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Started By
Message
For those with kids, how are you teaching them about finances?
Posted on 1/15/23 at 10:17 am
Posted on 1/15/23 at 10:17 am
We have made time value of money a priority learning since our kids could understand money.
As they got older, living below means and role of investing were themes, and we would talk about the life decisions we were making and, where financial-related, the financial reasoning (eg, refinancing for lower interest rates) behind them. From there, we would go deeper into budgeting, credit, and risk and return/portfolio a bit.
But, it was always indirect (ie, not hands on for them). Wondering if we missed a trick. One is in HS and showing quite a bit of interest in investing. Any tips and tricks on good hands-on ways to teach your kids? Not best investment environment, but perhaps that is exactly a good time?
Eager to hear MT's thoughts and ideas.
As they got older, living below means and role of investing were themes, and we would talk about the life decisions we were making and, where financial-related, the financial reasoning (eg, refinancing for lower interest rates) behind them. From there, we would go deeper into budgeting, credit, and risk and return/portfolio a bit.
But, it was always indirect (ie, not hands on for them). Wondering if we missed a trick. One is in HS and showing quite a bit of interest in investing. Any tips and tricks on good hands-on ways to teach your kids? Not best investment environment, but perhaps that is exactly a good time?
Eager to hear MT's thoughts and ideas.
8
Posted on 1/15/23 at 10:19 am to Turf Taint
How old?
It matters in our situation.
It matters in our situation.
Posted on 1/15/23 at 10:25 am to meansonny
I started off with buying each of my kids a stock for their first bday. When they were about 7-8, I started telling them about it and how much I paid for it compared to what it was worth.
Now that they are getting older, I tell them any money they invest in a stock of their own money, I will refund any losses they get by the time they are 18. It has definitely worked getting my kids interested.
Now that they are getting older, I tell them any money they invest in a stock of their own money, I will refund any losses they get by the time they are 18. It has definitely worked getting my kids interested.
Posted on 1/15/23 at 10:45 am to Turf Taint
We started a different direction than investing. The goal was to understand the effort/value of a dollar.
My kids are paying for their first car. Working a couple of jobs over summers. Working during the school year.
Once they buy their car, they are paying insurance, gas, and non-regular maintenance (I'm covering oil changes,brakes, and 2nd tire changes).
I've been telling them for years that they are paying their way through college. We are actually covering their first year housing and meal plans (basically, refunding the money that they paid into the car). But they have to figure out how to pay everything for their 2nd year (we live in Georgia, so the hope scholarship is available for tuition).
The best thing I learned in college was how to be poor. My parents cut me off at 18, and it was the best thing for me.
I've shown the kids time value of money.
I've shown the opposite (credit card debt).
Ive shown timetables of market indexes (picking and choosing start and stop dates to illustrate how numbers and sales people lie. But also to illustrate the benefits of consistent dollar average investing).
Unfortunately, we haven't done real time investing. Just a heavy emphasis on real time saving (both for spending money and buying/maintaining a car).
We will be having a conversation this tax season about IRAs. But like all opportunities, there are opportunities lost (it is tough to save extra at 18/19 years old with financial responsibility).
Our family (cousins, aunts, uncles, grandparents) are discussing dumping money into the IRA instead of birthday and Christmas presents. My oldest are 17 and 18 (youngest are 14 and 15).
My kids are paying for their first car. Working a couple of jobs over summers. Working during the school year.
Once they buy their car, they are paying insurance, gas, and non-regular maintenance (I'm covering oil changes,brakes, and 2nd tire changes).
I've been telling them for years that they are paying their way through college. We are actually covering their first year housing and meal plans (basically, refunding the money that they paid into the car). But they have to figure out how to pay everything for their 2nd year (we live in Georgia, so the hope scholarship is available for tuition).
The best thing I learned in college was how to be poor. My parents cut me off at 18, and it was the best thing for me.
I've shown the kids time value of money.
