Investing in Kids

How to teach your kids about investing

When you start teaching your kids about money, don’t stop at proper budgeting, compound interest rates and the ins and outs of credit. You should also start schooling them on the importance of investing. Although the markets have been volatile recently, putting your money to work in the markets has historically been shown to be key in not just keeping up with taxes and inflation but staying ahead of them. Here some tips to get your kids started.

  • Start Small. As soon as you’re giving your kids an allowance, you should be teaching them about saving. Have them save a small portion of each payday to see how savings works. Once they have grasped that concept, you’ll move on to investing, and how investing builds their savings.
  • Use Tech. For older kids, there are a variety of games and apps that can help them learn investing. USA Today suggests the Stock Market Game, which lets kids build an investment portfolio and then track it. As for a more concrete approach, the BusyKid app lets kids invest the money they earn for doing chores.
  • Seek Out Moments. Whenever possible, use real world examples to teach your kids about investing. Maybe you explain your 401(k) to them and how sometimes you lose money, but sometimes you gain. Perhaps you can use a product they’re interested in or a store they like to explain about owning shares in a publicly traded company. Anytime you check your investments, bring them in on it so they see how it works in real life.
  • Remember The Big Picture. Investing is all about the long-term, big picture. So make sure above all else, your kids understand that. Explain to them how even when the market is down, it comes back up again. Make sure they understand that patience is rewarded with investing.
  • Chris O'Shea

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