Kids don’t know the value of money like adults do. They see it differently and see the world in a way that is different from how we see it as adults. That’s why kids have so many savings accounts. Kids can think about saving for the future in so many ways other than just putting money into a bank after school or on weekends.
If you have kids, you probably already know this. But, it doesn’t hurt to review these five tips to help your children build their investment accounts sooner rather than later.
You may be pleasantly surprised at what they can do with even a small amount of money they have set aside regularly.
Make It Part Of Everyday Life
Children are naturally curious. They want to learn and understand things, so they ask questions. You can add to their curiosity by answering their questions and then following up with more questions to get them excited about saving.
You can also add to their knowledge by giving them books and websites to pique their interest in topics such as investing, bonds and stocks. Kids will grasp concepts and ideas much faster when they have them ingrained in their daily lives.
They can explore these topics and decide for themselves if it is something they want to continue with as they grow up. Not only will this help them understand the value, but it will also help them understand why you hold certain beliefs. It will also help them understand that money is not just for buying things.
Set A Savings Goal
Choose a savings goal that is reasonable for your child’s age, experience, and interest level. For example, if your child is seven years old, a reasonable goal to start with would be $25 per month. Now, that is a low number, but that is the goal. It is something your child can see and understand.
If your child is older or younger, you can adjust that number to suit your child’s ability and interest level. For example, a child that is 10 years old can probably expect a higher goal. You can also set up a recurring donation to their savings account.
This way, you can let your child know that there is money set aside for a certain purpose, such as their education. This will help them understand that children’s investment account is a long-term investment in their future. You also want to make sure they understand they need to keep saving as much as they can.
Help Them Decide Where To Invest
Kids are very curious and naturally want to learn about things and make decisions. This is great and gives them an advantage over adults when it comes to investing. Kids are fast learners, so they can learn about investing and make good decisions very quickly.
There are many investment products available to the public, and all of them carry risks, so you want to make sure you are helping your child decide where to put their money. You want to make sure they understand the difference between investing and speculating.
Investing is when you are putting your money into a product that will hopefully return a profit. Speculating is when you are gambling on the outcome of an investment without any idea of what the outcome will be.