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.

A 529 or Coverdell college savings account can be a great way to show kids the concepts of investing.

• Have your kids sit with you when you make regular plan investments, or when you look at how the account is doing. Explain why you chose your investments and how they’re designed to meet your needs.

• Show how you can be more aggressive now, when they are younger, and more conservative with that money as they get closer to the time you need to withdraw it for college. The idea of investment risk is a good one for kids to learn. (See: The risk of avoiding risk)
  

Have periodic investment meetings

One of the best ways to see growth is by checking in with your investments at regular intervals and discussing any progress.

Consider a monthly or quarterly family meeting to go over everything and provide a teaching moment:

• Talk about how much you’ve put toward each goal since your last meeting.

• Discuss the amount of earnings or interest (or losses) those investments have seen.

• If there’s a reason your investments have lost value, you can discuss that as well.