I've shown the opposite (credit card debt).
Ive shown timetables of market indexes (picking and choosing start and stop dates to illustrate how numbers and sales people lie. But also to illustrate the benefits of consistent dollar average investing).
Unfortunately, we haven't done real time investing. Just a heavy emphasis on real time saving (both for spending money and buying/maintaining a car).
We will be having a conversation this tax season about IRAs. But like all opportunities, there are opportunities lost (it is tough to save extra at 18/19 years old with financial responsibility).
Our family (cousins, aunts, uncles, grandparents) are discussing dumping money into the IRA instead of birthday and Christmas presents. My oldest are 17 and 18 (youngest are 14 and 15).
Posted on 1/15/23 at 12:15 pm to Turf Taint
Posted on 1/15/23 at 12:29 pm to Turf Taint
My kid earned $100 from my father in law last year by doing some chores around their house. I saved that $100 bill for him for our Disney trip and told him he could buy whatever he wanted with it. He was budgeting that $100 all around Disney the entire time we were there. "Dad, how much would I have left if I buy this or that?" is all I heard.
Then this weekend I told him to pick a stock, any stock he wanted, and I'd buy him $100 of it. He chose Tesla and when the markets open back up on Tuesday, I'm buying it for him and will hold it until he graduates high school. That will be part of his high school graduation gift from us.
Then this weekend I told him to pick a stock, any stock he wanted, and I'd buy him $100 of it. He chose Tesla and when the markets open back up on Tuesday, I'm buying it for him and will hold it until he graduates high school. That will be part of his high school graduation gift from us.
Posted on 1/15/23 at 1:21 pm to Turf Taint
Starts at 4 years old
I take a bite of their sandwich and call it a tax
I take a bite of their sandwich and call it a tax
Posted on 1/15/23 at 1:26 pm to Turf Taint
quote:
Any tips and tricks on good hands-on ways to teach your kids?
Fidelity will usually give $50 for kids to invest.
Teaching basic principles of paying yourself first (if they get a gift, put 20% into savings or investment account), patience (don’t judge account today, judge it over six months and at the end of the year), risk tolerance (safe investing and risky investing are important to know based on age, emotional ability to handle swings and more certainty/VOO v. More upside/downside like Tesla), compounding interest (showing them a compounding calculator how much investing $1000 as a teen in a Roth IRA will make based on historical returns is very powerful) and diversification (perils of Enron, Lehman, Madoff, MCI/WorldCom and how that can be overcome if you have money in more than one place). Last thing is making it fun. Get a share of Tesla or Lululemon or Netflix or Disney and let them check the price (better for younger people). A little goes a long way, though, when it comes to learning finances for anyone, even adults.
Posted on 1/15/23 at 3:47 pm to Turf Taint
I throw a 5 spot on the ground and tell them the winner gets it.
Posted on 1/15/23 at 4:27 pm to TDsngumbo
quote:
That will be part of his high school graduation gift from us.
1 share? Hope he doesn't plan to retire early
I'm kidding.
This post was edited on 1/15/23 at 4:27 pm
Posted on 1/16/23 at 2:19 pm to go ta hell ole miss
quote:
Last thing is making it fun. Get a share of Tesla or Lululemon or Netflix or Disney and let them check the price (better for younger people).
I bought a few shares of HF Sinclair (DINO) for my dinosaur obsessed 4 year old when they changed their ticker symbol in March last year. Wouldn't recommend sentimental ticker picking as an investment plan but this one has worked out pretty well so far.
Posted on 1/17/23 at 12:06 pm to LSU1018
quote:
I will refund any losses they get by the time they are 18
You're taking all of the risk out of the equation that way.
Just hope they don't figure out how to trade on margin.
Posted on 1/17/23 at 12:13 pm to Turf Taint
quote:
For those with kids, how are you teaching them about finances?
I try to impart that saving is critical for financial security, but you will not get wealthy by saving money.
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