We have a kids saving account for DD and I'll set the same thing up for DD2 after she is born. We have separate savings for our home loan (which is not yet a mortgage, obviously). I know DP has suggested in the past we'd be better off using DD's money for our home loan accounts, but since it's only the money we deposit (small amounts) every month, and it's set up on some bonus structure as a kids account, I don't think it's that worthwhile yet.
I don't have any advice on what you've gotten from grandparents, other than that perhaps be open with them about your plans, since this hasn't happened with us.
But on teaching them to manage money, DS1 is definitely old enough (and smart enough!) to start to learn to handle a small amount himself. DD has two jobs that she gets a small amount of pocket money for - she cleans out the chicken coop twice a week and puts the rubbish bins out (and back in) on bin night. She gets 50c each time. She's also asked to now give the chickens clean water every morning, in return for 20c. She takes all of her pocket money and stores it in a money box. When we go to something like the show or her school fete or when the school book club forms come around, she can then get out some of her own money to buy something. She is already understanding the concept of when you save up, you can get something better, as opposed to if you take small amounts out to use at school canteen, you use it all up with not much to show. Either way, she is free to do with it as she chooses. We talk to her about what might be good value, or good saving, but leave the end choice to her. She had nearly $30 at the Easter Show this year! She talks about saving up next year so that she can buy something for her little friend too, because she's seen this modelled by his big sisters.
I really like her attitude to pocket money so far. She suggests ways to help out (above and beyond expected chores, like tidying, setting the table, etc, for which she is not paid) and earn money and then is learning ways to manage that money once it comes in. The big money issues can wait until she is older IMO. This is the foundation.
In regards to managing smaller amounts for the children to learn check out Money Savvy Kids - you can google it. They sell piggy banks with four slots....each for a different purpose - Spend, Save, Invest & Donate - a great idea for teaching basic managment skills and decision making.
DS#1 and DS#2 are at the age where they like seeing the money building up in their accounts and we are hoping this will instill good savings habits in them. At the moment they haven't got much but when it starts to build up in to the thousands we are sure that they are going to be very excited and motivated ! So at this stage thats what we are happy with. Maybe when they are older the money will be invested...
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