Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21
CISCO 2020 Dot com Bubble Stock vs 2021 Bubble Tech Stocks Warning Analysis - 6th Oct 21
Precious Metals Complex Searching for a Bottom - 6th Oct 21
FB, AMZN, NFLX, GOOG, AAPL and FANG+ '5 Waves' Speaks Volumes - 6th Oct 21
Budgies Flying Ability 10 Weeks After wings Clipped, Flight Feathers Cut Grow Back - 6th Oct 21
Why Silver Price Could Crash by 20%! - 5th Oct 21
Will China's Crackdown Send Bitcoin's Price Tumbling? - 5th Oct 21
Natural Gas News: Europe Lacks Supply, So It Turns to Asia - 5th Oct 21
Stock Market Correction: One More Spark to Light the Fire? - 5th Oct 21
Fractal Design Meshify S2, Best PC Case Review, Build Quality, Airflow etc. - 5th Oct 21
Chasing Value with Five More Biotech Stocks for the Long-run - 4th Oct 21
Gold’s Century - While stocks dominated headlines, gold quietly performed - 4th Oct 21
NASDAQ Stock Market Head-n-Shoulders Warns Of Market Weakness – Critical Topping Pattern - 4th Oct 21
US Dollar on plan, attended by the Gold/Silver ratio - 4th Oct 21
Aptorum Group - APM - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 3rd Oct 21
US Close to Hitting the Debt Ceiling: Gold Doesn’t Care - 3rd Oct 21
Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
Original Oculus VR HeadSet Rift Dev Kit v1 Before Facebook Bought Oculus - 3rd Oct 21
Microsoft Stock Valuation 2021 vs 2000 Bubble - Buy Sell or Hold Invest Analysis - 1st Oct 21
How to profit off the Acquisition spree in Fintech Stocks - 1st Oct 21
�� Halloween 2021 TESCO Shopping Before the Next Big Panic Buying! �� - 1st Oct 2
The Guide to Building a Design Portfolio Online - 1st Oct 21
BioDelivery Sciences International - BDSI - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 30th Sep 21
America’s Revolving-Door Politics Behind the Fall of US-Sino Ties - 30th Sep 21
Dovish to Hawkish Fed: Sounds Bearish for Gold - 30th Sep 21
Stock Market Gauntlet to the Fed - 30th Sep 21
Should you include ESG investments in your portfolio? - 30th Sep 21
Takeda - TAK - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 29th Sep 21
Stock Market Wishing Away Inflation - 29th Sep 21
Why Workers Are NOT Returning to Work as Lockdown's End - Wage Slaves Rebellion - 29th Sep 21
UK Fuel PANIC! Fighting at the Petrol Pumps! As Lemmings Create a New Crisis - 29th Sep 21
Gold Could See Tapering as Soon as November! - 29th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

How to Teach Your Children Financial Independence

Personal_Finance / Educating Children May 02, 2008 - 04:32 AM GMT

By: Money_and_Markets

Personal_Finance

Best Financial Markets Analysis ArticleNilus Mattive writes; My daughter is only 10 months old, but my wife and I are already anticipating the day she comes asking us for money to buy the latest designer handbag. Disha is making a list of her favorite stores. Me? I'm envisioning how I'll use the request as a way to talk about the importance of money and sound spending habits.

Last time I checked, very few elementary schools — or even high schools, for that matter — were teaching kids anything about finance. And that's a real shame.


Few students will ever use their knowledge of frog anatomy. But every single student will have to make major financial decisions for the rest of their days!

So, if you have a child or grandchild in your life, I encourage you to do all you can to help set them along a path of financial independence. Today, I want to give you ...

Six Ways to Teach Children About Money and the Financial Markets

#1. Get them started on an allowance early.

When it comes to money, I think it's important that kids get their hands dirty. They need to receive a set amount of cash to call their "own." Heck, it's easy to ask Grandpa to buy something for them. It's a little different when Grandpa gives them the money and makes them spend it on their own. The personal connection with the exchange becomes far more real.

Depending on the child's age and inclination, you may even let them direct many of their own basic purchases (for example, school clothes) as long as they stay within predetermined criteria.

#2. Help them establish a budget.

This dovetails with the idea of an allowance. Children, even at a fairly young age, are perfectly capable of keeping a little notebook that tracks how much money they've been given and what they've spent it on. Have them write down a future purchasing goal, and then help them track their progress toward that end.

#3. Open up a savings account ... and let them see the progress.

