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Financial Tips That Stand the Test of Time

This Sunday, September 9 is National Grandparents Day


This Sunday, we celebrate National Grandparents Day – a day to honor our elders and the wisdom and guidance they offer.

One of the most important roles a grandparent can play is educator. Among other things, grandparents can educate their grandchildren on money management, teaching them to become financially responsible and independent. In too many families, finances are only discussed in private, away from children and grandchildren, or, in some cases, not discussed at all. As elders, grandparents have the unique ability to share stories and money management tips to exemplify how they have been financially responsible with strategies that have stood the test of time.

Old-fashioned or not, here are general pieces of advice that have been passed down from generation to generation and still hold true today:

  • Have three to six months of expenses in a liquid savings account for use during emergencies.
  • Pay yourself first. A portion of each paycheck (10 percent is a great place to start) should be designated to a savings account of some sort to plan for the future.
  • Being “frugal” is not the same thing as being “cheap.” Being cheap is about spending less; being frugal is about prioritizing your spending so that you can have more of the things you really care about.
  • Debt on a non-appreciating asset and debt on an appreciating asset are two very different things. Keep dept on depreciating assets as low as possible.
  • Sacrificing in the short term will ultimately pay off in the long term.

Other than sharing simple tips and tricks, some grandparents want to be further involved in laying a strong financial foundation for their grandchildren through contributions to their future. Here are ways grandparents can do that:


Gifting stock to grandchildren for birthdays and holidays is a great idea for multiple reasons. It can provide a first introduction to the stock market and encourage grandchildren to start paying attention to what affects the market, causing its ups and downs. It can also be a lesson in risk tolerance. Many times, individuals who have not had much experience investing believe they are less risk averse than they are. As investors (young or old) start to watch their own assets move up and down with the market, paying attention becomes much more important to them. As with anything else, investment success starts with a comprehensive understanding.

Gifting stock can also be a lesson in patience for recipients. Unlike receiving cash that can be spent right away, there are typically barriers in place that may prevent the recipient from immediately liquidating the stock. Not to mention, depending on the stock’s performance, it may not be smart to do so right away. Grandchildren of all ages can benefit from seeing the investment process play out and watching their investments grow over time.


Many of our clients have the goal of helping their grandchildren pay for college. Some feel obligated because they know how expensive it can be, others just see it as a way to give their grandchildren a gift that will impact them for a lifetime. Regardless of the intention, 529 plans are a great vehicle to help grandchildren save for college, and to start early.

Money in a 529 fund grows tax free and can be distributed tax free if used for qualified educational expenses. There is flexibility within most plans to invest appropriately, given different time horizons and situations. The plans also offer the flexibility to transfer to younger siblings or other family members if the account is over funded or the child chooses not to go to college. Penalties encourage you to leave the money in the account and discourage you from spending it on something that may be more immediate.

Grandparents hold a wealth of knowledge from life experiences, including financial advice. National Grandparents Day is a great reminder for grandchildren and grandparents to reach out or spend time together interacting and learning from each other.

Sara Fox is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley in Loveland. She can be reached at 970 776 5506 or Sara.Fox@morganstanley.com.

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