An Age-by-Age Guide to Teaching Kids How to Invest


By: , – Stacey L. Bradford, Family Circle
  :  6 comments   :  10,394 Views

Investing can be child’s play. A little wisdom now can lead to long-term gains for your kid’s future.

UNDER AGE 9: As soon as your child grasps the concept of a dollar, start talking about saving and delayed gratification.
1. Implement a weekly allowance. While some parents use it as a reward for completing chores around the house, it can also be a teaching tool to show that earning money is a separate and important skill, says Joline Godfrey, author ofRaising Financially Fit Kids.

2. Help kids create a simple budget. Explain the benefits of putting money aside for toys, ice cream outings or other things Mom and Dad usually pay for. 
AGES 9–12: Tweens are mature enough to appreciate the concept of using money to make money, says Godfrey.
1. Once your child has saved $100 from his allowance, take him to the bank to open a savings account. Allow him to fill out the paperwork so he gets comfortable interacting with financial institutions, says Carrie Schwab-Pomerantz, a senior vice president with Charles Schwab.
2. Consider gifting your child one share of a publicly traded company that he likes, such as Walt Disney, Microsoft or Coca-Cola (share prices range between $30 and $70), suggests Justin Fulton, a principal at Signature in Norfolk, Virginia. Show him how to monitor the stock’s price online.
AGES 13–15: Teens are ready to grasp more complex financial lessons and may ask if investing is risky. While there’s no guarantee stocks will increase in value, over the past 10 years the stock market as a whole has appreciated 2%; in the past 20 years, 4%. Investing is also the best way to beat inflation, says Schwab-Pomerantz.
1. When your teen has at least $100 that is not earmarked for something else, open a custodial brokerage account and invest the money in an S&P 500 index fund. Buying this sort of mutual fund limits risk (you’re investing in a diversified basket of holdings). Review the monthly account statement with your teen.
Click here for more tips on how to teach kids to invest from Family Circle.
More from Family Circle:Have you taught your kids to invest?

Click here to to redeem your SparkPoints
  You will earn 5 SparkPoints
See More: family circle,
Got a story idea? Give us a shout!
NEXT ENTRY >   Helping Your Kids Cope with Back-to-School Exhaustion


  • 6
    Excellent advice! If this isn't being taught in parenting classes, it ought to be. Perhaps we could dig ourselves out from under the burden of personal debt if we did a better job teaching the next generation to be financially responsible. - 9/26/2012   8:41:47 AM
  • 5
    Always include a lesson (or 2) on "needs" versus "wants". It has helped end many a conflict as they grow up when that is put on the table.
    As parents, we commit to caring for their NEEDS. They have to earn / work for their WANTS. - 9/26/2012   3:21:36 AM
  • MIZINFO2003
    good ideas! - 9/26/2012   2:14:13 AM
  • 3
    I always complained about how miserly my dad was. But he started investing early, and has retired quite comfortably....far from his penny-pinching years. It has helped me realize that I don't want to grow old just to be *without*; I have to plan for my future and not live in the present.

    And, please let me be so far-sighted to invest in the next Apple, as my dad did several years ago.
    That said, my Youngest spotted a coin at a coin show, paid $25 for it, and it has an error, and may be worth as much as $200. I told him to take the greater portion of whatever profit he makes, and reinvest it in coins---he has a knack for that. I hope he takes after his Grandpa. :) - 9/26/2012   12:00:33 AM
  • 2
    Kids will be much better off the sooner they learn these things - 9/25/2012   8:57:35 PM
  • 1
    Simple and easy to understand and implement - 9/25/2012   7:37:19 PM

Please Log In To Leave A Comment:    Log in now ›


x Lose 10 Pounds by August 5! Sign up with Email Sign up with Facebook
By clicking one of the above buttons, you're indicating that you have read and agree to SparkPeople's Terms & Conditions and Privacy Policy and that you're at least 18 years of age.