Teaching kids about investing is an important step in helping them to understand the value of money, the importance of saving, and the potential for growth. Investing can be a complex and intimidating topic for adults, but it is important to start teaching children about it at a young age. Doing this will help them to develop a sense of financial literacy and to understand the importance of making smart financial decisions.
With the right approach and resources, conversations about money management can be simple and fun.
Below are a few tips to help you teach your kids about investing
1. Start Early
The earlier you start teaching kids about investing, the better. Not only will they be more likely to make sound financial decisions in the future, but they will also be more prepared to take advantage of long-term investments. Have some birthday money sitting in a piggy bank? Put it to work and help them see how it grows.
Some example ideas to put the piggy bank to work are teaching kids investing by making a business plan and executing a lemonade stand or selling bracelets or collector cards. You can also open an investing account and teach them to learn about index funds. The goal is to meet them on their level to see how investing in options that have the potential to grow.
2. Compound Interest
A great starting point is to learn about compound interest. Not only is this a financial lesson, but also encompasses crucial life lessons about patience, strategy, and delayed gratification. Money Geek has a great printable activity to help teach this concept to kids.
