As we tend to grow older, the dark and gloomy question about what to do with the money we have earned lingers over our heads daily. We have tons and tons of extra cash in the bank without a single clue on what to do with it. This occurs due to the lack of knowledge and understanding about investing and the process involved with making investments with outside sources. What if we could skip the step of accumulating money with no final destination in store? So, how do we invest?
That is why we at Ivy Camps believe in the importance of starting kids on the right track at a young age. Let’s start teaching our kids about investing in middle school, or even elementary school!
Upon developing a more concrete understanding of various financial and economic concepts, the next step in the process includes teaching the basics of investing and the tools that are there to be utilized in order to be successful with your money.
Parents, look no further for new ways to increase your child’s understanding of financial literacy and get down to the nitty-gritty with five easy steps to be followed. In this article, you will find a series of steps on how to teach your kids about investment banking and why it is essential for students to learn about this topic at a young age.
Step One: Define Terms
The first step to increasing your child’s financial literacy stems from defining the terms that will be used on a daily basis. What is an investment? What are savings? What are stocks and bonds? Having a basic understanding of each of these terms will provide the necessary grounds for becoming financially stable later on in life.
An investment is an act of putting your money into something in order to help that lump sum of money grow. By hiding your money in your room or keeping it locked away in your piggy bank, you will not be able to earn any money.
Savings are putting some money away for later. Instead of spending everything now, you can tuck some away and save it to use further down the line!
Stocks are having part ownership of something like a company while bonds are agreements to lend some amount of money to a company. Companies might sell stocks in order to generate money and accept bonds to increase profit.
Step Two: Saving Money
The second step to increasing your child’s financial literacy means saving money. Teaching your kids to begin saving small portions of the money at a young age will impact their practices in the months or years to follow. A key concept to share with the kiddos is that money isn’t just for spending, it is used for saving too!
Step Three: Earning Money
The third step in the process is to earn some money. Who doesn’t love getting additional change in their pocket at the end of the month? Creating ways for your kids to earn their own money is ideal for success. Allowances are a great way to do that. Not only will creating ways to earn money help the kids, but it will allow them to practice making decisions about how to use their money!
Also, creating business opportunities for your child to succeed allows for another chance for your kid to learn their own money. Whether it be a lemonade stand on the corner or an online bake sale available to the community, business opportunities breed opportunities to earn money.
Step Four: Growing Money
The fourth step in the process is to grow money. The best way to start growing money is to save it! Teaching your kids about investment and how to grow their money is vital to invest! Investing helps grow it at an even faster rate than imaginable.
Another way to help teach your kids about investing and help them grow their own money is to open up a joint account with your child! By creating a custodial account with world-renowned brokerages, being by your child’s side for every step of the journey will inspire them to use their money wisely and capitalize on their own stock!
Step Five: Model Parent
Kids look up to you every day. Kids are easily impacted and influenced based on their parents' behaviors. Be that model parent! Show off the dos and don'ts of investing! Save your money! Invest your money because what you do today, your kids will do tomorrow!
By developing their own financial literacy, your child will quickly and efficiently discover the pot of gold at the end of the rainbow. Here at Ivy Camps USA, our Ivy League instructors will explore the best path in teaching your student the dos and don'ts of investment. With their help and guidance, students will master the basics of personal financial literacy while understanding needs and wants, ways to earn money, how to budget, the best route to make decisions, how to save and invest money, and so much more.