Colorizing black and white photos is a nuanced and skilled art entirely by itself, but understanding the basics of it gives you some good practice with editing techniques and another skill to throw in your bag of tricks. This helpful video will show you how to do just that.
Colorizing an older photo is a great way to breathe some new life into it and can make for a great family gift should you so choose. Coming to you from Spoon Graphics, this tutorial walks you through the process. Before you begin adding color, it's important to make sure the image is truly black and white (as opposed to sepia or something similar) and to make any exposure adjustments you desire (old images, particularly scans of older prints, might be a bit lacking in contrast). From there, it essentially amounts to adding solid color layers and using the soft light blending mode to paint on the appropriate colors. Notice, however, how he adds extra colors at very low opacity across the image. This essentially provides a little variation and increases the realism of the final product by preventing it from looking like it was just painted over. Give it a try for yourself!