BEConrad
Teaching kids about money and investing isn’t always easy, and schools often do little to help. Only a small percentage of schools require any type of financial literacy courses for graduation, and even the ones that do often give little attention to practical personal finance issues like saving for retirement or applying for a mortgage.
Parents who want their kids to grow into financially sophisticated adults will need to do a lot of the work themselves, from talking to their children about household bills and budgeting to taking them to the grocery store and showing them how to compare prices.
This financial education doesn’t have to be dull and boring. In fact, making financial lessons fun and engaging will also make them more effective. If you play your cards right, your kids might have so much fun learning about investing that they don’t realize they’re learning at all. Parents can use fun events like birthdays and the holidays to teach valuable lessons and introduce their kids to smart investing.
One great idea is to combine gifts of stocks and mutual funds with more tangible presents. Parents can buy a few shares of Disney stock in the child’s name for Christmas and combine that gift with a Disney-themed Christmas ornament or sweatshirt. Grandparents could purchase some shares in McDonalds then treat family and friends to a birthday party at the local McDonalds outlet.
Parents can also encourage the teachers at their children’s schools to run stock picking contests, host financial literacy quizzes and use other clever methods to get kids excited about money. A fun contest, complete with prizes, can do wonders to motivate children and get them excited about investing.
If parents are unable to get the cooperation of the school, they can find stock market contests and quizzes on their own. Some newspapers and investment magazines host their own contests, many aimed at young people, and the internet is filled with financial quizzes that would be perfect for curious young minds. Parents can even provide their own prizes to keep the kids interested and engaged.
It’s never too early to start teaching your kids about money and investing. Kids who learn how the stock market works now may be more engaged and willing to invest when they get old enough to start earning their own money. Kids whose parents teach them how mortgages work may be less likely to take out questionable loans like no-money down deals and reverse amortization mortgages. No matter how young your kids are, the financial lessons you teach them now can last a lifetime.
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