forget." Here are some areas that grandparents can help their grandkids with.

Today, young men and women go through 12 years of education through their senior year of high school. Then many go on to junior college, technical schools, or four-year colleges. The sad thing is that few schools ever teach students about managing their money. That is a shame. Having a grandparent as a mentor is a wonderful gift. Sit them down and talk to them about life and managing money.

Probably the greatest thing that you can tell a teenager, is that you should live your life one day at a time and that tomorrow is promised to no one. Nothing stays the same. Life is going to have its ups and downs, and you have to roll with the punches. No matter how bad things look today, tomorrow is another day. You get another start. Learn from your mistakes and don't repeat them.

Teach your grandkids about finance. One special thing is to teach them the 10% Rule. This rule teaches you to always pay yourself first. Save 10% of your pay for yourself and invest this for the future. For instance, regular investment in a Standard and Poor (S&P 500) Mutual Fund with the dividends reinvested for growth can make a teenager almost a millionaire by the time he or she is in their late 40s.

The power of compounding is amazing. Using a method called Dollar Cost Averaging allows them to buy more shares when the mutual fund price is low and less shares when prices are high. It is important that they learn how to invest monthly.

If you can impress upon them to develop regular saving habits in their teen years you will be putting them far ahead of their peer group. Tell them that they don't need the latest fad clothing, CDs, cell phones and all the other things that their friends are wasting their money on. I was shocked recently when my 24-year-old niece told me she spends $70 a month for her cell phone. That is $840 a year that could be invested.

Insurance is another area that a teenager needs to learn about. Eventually they will need car insurance, homeowners insurance and possibly life insurance, and disability insurance. Smart people get 3, 4 or 5 competitive bids from different insurers. Insurance companies know that people tend to be lazy, and won't shop around. The insurers can raise their rates and profit on these types of people. Money not spent on insurance is money saved.

Banking is another thing that they need to know about. You will need a checking account. Banks charge fees for these accounts. Find a bank that gives free checking. There is more money that can be saved. Also, banks sometimes offer special bonuses for savers above normal interest. I recently got a free small television, and a $77 MasterCard Gift Card for depositing $500 in a new checking account and signing up for monthly bill payment for a 77 day period. Some banks charge for debit cards, some offer them free. You have to ask and you have to shop around for the best deals.

So do your grandchildren a favor and teach them a little about life in general. Teach them that tomorrow is another day, and also to learn from their mistakes. Give them lessons about investing their money and shopping around for insurance and banking services. Hopefully they will someday look back and thank you for what you taught them.