Some parents have a philosophy that they’ll wait until their kids are fully grown before they start teaching them about money. Kids are smarter than we give them credit for, and the earlier you get them started with good habits around investing, the more likely they’ll be able to adopt those habits for their whole life.
Kids Are So Much Smarter Than We Think
It’s true that kids are so much smarter than we think. They are more likely to listen to their parents than adults, and they are more likely to take advice from their parents than adults. And when you look at the stock market today, it is clear that following the advice of your parents is a winning strategy for getting rich!
Educate Your Kids About Money And What It Can Do
To start, educate your kids about money. Talk to them about what it means to invest and why it’s so important to learn how to save. Explain the difference between needs and wants and show them how they can use money in a way that will make them more successful later in life. Finally, teach your kids how to make their savings grow by investing in low-risk investments like stocks or bonds when they are old enough (and well past the age of 16).
The earlier you get them started, the more likely they will be to adopt good habits. The earlier you start, the more time they have to learn from their mistakes. The earlier you start, the more likely they will be to develop good habits.
For you to use the investing app for kids, it has to be simple. There should be a good user interface and a good learning curve. The app should also have good customer support and a ton of reviews.
Focus On A Bond Fund Or Some Other Conservative Option
If you want to start your kids off with investing, focus on a bond fund or some other conservative option. Bonds are less risky than stocks and are therefore a good place to start for kids who want to learn about the market without worrying about their money going into the red. Bond returns are also less volatile than stock returns, so if your child is worried about losing money in his or her first foray into investing, bonds can be an excellent choice.
Realize That They Have Time On Their Side
Kids have time on their side. They can afford to take risks and make mistakes, because they have years ahead of them where they will learn from their mistakes.
They also don’t need to worry about retirement like adults do, so there’s no urgency for them to invest early and often.
In fact, it’s fine if they start investing when they’re older than 18—or even when they’re in their 30s or 40s—but the earlier you start investing with your kids, the more time those investments have to grow into something big.
Conclusion
Teaching your kid with money isn’t simple, but it is surely worth it. You have a lot of power over how much they learn and what they take away from their investing experiences; therefore, if you want them to form healthy habits as opposed to harmful ones, you should start early! Once you show them the proper technique to perform these tasks, they can become pretty intelligent.