[youtube https://www.youtube.com/watch?v=hlZuDj9tOks]As parents, it’s important to help lay a solid foundation for our children, especially when it comes to finances. While you can’t avoid challenges in your child’s life, you can significantly lessen financial stress if you teach them how money works while they are young.
This holiday season, consider several unique financial gifts to your children that will have both tangible and educational value. Here are some examples:
- Find your child’s favorite toys, clothing brands, or tech toys, then buy them a share of that company’s stock. The key here is less about getting the best available stocks on the market, but rather finding the stock of a company that they can relate to. Then, show your child how to follow that company over time. When emotions and finances meet, lessons are learned and remembered. Try to get a physical copy of that company’s stock certificate if possible. But if you’d rather make it simpler and more efficient, consider using an app that allows you to buy fractional shares of stocks so that you can help your child learn a lesson with smaller amounts of money.
- Other ways to help your child learn important savings lessons? How about helping them start an IRA, or better yet a 529 College Savings plan? Even the good, old-fashioned U.S. Savings Bond is a useful savings vehicle and teaching tool. While your child will likely earn money over time with these methods, the primary goal here is a financial education. Financial gain, while important, is secondary at this age.
If these ideas sound boring and unpractical, consider this: investments don’t wear out, don’t need batteries, and have the potential to change your life. Additionally, the lessons learned can help raise a financially savvy child who will learn how money works while s/he is still forming personal habits and tendencies.