Have you read my blog on compounding? If so, you know that investing early is the key to building wealth. But how do you actually teach kids about finance and investing? Wouldn’t they rather be watching TikTok, Snapchatting, or whatever else kids do?
Maybe. But if you approach investing in a fun, engaging way, you might find yourself with a future Warren Buffett on your hands (he started investing when he was 10 years old, by the way).
Here are some engaging ideas and resources to help you teach your kids about finance:
1. Fidelity Youth Account
2. “Stewardship for Kids” by Tony Hixon
3. Activities & Games
4. You
Let’s break these down for the benefit of your family!
1. Fidelity Youth Account
Fidelity very recently came out with an investment account meant just for teenagers (13 – 17 years old, to be exact).
This account has no trade fees and only allows the purchase and sale of stocks, ETFs, and Fidelity mutual funds. So, you don’t have to worry about them using margin and shorting you into bankruptcy. 😊 Looking at you, Robinhood!
There is no minimum investment, allows a debit card, and Fidelity provides educational resources on the simplified site. It sounds like a great way for teens to get hands-on experience with investing while being sheltered from some of the complexities.
If you are saving on your child’s behalf, I have an article on what kind of accounts to open for this as well.
2. Stewardship
I read 2 blogs by Tony Hixon on the topic of teaching kids stewardship. I hope I remember to reread these when my own daughter is a little older. They will motivate you to be more intentional in the conversations you have with your children about money. Your kids may not be enthralled by talking about money now but having these discussions when they’re young will set them up for success in the future. You can read Tony’s insights here:
3. Activities & Games
Kids learn through experiences. They need to touch things with their hands, get their brains engaged, and experience the rewards and consequences of decision making. Here are some experiences that helped expose me to money and investing as a kid:
Activities:
– Counting change
When I was little, my grandma used to dump a pile of change on the table and have me count it, sort it into $1.00 piles, etc. In addition to making me comfortable with handling money, it kept me out of trouble. 😊
– Grocery shopping
Give your older child your grocery list and a budget for what they can spend. Have them go through the grocery store and pick out the items they need and want. Give them a calculator and notepad to help them track what they are putting in the cart. It may help them realize how far a dollar does (or doesn’t) go.
– Compounding demonstration
Hand your child some money. Make it an age-appropriate amount, maybe $10. Say something like, “If you give me that $10 back to take care of, I will give you $20 a month from now.”
For the littlest tots, this demonstration can be done with food. “Here is a Hershey’s Kiss. You may eat it now, but if you wait 10 minutes to eat it, I will give you 2.”
Games:
– The Game of Life
– The Stock Exchange Game
– Monopoly
– Pay Day
My all-time favorite finance board game is Rich Farmer Poor Farmer, but it is RARE! I can only find 2 vintage copies online. My best friend and I played this game for hours.
4. You
Children learn by what is practiced not by what is preached. Click To Tweet
Demonstrate a life of balance. Let your kids hear you and your partner talking calmly and confidently about your finances. Show your children your budget and explain how it works. It will help them understand the true cost of living. Talk through your financial decision making with them. If you chose to go camping instead of Disney this year, explain to them why you made that decision. Consider inviting your older children to a meeting with your financial advisor.
Caution: Be sure to instill a sense of security and comfort in your child. While you want your child to be educated and somewhat aware of the family finances, you do NOT want them to be financially fearful. Don’t let them catch wind that you are worried about next month’s mortgage payment or that you feel paying for their birthday party will be a financial burden. Do everything you can make to finances positive and not anxiety inducing.
~
If you have children approaching college age, consider reading 9 Must-Make Money Moves for College Students.
What conversations have you had with your kids about money? Send me an email with your ideas and how those discussions went for you!
