It can be both fun and educational for your kids.
When it comes to teaching children about money, you should get them involved early…as young as 7 or 8 years of age. Have them help with the bill paying. Expose them to preparing your tax return. And, if you have the money, set up a brokerage account for them. Let them pick a stock or two. The neat thing about this concept is it introduces children to buying the companies that make the goods we want. For children, that means companies like Mattel or Disney. A kid who loves Mustangs might buy stock in Ford. Of course, they won’t know what really goes into stock analysis before investing money, so that’s where the educational process begins.
Another resource is popular mutual funds. Many fund families offer material designed for kids; some even offer actual mutual funds aimed directly at children. One company’s prospectus is written like a children’s book, with simple explanations about mutual funds and investing. (Whether the fund is worthy of your child’s money is another matter.)
Kid Friendly Resources to Learn About Money
If you yourself aren’t that familiar with stock or mutual fund investing, learn about it, because your kids are going to ask! If you can’t give them an answer, use the question as an opportunity to learn the answers together. It’s a great way to spend time with your child, as well as improving their education and your personal finances.
A great website that can help you teach your children about money is www.jumpstartcoalition.org, sponsored by the Jump$tart Coalition, a nonprofit organization committed to helping educate school children. You can access more than 150 nonprofit organizations and sponsors via this web site. It’s ideal for schoolteachers and others who want to teach students about money or investments.
Making Financial Education a Game
For example, there’s a game on the site that teaches children about earning money and paying bills (https://www.jumpstart.org/what-we-do/support-financial-education/reality-check/). The children first select the level of education they want (high school dropout, high school degree, or college degree). Based on the level chosen, a corresponding average salary is given. Then it’s up to the child to budget and plan for expenses, which include housing, food, car, and more. The site also lets the child build a lifestyle, such as choosing the kind of house and car he or she wants, and then it shows how much money the child needs to earn to support that lifestyle and the types of careers that pay such salaries. It’s a great opportunity for children to gain insight about what we grownups have to contend with.
The site also contains the only single source for finding publications and training aids designed specifically to teach kids about money. If there is a child dear to your heart, we strongly encourage you to check out this website. Just imagine how much more financially successful we all would be if this information had been around when we were tykes.