If you've established some sort of savings account — whether a tax-sheltered college plan or a regular passbook account — that's terrific! But I think it's equally important that you show the beneficiary the account's progress. Nothing brings home the power of compounding interest like seeing it in action. You might even consider doing a simple chart that shows how the account is increasing, and what it will likely become a few years down the road.

#4. Explain your own choices and purchasing decisions.

Every child should be taught the importance of money and sound financial habits!
Every child should be taught the importance of money and sound financial habits!

Is it time to shop for a new car or dishwasher? Major purchases are a great way to teach the importance of research, comparison shopping, discounts and negotiation. Ideally, you can have them help you read through reviews, calculate price discrepancies, or even accompany you on the actual purchase day.

I'll never forget sitting with my dad during a particularly tense negotiation with a car salesman. It was a real lesson in holding out for the very best deal.

#5. Show them how the markets work.

When I was young, I was fascinated with the business section of the newspaper. I would watch the prices of various stocks every day. These days, it's easier than ever to teach children about the markets. They can create dummy portfolios through various websites, check real-time prices online, or use the old-fashioned route of looking up prices in newspapers just as I did. Having some adult guidance to explain the various moves would be a terrific learning experience.

#6. Give them an investment of their own.

Watching those stock prices got even more exciting once I owned a few shares of IBM. Sure, when the value fell, I was upset. But it also taught me a great deal about risk and volatility. Heck, model portfolios only go so far ... and that's why, if you have the means, I suggest giving a child a few shares of a major brand-name stock.

Plenty of kids know about Disney, Nike, and Coca-Cola. So why not let them "own" a little piece of the firm, and explain the benefits, especially the importance of dividends !

Don't know how to give a child some stock?

If it comes from your own portfolio and you have the physical certificate — you'll have to sign the certificate over in front of a guarantor (such as a bank or brokerage). There may also be a form to fill out that declares the transfer of ownership ... look on the back of the stock certificate.

If you currently own the shares, but they're held electronically by your broker — you'll have to notify your broker of the transfer and provide them with details on the account receiving the shares.

Keep in mind that gifting stock you've owned for a long time can also offer you significant tax advantages. For example, you may be able to pass along appreciated shares and avoid paying substantial taxes in the process. Talk about a win-win!

Lastly, if you want to give a share (or more) that you don't currently own — plenty of websites specialize in this kind of thing. They'll register the share in the proper name, and even send a nicely mounted stock certificate right to the person's home. Three sites that I came across are www.giveashare.com, www.oneshare.com, and www.giftsofstock.com. Those are good places to start.

Would you prefer to give a bond instead? Then you might consider a Series EE or Series I savings bond. They don't quite foster the same level of excitement as a stock certificate, but they are nice little investments that can be held for long periods of time. To buy them online, or for more information, visit treasurydirect.gov. Alternatively, you can buy paper bonds from your local financial institution.

Those are just six ways to get a child started down the path to prosperity, and surely there are plenty of others. You may have your own approach or various ways to tweak my suggestions. That's great — every child is different and every person has their own teaching methods.

The important part is showing our kids how to make sound financial decisions before they come asking to borrow our credit cards!

Best wishes,

Nilus

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Barbara Shaughnessy
02 May 08, 18:57
stock for grandchildren

I have been trying to find a way to give one share of stock to my four grandchildren - I found E-Trade, but have not used the service yet but then thanks to my son I read all the places I can go to check my desires out. I thank you for the info and will check them out.


Sarah Jones
03 May 08, 07:13
One Stock

There are quite a few online stores from where you can purchase a single stock in a frame with accompanying literatire to get your child interested in finance.

One such site is www.oneshare.com

SJ


reality check
08 May 08, 13:12
School of Hard Knocks

Don't forget to factor into the equation the strong desire to rebel. Many of us who had parents who were thrifty saw blowing cash as rebellion. Teaching your child not to be a sucker is rocket science. It took going through the proverbial school of hard knocks for me to learn that being cashless turns you into the invisible man.


debtdoctorsfoundation
22 Apr 10, 08:07
children's saving literacy

We are 'debt doctors foundation' based in Uk and really enjoyed reading your article about how to teach children financial independence. We are trying to raise awareness in child from 4 years old through meetings in large number of private and public schools in London. Our first book ' The Lost Money Box' is a funny story about one girl becoming aware of the value of the money while taking care about one money box that contains her money collected in her birthday and from previous familiar events.

It's a delicated way to teach children how important is money in the life.

Link us:

http://www.ddukonline.org/moneypenny.html

and buy the first of the 10 books that will be published very soon.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in