Whenever we receive cash gifts for our Daughter Ava, we do not touch any of them and strictly deposit them into her Robinhood Brokerage account. I chose Robinhood as it is a child-friendly app and I will be able to teach her about the stock market and how the economy works while she co-manages with me.
Because the value of her account is relatively small, instead of leaving it as cash, I decided to invest all of it into the stock market in safer blue chip stocks and safer growth companies that I feel confident will exist for the next several decades. Of course, any of these companies can also go under, but with diversification and monitoring it should be able to generate solid returns.
Other money lessons that I want to teach her are learning the value of each dollar and what it takes to earn each dollar that we spend. When she is young, I will have her contribute a small portion of the item that she would like to purchase with her own money. Even as she enters her youth years, I want her to experience real-world jobs and earn a paycheck working at minimum wage jobs so that she understands the value of money and hard work.
Methods to consider:
1) Lead by Example: the way and the attitude that I treat money, the kid will do the same (i.e. buying things on sale/kid will buy on sale, not splurging on gadgets/kid won't splurge on things, saving money/kid will also learn to save).
2) Tell them I can't afford something: "we can't afford this now but we can set goals and save for it" Teaching kids that over time, the saving will help them reach the goal.
3) Giving Allowance: doing specific chores, studying, or other things they have to do to earn money. Getting money anytime will teach them they don't have to work for it.
4) Set up a savings account or Piggy Bank: when they get money coming in, they learn to save for emergencies or to buy something in the future that they don't know about.
5) Teach kids budgeting: Set a budget for a category and give them options on how they want to spend the money and what to get (i.e. school clothes for the year).
6) Reward kids on savings: Giving them incentives to save like providing them with interest. Money also comes from managing money well as well as working hard for it.
7) Remind kids that it's okay to talk about money: Money is not a secretive thing and can learn to be transparent and communicative about money and be a regular part of their lives.
8) Take your kids to shop: They can see how much things cost and not waste things if they see how much things cost.
Please share some of your favorite money-related parenting tips for your kids!
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