It sure isn’t getting any cheaper out there and if you’re dreading the prospect of sending one or more of your children to college, or worrying about how they’ll ever buy a house, then you need to take some positive action!
Don’t forget, you’re in the business of raising adults here and adults are supposed to be responsible, to earn their own money and to look after themselves. This doesn’t start the day they turn 18, though, so you can do everyone a favour by getting them to start looking after their finances early on.
Get them into precious metals
There’s something about shiny metals that we all, and especially kids, love. What’s even better is that they grow in value over the years. No-one’s saying you have to spend thousands of dollars on gold, though. You can start off quite easily by buying some silver bullion from Golden Eagle Coin; one-ounce bars start at $15 or so, so it’s not going to break the bank.
By investing in a physical commodity, you’re choosing a good way to start as the children can see and feel the metal, which is a lot more understandable than some mysterious mutual fund.
Start talking about money and finance early
If your children are old enough to count and understand the concept of money and buying things, then they’re old enough to learn about finance and investing. If you start them off with their own stock portfolios you’ll be surprised how interested they become in it, especially if their stocks mean they own part of Disney or Apple.
Kids love the idea of their money working for them
The idea of their money, or their companies and metals working hard for them throughout the night, during mealtimes and even when they’re doing their homework is irresistible! Many children check their savings account balances and their stocks every day as a result!
Help them with the research
This brings in the internet, which is also irresistible to children. They can look up their shares, or explore various companies to see how their stocks are doing before deciding whether to invest or not. Starting off with companies that make things, then moving on to more abstract vehicles and products is the way to go.
Impress upon them that it’s a long-term thing
A week can feel like forever when you’re only small, so a year and definitely a decade will seem like forever-forever (a widely-recognised unit of time). You can show them how time works to their advantage, though, by playing around on a compound interest calculator with them. If they can see that their humble $100 will be worth almost $1,000 after 13 years if they carry on making small deposits and leave the money where it is, they’ll be encouraged.
Help them to develop good habits
Don’t forget, your children’s brains are developing and they’re very impressionable, so make sure you make the right impression! Teach them patience and diligence. If they learn how to check their receipts and bank statements regularly, they could spot costly errors, for example. Looking out for buy-one-get-one-free offers and depositing the savings into their account is another great habit to have. The longer that money is in there working for them, the more they’ll have waiting for them for college, or for their first house or even for retirement.