All this while, when you thought books or gadgets were the best things to gift your child, here’s an idea which may not have crossed your mind yet. Nothing can be as precious as financial literacy.
We have grown up hearing that the best things in life are free. Laughter, hugs, smiles, sleep, family time and good memories. While these cherished moments don’t cost a penny and are invaluable, living in the real world requires something more. We need money the moment we step out of our homes.
The good news is that kids today understand this very well, which leaves parents with lesser work compared to the parents a generation ago. Thanks to internet and endless access to information, teens are passionate about earning, saving and leading a quality life. As a parent, all we need to do is introduce them to the best app for finances and guide their path towards gaining financial wisdom. Kids are highly receptive to what they see around them therefore, you these smart strategies that technology has made possible, would help them be money smart.
Six Ways to teach kids about Investing & Saving.
- Begin with basics
Starting with terms like stocks, bonds and investments would be a bit difficult for the kids to grasp when they are just starting. On the outset, getting them familiar with household expenses like groceries, electricity and rent etc. would be a good starting point. Showing them the fixed and variable household expenses and seeking their opinion whether there is any scope of bringing the monthly cost down would get them involved.
- Give them exposure to debts
Parents should not shy away from disclosing their debts to the kids, if any. Teenagers most likely, are already aware of credit cards for teens that everyone’s been talking about. Debt therefore is not a strange term for them. As a parent, educating them about the pros and cons of credit cards would help them prepare for the time when they also have one of their own. Helping the teenagers understand the importance of using credit card responsibly will help them avoid many financial pitfalls related to credit cards. A credit card debt can be dangerous and regrettable, hence, taking them through the benefits of having one, when used effectively is important. Parents might want to introduce them to the children’s card by muvin, which is designed appropriately for young adults.
- Talk about the power of saving.
Most teens and young adults have a desire to look for quick-get-rich opportunities, thanks to the internet influencers. As a parent, we have a dominant role to play here and teach our children that saving money is the only way to build assets. Taking some baby steps with small sums of money when starting out is a great way to inculcate the saving habit. Just like we introduced piggy banks to them when they were younger, encouraging them to start with a savings account would be the natural second step. We can make the process fun by throwing a challenge at them to reach a goal of having a certain amount with a deadline and rewarding them when achieved with something small. That’s definitely a way to motivate them and foster a saving habit.
- Explain the power of investing
Why is investing so powerful? When children are on their way to becoming adults, it’s the perfect time to have a ‘real talk’ and explain to them the power of investing. There is a high possibility their reaction may not be friendly at first which is understandable. There are so many ‘exciting’ ways of spending money these days that a conversation on investing can be unexciting. Simply asking them questions like how it would feel to watch their money double would get them talking. Parents can teach the kids the power of effectively investing and growing money alongside introducing the different investment options. And yes showing them our investment portfolio as well, when the time is right.
- Educate them on stocks
Teaching children the workings of the stock market is not a cakewalk. There will be tons of questions coupled with fair amount of hesitancy. A clever way of upskilling them would be leveraging computer games and making the process enjoyable. Opportunely, today there are many websites available with the stock market games which will help the child have a real-life experience. Online stock market games are a sure shot way of getting the child take interest and help enhance their abilities.
- Open a savings account.
Eventually, we have to begin from here. Opening a savings account and then getting to practice real investments must happen at some point. Choosing a plan depending on the child’s goal and aspirations of getting somewhere in life would help in identifying the appropriate investment plan for them.
One Last Thought:
It’s never too early to start. If you are waiting for the right time, it is NOW. The earlier your child gets financial literacy, the better it is. Being financially smart is the only way to having a secure future and living a stress-free life.
Muvin understands the concerns of a protective parent. With the help of family-friendly controls, you can watch your child’s actions in real-time and assist them with your expertise. The junior bank account online is everything your child needs right now.
