In a world where financial literacy is increasingly essential, teaching children about finances from a young age can help set them up for a more secure future. This guide explores practical ways to introduce your children to investing and other basic financial principles, using modern, digital tools designed specifically for young learners.
Introduce Financial Basics Early
Kickstart your child’s financial education by teaching them about the importance of saving money, how compound interest works, and the concepts of risk versus reward. These early lessons are the building blocks for understanding more complex financial topics in the future.
Select Kid-Friendly Investment Apps
As technology continues to evolve, so does the landscape of financial education for young learners. Apps like Greenlight, Stockpile, and Venmo are making it easier than ever for kids and teens to learn about investing, saving, managing money responsibly, and more.
- Greenlight: Ideal for kids ages 8 to 18, this app combines a debit card with other powerful features, including real-time transaction alerts, parental controls, and educational games. With Greenlight, you can also set savings goals with interest incentives, complete assigned chores and receive payouts, and invest in fractional shares, all under parental supervision. Note the monthly fee, which starts at $5.99.
- Stockpile: This app provides an easy way for families to teach kids and teens about investing. It allows users to buy fractional shares of stocks and ETFs, with a focus on hands-on experience, making it a particularly useful choice for those new to investing. Stockpile charges a monthly fee of $4.95.
- Venmo Teen Account: For teenagers seeking more independence, Venmo’s Teen Account offers a digital wallet with a teen debit card, spending limits, and transaction tracking. It’s a simple solution for older kids who need a more adult-like banking experience but still require some level of parental control.
These apps, and others, offer unique tools that cater to various developmental stages and learning needs. Because they each bring something different to the table, it’s important to do thorough research before deciding which app best suits your child’s needs and your family’s financial goals.
Engage Children with Hands-On Investment Activities
As you teach your children about finances, encourage them to take an active role. Let them choose investments in companies they know and like, such as Disney or Apple. This hands-on approach makes investing more tangible and interesting.
Promote Long-Term Thinking
Patience is an important value to teach your children as they begin learning about long-term planning and investing. Show your children how their investments can grow over time, and discuss the benefits of consistency and financial discipline. This can help them develop a long-term perspective on investments.
Conclusion
Educating your children about finances and investing is more than just teaching them to save; it’s about equipping them with lifelong skills that pave the way for future financial independence. By incorporating the right digital tools into their learning process, you make these lessons engaging and relevant.
Begin their financial education early, integrate hands-on investment activities that spark their interest, and emphasize the importance of patience. These steps not only build financial literacy but also foster a sense of responsibility and maturity, helping prepare them for more complex financial challenges later in life.
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Cory Reamer,
is an Advisor at The Welch Group, LLC, specializing in providing Fee-Only investment management and financial advice to families throughout the United States. Cory graduated as a student-athlete with a degree in Finance from The University of Alabama and is passionate about helping others on their financial journey. For more information, visit The Welch Group. Consult your financial advisor before acting on comments in this article.
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