You can spark your child’s financial curiosity sooner than you think.
- Use technology for good with family-friendly financial apps.
- Get them vested and invested by opening a custodial IRA.
- Bring them into the fold with experiential learning about your own finances.
Your sophomore probably isn’t discussing the next Fed rate hike. But according to PBS.org, their financial habits are set by age seven. Here are four ways to pique your child’s financial interest.
1. There’s an app for that
The extra screen time may not excite most parents, but using that time to develop a child’s money mindset should. Apps like Greenlight and FamZoo make virtual banking a family affair.
With stipend transfers and debit cards, kids can learn the value of earning money and the importance of spending wisely, without having to deal with overdraft fees and other penalties. The best part is that parents have complete control over their child’s experience by limiting purchase categories and reviewing each transaction.
2. Open a Roth IRA custodian
When your child begins to receive earned income, opening an IRA for them is a great learning opportunity. By having an account in their name and funded by their hard work, children will have a sense of belonging as they take their first step towards a secure retirement.
And don’t forget the investments. Encourage your child to research investments and watch them grow into a lifelong investor. Don’t forget to diversify your holdings: nothing is more discouraging than seeing hard-earned money disappear!
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3. Make it your financial co-pilot
Investing your retirement account? Show them what you do. Run to the bank? Present them to the cashier. Meeting with a financial adviser? Take them with you; they might even have a suction cup. When it comes to financial education, make it experiential.
A 2018 study found that family communication patterns significantly improve students’ financial knowledge. By exposing your financial situation to your children, they have gained additional experience regarding their own financial future. Learning the summary is important, but hands-on experience is the best way to spark their interest.
4. Learn in the classroom (yes, really)
Financial literacy classes in public schools still have a long way to go, but some nonprofits are filling the void. Junior Achievement and the Jump$tart Coalition are two such groups that are bringing personal finance to the classroom.
As a parent, you have a lot of influence over what is taught in your child’s classroom. Why not check to see if these or other personal finance programs are offered by your child’s school. If not, discuss with the administration to see how this can be changed. If they are, get involved. Volunteers are always encouraged. When it comes to financial literacy, every parent should be an advocate.
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