The stock market is one of those things that everyone knows about, and the basis of what it does—a place to buy and sell shares of a company, that reduces individual risk. But when you get down into the details of how buying and selling those stocks work, what companies sell what shares, and how to invest with as little risk as possible, that’s where most people will draw a blank. This is why it’s so important to start teaching little ones about these complex subjects early so that when the time comes to make financial decisions like investing, they’re making the smartest choices possible.
So, how do you teach your kids about the stock market? If you are unsure where to start, we’ve got you covered. Read on for our recommendations!
Recommended Resource – Free Investing Printables and Labels
As hard as it is to believe, one day your little one will be all grown up and investing in companies through the stock market. They really do grow up incredibly fast, so the sooner you start teaching them these concepts, the better off they’ll be. Luckily, the team at Turbo Intuit has put together a list of fun, interactive printable activities to facilitate a necessary conversation about how the stock market works with you and your little one.
Start simple by teaching the concepts of investing vs. saving. If you give your kiddo an allowance, set up two jars labeled with saving and investing labels. Explain to them the importance of putting money away for later, and then break down the differences between saving their money and investing it. Let them know that if they put their money into the saving jar, they can retrieve money from there at any time with no penalty. If they put their money into the investing jar, and they leave it in there and don’t take any out, you’ll add a certain sum to the jar at the end of the month. Level up your investments as they get older, and soon they’ll learn the value of investing.
More Ideas on How to Teach Your Kids About the Stock Market
Another activity to get your little one thinking about finances are the concepts of risk and reward, which can be easily taught with just a pair of dice. Give your child five Skittles, and let them know that if you roll a “3” or “6” on the dice, they get five more. But if you roll a “1” or “2,” they lose the Skittles they already have. Let them make the choice of whether or not they want to roll, and use the printable risk and reward scale to help them visualize these choices. Explain to them that this is how buying stocks works, sometimes you’re rewarded, sometimes you’re penalized.
Sometimes, the best way to explain how the stock market works is simply by having your child look at it for themselves. Using the stock tracker printable, look up three or four stocks together and write down their current prices. Each week, remind your little one to look up the prices. After a month or so, they’ll be able to immediately see the way stock prices fluctuate up and down and you can help them understand the importance of investing in a strong and steady stock.
How To Teach Your Kids about The Stock Market – Start Now!
No matter which activity you choose to help your children understand the stock market, the end goal is raising a money-smart little one who truly understands the value of a dollar and the importance of making good financial decisions. These concepts are important to earn early on, and there’s no time like the present to start teaching!