March 28, 2024

Signing out of account, Standby…
When you start your first job or exit college, you probably start contributing to a 401(k) or a similar retirement account. But, as the best advice goes, it’s never too…
When you start your first job or exit college, you probably start contributing to a 401(k) or a similar retirement account. But, as the best advice goes, it’s never too early to start investing.
But now you have kids, and you wonder: what if you extended that advice to your children, even though they don’t necessarily earn money yet? Well, you can get your kids started with investing before they earn any real income. This could pay dividends in the future (both philosophically and literally), as it may set your children up to be wise stewards of their money in adulthood.
But how do you do it? It turns out that there are several ways to get your kid started by investing at the earliest opportunity.
All kids love to play, and schools use games to impart important information to children’s minds. So why not do the same thing when it comes to investing?
For example, you can start with a basic computer or mobile device games that teach your kids how to add and subtract money, or you can play pretend shopping with real coins. This is great for training their basic arithmetic and getting them used to adding and deducting money.
As your children get older, consider presenting them with games that require them to make investments. Again, computer or smartphone games are excellent for this. But you can also play the many money games that are suitable for kids:
Alternatively, you can also come up with your own games with money. For instance:
While playing games can be fun, you should also teach your children the importance of saving and not spending as much money. Of course, you can do so with some of the in-person games mentioned above, but you can also teach them this lesson by tying it into the things they want, like toys or movies.
Say your child wants a new action figure or another toy from the store. However, they don’t have enough money saved up from birthdays or other sources to buy it.
Rather than buying your child the toy outright, you can teach them the importance of saving by telling them they can buy it as soon as they save enough money. You can then give them a small sum each week to see their savings grow.
This provides two benefits at the same time – it teaches your children about saving and investing while also training them to be more patient.
If the item in question is particularly expensive, like a new video game console, you can meet your child in the middle by offering to pay for half of it if they can save up half the necessary money. The specifics are up to you.
The bottom line is this: if you teach your children about saving, they’ll be better able to understand the importance and usefulness of investing since it’s more of an abstract concept to master.
Since investing can be a bit tough for many kids to grasp, especially in the younger years, consider using illustrations to show different investing principles in action.
In college courses, we teach adults using graphs and tables to tell stories about money and investment principles. Unfortunately, these mediums are still a little complex for kids. So instead, you can create simple pictures, draw cartoon characters, and make up stories where the characters are involved in investing situations.
If you’re not much of an artist, you can find children’s books that teach basic financial concepts – including the concepts inherent to investing! – to kids of all ages. In addition, colorful illustrations can significantly divert your child’s interests toward investing and away from overspending their money.
Practice makes perfect, and your child will have a tough time getting used to investing at an early age if they don’t have any money.
Therefore, the best thing you can do to get your kid started with investing early is to give them an allowance. For example, say you have a list of chores your children must complete every day. Then, at the end of the week, give each child who completes their chores a small allowance (you can pay in cash, make a bank transfer, or use text-to-pay with GetWeave to get them their allowance each week).
Don’t stop there, though. Advise each child to invest that money by giving it back to you. Then, at the end of another week, give them the money back plus interest. It shows your kids how investing works and the benefits of using investing to build up money more quickly than they could otherwise.
With especially smart kids, you can combine some of these exercises. For instance, you can tell your children they must save up for an expensive toy. Then you can give them an allowance and offer the investment opportunity mentioned above.
If your child really grasps investment, they might reinvest their money into “Parent Bank” and make money more quickly to buy the toy they want. Use a Google Docs spreadsheet to track their growing savings with them.
Around 13 or 14, your child might qualify for a junior bank account. Kids’ bank accounts aren’t as flexible as those for adults, and they don’t come with as many perks. But many savings accounts for kids come with decent interest rates and allow children or teens to grow their savings over time.
By starting your child off with a bank account ASAP, you familiarize them with financial ideas and make them more comfortable with investing, understanding inflation, and more.
Technically, a savings account at a local bank is the first type of investment you can make as a person. Plus, starting a savings account could help your child contribute to their college fund or other significant expenses as they get older.
As your kids grow up, guide them to make their first investments in the stock market. They have to be 18 to trade by themselves, but when they reach that age, you can provide advice like:
Starting your children off with a stable investment experience is key to getting them to enjoy it and continue investing long after they leave home. Show them smart blogs on finances, give them new educational resources, and continue guiding them on a path to financial self-sufficiency.
Ultimately, getting your children started with investing involves developing their interest in money and teaching them good financial habits at an early age. If you can do both, odds are your kids will become savvy and successful investors in adulthood. It’s just another way to set them up for success as their parents.
The post How To Get Your Kid Started With Investing: 6 Tips for Parents appeared first on Due.
‘Corporate America Is Killing Us.’ Employees Share Gut-Wrenching Stories That Reveal a Compassion Crisis.
Planning a Company Offsite? Here’s How to Ensure It’s Inclusive.
The ‘Lipstick Effect’ Exposes a Surprising Truth About Our Priorities in a Recession. Here’s How Businesses Can Cash In.
‘I’m Not Going to Change the World by Myself, But I Can Start’: How UOMA Beauty’s Founder Merges Activism and Makeup to Fight for Change
How to Overcome Adversity and Persevere as an Entrepreneur
Peek Inside the Bentley Residences, Which Feature an Elevator That Will Drop Your Car Into Your Living Room
How to Start an Urban Air Franchise in 2022
Christopher Tompkins
The Staff of Entrepreneur Media, Inc.
R.L. Adams
Subscribe to our Newsletter
The latest news, articles, and resources sent to your inbox.
I understand that the data I am submitting will be used to provide me with the above-described products and/or services and communications in connection therewith.
Read our privacy policy for more information.
Copyright © 2022 Entrepreneur Media, Inc. All rights reserved.

Entrepreneur® and its related marks are registered trademarks of Entrepreneur Media Inc.
Successfully copied link

source

About Author

Leave a Reply