Kids learn by watching, so it makes sense to involve kids early in your investing process. With the right approach, you can help shape how your children think about investing for goals and the future.
Here are a couple of strategies to consider:
Save and invest with your kids
Demonstrate savings to younger kids with a series of jars in a visible spot in your house. Choose a family goal together, label your jars, then add cash to each on a regular basis. Consider moving the cash to an investment account once it reaches a certain level, and then start over in the jars—perhaps with a label that states the total balance.
Match their savings, pay interest—or both:
- Get kids their own piggybanks or jars for savings, then offer to match a percentage of whatever they save. Consider paying interest on the total in the jar at regular intervals, so they can start seeing the power of compounding in action. It will become clear that the more money they save, the quicker their jar fills up.
- For teens with summer jobs, consider having them open a savings account. If you have the means, match a portion of what they save. You can begin to plant seeds that will pay off as they grow older.