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How to Teach Your Children About Investing, Simple Steps

Learning to invest at an earlier age helps the investors to act more professionally in adulthood. Besides, people should know how to manage their costs and incomes to lead a better life. So it is recommended to teach children how to invest. Experts believe that childhood is not too early to learn investing. Also, learning about investing at a young age has many benefits for them, even for their parents. In this article, some practical steps for teaching investment to children are explained.

 

1. Involve them in your financial discussions

Choose a suitable time when your child is home and aware. Start talking about the financial issues with other people at home, be careful to talk about things which are useful for your children, not some things that may frighten them, such as inflation and rising prices. At the end of your discussion ask your children if they have any questions or if they have any questions or if they enjoyed a particular part of your financial discussion.

 

2. Start by saving money

Even as an adult, it is recommended to first learn how to save money and then try to invest your money. Saving money will help your children a lot at a younger age. When you teach your children to save money, they understand the importance of money and how they should spend it.

Set aside some money as weekly or monthly pocket money, tell your children to divide their money into 3 parts. You can put 3 bowls in front of them, and put 10% of their money in a savings bowl and then 10% in the donation bowl and then put the last 80% of their money in the expenses bowl.

You can add another bowl as they grow and mark that bowl for investment. Tell them to only use their expenses bowl for their needs and try not to use other bowls.

 

3. Play investing games

Play investing games with your kids such as monopoly and during the game teach them about investing and how to increase their money. There are lots of financial games for kids. Find the one that your children may like the most and use it as an educational tool. Children can learn much better during playing games.

 

4. Talk about stocks and bonds in front of them

It is good for children to know about investing in stocks. As their parents, you should tell them how these markets work and what are their differences, and how they can get a profit out of stocks and bonds markets. Be careful to keep your explanation as simple and interesting as possible.

 

5. Talk about your own investing stocks

Tell your children about your stocks and tell them why you have invested in those companies Talk about companies they might like, such as tech companies or sports services companies. Try to have an interesting conversation with your children.

 

6. Help your children to invest

After a while, you can help your children to choose a company stock or if it is possible for you, help them to choose more. And then open an account for them and buy their favorite stocks. Children will learn more with real money. Be gentle with them and educate them about fluctuation and other things which may happen in the stock market.

 

7. Teach them about compound interest

Tell them how their little money can grow to a large amount and why compound interest is important. Besides, tell them what they can do with their little money in the future if they invest their money properly.

 

8. Increase your financial knowledge

Before teaching something you should have enough knowledge about that issue. Investing and financial issues need more investigation and spending time. Also, you should increase your knowledge of how to communicate with your children, especially how to have a good and interesting conversation about financial issues.

 

The bottom line

Teaching children about investing is a way for them to gain wealth in their adulthood, it is proved that the parents who thought their children about investing in childhood have more successful children in adulthood. Experts believe that any little investment in childhood can become a good fortune in adulthood due to the compound interest effect. Therefore, consider teaching children about investing as an important issue and start teaching investing to your children as soon as possible.

 

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