Let me just start out by saying, I, myself just recently learned about investments. Me being in my 30’s, I never really understood the stock market, bonds, investments, or financial planning. I never had finances to finance. But now that I have two kids, I thought I should invest not only in my future but theirs.
So, where do you begin?
Be Sure to Ask Questions
I met with a financial advisor to explain the ins and outs of stocks and bonds. And then I realized that’s the answer, explain the nuts and bolts of investing to my children, and maybe even have them start looking into what things they like (e.g., toys, games, actual costs of things). Let’s face it, as kids we never learned the actual cost of certain things. It wasn’t until adulthood that I realized how expensive it is just to have lights on in a house.
But why is investing a good idea? For me, it helps meet my financial goals. Even though I am years away from retiring, I still need to think about my future and my kids’ future, i.e. cars, college. So, I decided to introduce the concept of financial goals in ways that my kids could relate to. I introduced the concept of investing and growing their money so they have a better chance of reaching that big goal.
Learn the Basics Together
My kids have been doing chores/odd jobs for over a year now and they receive money each week. When we head to the store, I remind them to bring their money so they can buy a candy bar or random toy they think they need! This has the added benefit of teaching kids the value of a dollar; it tends to have greater meaning. It makes them think about if they really “need” that item.
Together, the kids and I learned this investment thing. Together we learned the importance of researching a stock so we better understand the associated risk. After a lot of consideration, together we picked and now follow stocks from our favorite companies and talk about how we can “invest” money by buying the company’s stock to own their very own piece. What kid wouldn’t love the idea of owning part of Disney? Together, we follow the stock price online each day and track its progress. I explained that if the company makes money, so do they. But if the company loses money, they do, too.
Don’t Forget to Set Goals
Giving my kids a reason to set a financial goal is important. This gives them an incentive and a concrete reason to save. My kids love the idea of doing something as grown-up as investing. We love doing it together. And if they see how much money can grow over time, they’re usually excited to save.
I enjoy teaching my children life skills that are necessary! It’s up to us as parents to teach our children money skills to build a healthy financial future. How and why it’s important to invest money should be right at the top. Getting my kids interested in investing early on by taking the time to explain concepts like stocks, savings, returns, risks and rewards will only help strengthen their financial skills for a lifetime. Thus, in return has helped me invest in our future.
Babies & Toddlers
In addition to the time I devote to being a mom, I also work full-time outside the home, which means my day is hardly ever as simple as nine to five. With an all-too-established schedule, as soon as I walk through the door, my day doesn’t end, but rather just begins. It’s a balancing act, especially with two children, but being a mom is one full-time job that I never want to quit!