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Financial Planing

Kids and money


Kids and Investing, well imagine this, if you start to invest now at an early age by the time your kid graduates from college they can be financially free. Wow, you say, but it can be done since we have time at our side. We can all teach our kids to achieve financial wealth at an early age with your guidance and support. Kids and investing don’t they go together?

However, it’s a shame, the school system has failed miserably and the government has failed miserably in not teaching kids about money and investing. You can ask any teenager and they’ll tell you that the only thing they learned in school about money and investing is a basic course in economics. I would propose to change the curriculum and start a course about money and investing. The subjects covered would be the dangers of credit cards abuse, saving for retirement and how the social security system of the US may not be there for their future, stock market basics, stocks investing and the wonders of compounding. Why is this? Why are we not teaching our kids in schools? Unless you go to college or your family taught you about saving, you’re doomed. Look at our national debt. I wonder if at least half of our population learned a few things about investing if our country would be in much better shape. I want to make it clear that this probably affects not only the US, but the entire world. Then again, China has a savings rate of 35%, which is quite amazing. Let’s teach our kids please.

A basic course in money and investing should be a requirement in our schools and one cannot graduate unless they have passed at least two courses successfully. I strongly believe the sooner you teach your kids about money the better off they’ll be in the future. We need to teach them discipline and how to handle money responsibly, it’s so important for kids to invest.

A lot of parents also have failed, but we can’t blame them since they probably didn’t learn anything either. I mean you hear these horror stories about people in so much debt, why is this the case? I can assure you that if they were all taught in schools about basic money and investing, we would not have the problems we have today. I myself am guilty, my parents never taught me and I can say that 9/11 opened by eyes ever since. I made a commitment to learn all about basic investing and to teach my daughter the same.

Seeds planted early bear fruit later in life. It is important that kids grasp the concept of money early on. Where it comes from and how mommy and daddy earn it by working. Once they start to understand this easy concept they’ll begin to accept when a parent is not able to readily hand over a five dollar bill to buy the next spider man toy. We can then anticipate or somewhat predict that this child will then monitor their spending habits and perhaps become a bit frugal as a result of what he learned at an early age. Start out by doing a few of the things listed below, it’s all about kids and investing.

  • Give them a weekly allowance, since it only comes once a week they’ll learn patience and budgeting.
  • Give them a chore or job to do and reward them with a small payment. This will teach them that money isn’t free at all times and they need to work for it. They’ll value money much more.
  • Open a saving and/or checking account. This new step will be exciting for them since they’ll be acting like a grown up. This will teach them to put away money for a toy or something that they truly want to buy for Christmas instead of the parent just going out and buying it.
  • Teach them about the market, get a kids and investing group together, this site is a good start then move on to more sophisticated sites, which there are many, but start off by explaining to them the stock market a bit. If you don’t know yourself, then learn together and research a stock or two, perhaps in a company that makes a toy or make up for girls, such as Hasbro and Maybelline.

Let’s teach discipline, patience and a glimpse into the future so they can envision their lives in doing something they love for a career. Money won’t be such an important part of their life since they already have achieved financial freedom. Let’s make it a reality and start today, kids and investing can be learned by all. You can start by simply getting two piggy banks. If they are given $10.00 split it, $5.00 goes in one piggy bank and $5.00 in the other. The second one is the one we will invest in. The first $5.00 they can do whatever they want with it, buy candy, a toy or whatever else. The 2nd $5.00 doesn’t get touched ever. Here is when we will first introduce discipline to our children.

A compounding chart normally gives an idea on how fast money grows if you get started early. The power of compounding is crucial to your financial success and well as your kids.

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