Did you know that investing does not have to start when you are already in your adult years? Yes, at a young age, you can start building your empire and working towards financial independence. Even in your teen years, it does not hurt to begin doing some research or asking people for financial guidance, which can give you more opportunities in the future.
The truth is that money offers individuals with more chances to get ahead in life. If you have solid finances, you can travel the world and become more exposed to different cultures. There is also a better opportunity for you to take up higher education in other countries, and you can free yourself from the chains of having to work on an 8 to 5 job until you are 60. There are surely exciting things that await you if you have financial freedom. For the most part, time is in your hands, and you have plenty of time and energy to do the things you love instead of endure having to commute to work, sleep very late at night because of a tough project, and have zero quality time with your loved ones.
As a parent, you should start educating your teenager about the value of investing and saving money earlier in life. Keep in mind that once habits are formed, these can be tough to undo. This is why if you introduce them to a practical habit such as growing their savings, then you are setting them up on the right track. At the same time, you can spare yourself from the massive headaches of constantly worrying about your child who face money problems all too frequently. In the end, it is definitely a win-win situation!
So, if you are planning on teaching your kids the basics of saving money and investing, then here are some things you may want to impart to them.
1. Tell your kids something about your current financial situation
Kids have things come so easy in their life. They do not have to worry about paying the rent, setting a food budget, or settling payment for credit card bills or debts. All they know is that their parents have these things all figured out, and they just need to focus on their studies, get good grades, and life works itself out that way.
But you see, there is nothing wrong at all with enlightening your youngsters about your financial situation. They need to know what is going on that makes things organized in terms of the financial aspect of life. So, if you have teens whom you believe need to know the lowdown on investing and financial freedom, tell them more about the common situations that exist in the real world. This will make them realize that it actually takes effort to manage money and keep their finances in check.
For instance, you may tell them about your monthly bills, the cost of groceries you buy each month, the tuition fee you are paying, and so on. Then, you may share some experiences or actual stories with them that will guide them towards addressing difficult financial issues in the future. If they have questions, do not hesitate to encourage them to ask them – and be prepared to give your honest answer. If you ever need to get hold of some emergency money, you can always approach licensed moneylender in Singapore as they provide best personal loan and instant payday loan.
2. Give them an idea about the value of money
Perhaps your teen has absolutely zero idea on what a dollar or 100 dollars mean. So, whenever they want to buy something, they may end up acting on impulse and not think about the consequences of their action. Supposing they received some cash for their birthday or the holidays, teach them the importance of saving it and perhaps making it gain an interest over time from their investment. Put a value to the amount of money they have at the moment, and you can tell them that if they choose to save it, then it is possible for them to use the money for purchasing concert tickets or the latest device they have been wanting to buy.
This will allow your children to think first before instantly spending the money they receive. Also, you may want to impart to them the importance of categorizing things as either a need or a want. Oftentimes, they simply want to buy an item because they want it, but not because it has any significant value to them. In the end, they just accumulate “stuff” that fill up their closet, which they soon want to dispose.
You may also share examples when you decided to save the money instead of spend it because of your desire to grow your finances. Or perhaps, you can tell them the value of things you own whether it is your house, car, and other valuable properties. This will make them realize that if they want to live a comfortable life, the goal is to start saving money at a young age and allow their cash to gain interest instead of having zero funds due to impulsive buying.
3. Teach them the basics
When you are learning a new skill, you have to start with the easier way and slowly progress to a more difficult or advanced level. The same goes with educating your teen about investing. If you want your youngsters to learn, then you have to give them “training wheels” before introducing them to the intricacies of how to invest and manage their finances. This means that you may want to explain to them your own ideas on investing or your philosophy, which affects every decision you make. You may also have your investment techniques that are worth sharing with your teen, particularly if you have gained positive results from it.
When you discuss to them the basics of investing, and then share success stories you had, then they will be more inspired to get started. You may teach them the fundamentals of the stock market, along with the different investment options available. These include the REITs and mutual funds offered by various financial institutions. Then, you may want to discuss more about the benefits and limitations of each, so they can decide which one works for them more.
If you keep things simple while informing your teens about the rewards you have reaped from investing, it will not take long before they decide to get into it. After all, everyone wants to make money and experience the freedom and better opportunities that having a stable financial situation offers. As long as you keep things simple and understandable for your teens, then you will be able to encourage them to start thinking about their future including managing their finances properly.
4. Modern technology can help in teaching the basics of investing to teens
Thanks to modern technology, there are now ways to simplify the whole practice of investing without keeping kids clueless about how the whole thing works. Sometimes telling them how one thing works is not enough. You will actually need to show them and to give them examples that can help them visualize or even engage in investing without having actual money involved.
Nowadays, there are trading apps available to people such Kapitall, which you can present to your teens. The good thing about Kapitall is it gives you a chance to create a $100,000 portfolio, then track the progress efficiently. This aim to generate financially independent individuals – and your teen may be one of them! The games will also guide your teens further to obtain relevant investment concepts that they can apply later on in their lives.
So, start them young and give them a better chance at life by encouraging them to manage their wealth and grow their assets for more opportunities in the future.