As much as we deny it, children teach us many things but are often experts at listening rather than speaking. So if you want to introduce a little financial wiz about stocks and investment, you must use pedagogy methods. Let’s face it; kids will do anything to avoid conversations without value or appeal to them. So, how do you teach stock investing for kids?
You have to find a way to convey your knowledge in simple terms. Einstein once said, “If you can’t explain it simply, you don’t understand it well enough.” So, using the words of an iconic physicist and the basics of education’s respected methods, we provide our readers with a handbook to begin teaching stock investing for kids.
Why Is it Important to Learn About Stock Investing for Kids?
Parents often think about teaching their kids about finances to let them know sooner rather than later how the real world works. On the other hand, some want their child to have a solid financial education for the future. As parents, we often think about our child’s future, as our parents did before us.
Parenting is about giving your child the best chances for a head start. It is not about the money but for a child to be able to make intelligent financial decisions as an adult. So, you can immerse yourself in something other than investing in details. The point is to build a knowledge base upon which your child can create. Whether or not they use that knowledge is up to them.
In addition, knowing about stocks is more than just being able to monitor the stock market. It teaches kids that life is not always a smooth sail. In all honesty, teaching stock investing has many benefits because it indirectly teaches kids introspection, risk, reward, delayed gratification, and logical thinking.
Tried and True Methods to Teaching Stock Investing for Kids
If you look at the teachers, some are well-versed in grabbing the kids’ attention. There was a rowdy group of children in one moment, and in the next, they were looking attentively at their teacher. It’s like magic that few people possess. Teaching kids is all about mutual testing. They test you, and you try them on how far the other will let you go.
Not all children learn in the same way, they learn through observing, listening, exploring, experimenting, and asking questions. In essence, they learn things while interacting with the world around them. Therefore, you can begin by observing what attracts them, so you can get them interested and inspire them with new ideas.
For instance, they might show a keen interest in counting the coins in their money jar. That’s a good thing to use when explaining stock investing for kids, and make a mini-lesson out of it. Once they start learning actively, they become more passionate and creative.
If you tried explaining stock investing for kids to your child, it didn’t go well. Keep going. Children need to be connected to the subject, and your teaching can take time. Well, if it’s going to sink in properly, using a particular method can ensure your kid listens the first time instead of saying, “I’ve gotta go,” and running out of the room before you finish.
Kids are natural listeners. This makes them great students but also means that they learn best when listening to a story. There are thousands of good age-appropriate books about stock investing for kids. In addition, reading books and stories about stock investing can help reinforce what you’ve taught them about money.
Another option is to talk about what makes a good investment when you’re together at dinner or doing something else that doesn’t involve screens. You might want to use examples from real-life or news stories so that your child knows what’s happening in the world around them—and how it relates to their success!
The best way to teach a child about investing is to involve them in your family’s financial conversations. If you explain why you are buying or selling stock and why people do it in the first place, your child will be more likely to understand the process as they grow up.
Many kids are explorers; more often, they learn by participating in some project. For example, you can teach stock investing for kids if you have a garden. Let them imagine money as seeds. For example, make an experiment and a game. Take wheat or any other grain you can get.
Roll some into cotton wool and wet it with water. You can explain to your child that these are the money you invested in stocks, and now you wait for them to germinate. Leave others aside, and pretend you trade them for food, electricity, and water.
Check back in a few days and explain that the seed started germinating and you invested in the right stock. Explain that you are investing in a small portion of ownership of a company, and if the company grows, your seed will be worth more. Explain that while the plant grows, it yields new products from which you get money.
You can change and alter the example as long as it catches their attention. It can be anything from planting to going on a treasure hunt.
Experimenting is one of the best ways kids learn and get to learn problem-solving skills. These are often project-based learning methods. For example, you can download the BusyKid app. Don’t let the chores confuse you because BusyKid also has an investing, saving, spending with kids debit cards, and sharing with charities feature.
It’s easy to use and has $0 commissions to purchase or sell stocks. The platform is designed with kids in mind and we have partnered with Apex Clearing Corporation, a FINRA-registered broker-dealer*. The best part is that they only need a little money. You can help them invest as little as $10.
In addition, you can spark their interest with companies they know well. Let them choose the company by themselves but explain that it’s often wise to research it before investing. You can explain positive outcomes and possible risks and let them know why research is so important.
Have you ever noticed your child folding clothes after they see you do it? That is because it’s a natural way of learning, even for adults, by observing. You must have searched video platforms for reviews of gadgets or lunch recipes.
It’s the same for kids. That is why it’s often said that parents should lead by example. At some point, your actions will be a part of theirs. So, if you are keen on investing in stocks, use it to involve your child and discuss why you choose some stocks over others.
Make it fun! Stock market games and apps are perfect for teaching kids about stocks without boring them with lengthy explanations. You can also set up a mock stock portfolio where each family member has their stocks, which they can trade with each other or sell and buy new ones as they please. This will help them understand how the market works while also allowing them to make real-life decisions!
Teaching kids to invest is about more than just the basics of finance. It’s also about helping them develop critical thinking skills and confidence.
One of the best ways to do that is by asking questions. This is also known as inquiry-based learning. If you ask a question and let the kids wonder about it, you allow them to come up with their answers. However, you can spin the tables and let them make a question of their own. Give them resources to answer those questions, and in the end, you can let them present those findings to you.
For instance, they are researching the company they want to invest in and the company that everyone invests in. The next step would be for them to compare both companies based on facts, figures, and other information available online or from books or magazines.
If you’re a parent looking to teach the next generation about investing, it may be worth giving these tried-and-true methods a shot. With just a little preparation and creativity, you can equip kids with the tools they need to make wise financial decisions. Likewise, with just a little practice and creativity, you can give kids the tools they need to keep their money safe, save for their future, and even build their investment portfolio one day.
BusyKid app for kids is a great tool that lets parents teach their kids about stock investing and money management. If you are interested in learning more about the BusyKid app visit our FAQ.
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* BusyKid Debit Card is issued by MVB Bank, Inc., Member FDIC, pursuant to a license from Visa®️ USA Inc. Cliq® is registered ISO/MSP of MVB Bank, Inc. All cardholders funds are insured by the FDIC in accordance with the FDIC’s applicable terms and conditions. For more information about your card terms and conditions including the VISA Zero Liability policy go here. Cliq®️️ is registered ISO/MSP of MVB Bank, Inc.