When Peggy Houser heard that her grandchildren weren't being given their small weekly allowances, she offered to take over the task for her daughter, who had simply been forgetting to dole it out.
But she didn't stop there.
Mrs. Houser wanted to be more than a dollar dispenser. She insisted that the grandchildren beginning in first grade sign an agreement to save a percentage, and that they also draft a spending plan together.
"People don't realize that children are ready for this at an early age," says Houser, of Denver, adding that her daughter was happy to have the help.
Soon, Houser's grandchildren got in the habit of socking away 10 percent of their allowance at the bank. They enjoyed having their own money to spend, and became eager to earn extra money doing chores as they worked toward their spending goals.
Some child-development experts recommend that adults introduce kids to the concept that people have to pay for what they want as young as age 2. As children grow older, they can then be introduced to banking, budgets, and investing.
Personal finance seldom ends up on a child's school curriculum. It's not something they can pick up from friends. Teaching youngsters to be savvy shoppers, good budgeters, and disciplined savers takes time and know-how both of which today's parents often lack.
Grandparents can often help. In many cases they have the time and the track record to be sound financial mentors. Unlike their children, who may be struggling with debt or lax with budgets, many members of this generation know how to pinch a penny and save.
"Grandparents have learned the hard way about money management," says Houser, a certified financial planner and co-author of "How to Teach Children About Money."
Surveys show that parents tend to be overconfident about their money-management prowess. Some 97 percent of parents said they understood financial matters "very well" or "fairly well," according to a recent poll by the Washington-based American Savings Education Council. Yet, 55 percent said they carried credit-card debt from month to month. Less than half said they make a budget and stick to it.
A look at some case studies in grandparent economics:
For Sam and Gloria Faucett's grandchildren, a trip to Wal-Mart or Toys-R-Us is a treat. It's also a lesson.
"We set a dollar limit to spend," says Mr. Faucett of Marble Falls, Texas. "We've taught them to check the price."
The children look at newspaper ads before they shop, Faucett says, and take pride in finding bargains.
The Faucetts' daughter, Gretchen Fitzpatrick, says her parents aren't rushed when they visit her in Pensacola, Fla., and take her three kids ages 5, 7, and 9 shopping. "I wouldn't have the same patience," she says. If they are given $5 to spend and something is $5.05, Mrs. Fitzpatrick says she usually throws in the extra nickel.
With their grandfather, however, "they have to stick to it." Grandpa feels he can be an absolutist. "We can go in and be firm and then leave town," he says.
Fitzpatrick says her father also has more time to be creative. For instance, before the family went to Walt Disney World a few years ago, Faucett designed a trivia contest to give the grandchildren a chance to win spending money. For each question they answered correctly they earned $1. Each child racked up about $20.
The Faucetts also work with another set of grandchildren in Collierville, Tenn., urging them to set goals and save for them. Eleven-year-old Drake has already identified the (real) pick-up truck of his dreams. Eight-year-old Bryan is socking away money for a Ford Mustang, says Greta Smith, the boys' mother.
The Faucetts got a sense that their lessons were sinking in during a recent trip to the Alamo. Mrs. Faucett gave Bryan two dimes to throw in a wishing well. He tossed one in the water and stashed the other in his pocket.
Joyce and Donald Oberfeld's grandchildren get a feel for money at the tender age of three.
That's when the couple puts 300 pennies in a jar and walks their grandchild to Young Americans Bank in Denver to open a savings account. Sometimes, older siblings who once participated in the same ritual tag along. "It becomes a family affair," says Mrs. Oberfeld.
Mr. Oberfeld and his wife feel strongly about helping their five grandchildren understand the value of a dollar.
"It's gotten really crazy, the way people spend money like there's no end to it," says Mrs. Oberfeld.
To promote an interest in investing, the Oberfelds showed their oldest granddaughter how to track her mutual funds online in 2000, when the child was eight.
Many experts suggest buying companies that kids can understand. The Oberfelds did a little "research" with their grandchildren, taking field trips to compare various fast-food restaurants.
For the Oberfelds, teaching their grandchildren about charity also is important. They were concerned, for example, that the family had become carried away with gifts at Hannukah. So beginning about five years ago, they established that each child would choose one of his or her gifts to give to someone in need.
Also, when the family comes to dinner on Friday nights, they are expected to put money in a "charity box." When the container is full, the grandkids take the money and choose where to donate it. It usually ends up as a Sunday School offering.
Jackie Avery believes in earning one's own way. So rather than offering to bankroll her 11-year-old granddaughter Alicia's dream of getting a horse, she suggested they go into business together to raise the money.
Mrs. Avery loved to comb thrift shops in her hometown of Denver, alone or with Alicia. The two came up with the idea of cleaning and dressing up used stuffed toys and other collectibles for resale. They rented a booth in a flea market and sold spruced-up teddy bears and knickknacks under an enterprise called The Grands.
For two years, the pair logged hundreds of hours collecting, setting up displays, and selling their wares. After raising an initial $200 from a garage sale, the duo began pulling in about $300 a month.
That more than covered the $125 monthly booth rental, fabric, and other expenses. The experience gave Avery a chance to explain taxes, overhead, and budgeting to Alicia.
The two divided the profits. Some paid for the expenses surrounding care of Alicia's horse, which she was able to buy about three years later. A portion went into savings and the pair also donated about 2 percent to a local women's shelter.
Alicia still manages her money well, her grandmother says. Now a junior at Fort Lewis College in Durango, Colo., the chemistry major works to pay for her tuition and room and board. She has no loans.
"She was always trying to make me an entrepreneur," Alicia says of her grandmother.
Alicia's mother, Diana Joy, says the business had another positive effect.
"If I had tried to engage her in it, it would have been more of a chore," Ms. Joy says. "With grandma, it was a special time for them together."