(This post was done in collaboration withBusyKid. I received compensation in return for my honest review. Every opinion stated is 100% mine.)
“Mom, did you know that Brandon’s mom is a surgeon. She fixes sick people every day. It’s so cool.” Jordan was excitedly telling about his day during our dinner time conversation. “Mom, when you worked in an office, what did you do? – Anything as cool as Brandon’s mom?”
I hesitated for a moment, how was I going to explain the stock market and wealth management to a 9 year old?… and somehow still make my old job sound as exciting as some who saves lives for a living.
Not that I knew Brandon’s mom or needed to compete with her for coolness points, but judging by the look in Jordan’s eyes, I couldn’t exactly say I was a glorified paper-pusher, now could I?
“Jordan, we worked with families to grow their money by investing in things called stocks and bonds. Do you know what that means?”
Apparently I said two magic words: “grow” and “money.” When you are nine years old, you know that money does NOT grow on trees and money is hard to get, so if mom knows how to grow money, well that’s just super cool, right?!
I started to explain the basic principles of stock trading, but I quickly realized that none of my words made any sense. Instead I came up with four different activities to explain stocks and investing in a way an elementary school child could understand it – AND still think it was pretty cool.
[bctt tweet=”Your kids are NOT too young for #FinancialLiteracy – Start today! https://BusyKid.com/mama @BusyKid16″ username=”MamaintheNow”]
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Four Fun Ways to Teach Kids About Stocks:
Please remember when talking to your kids about stocks and money:
- A lot of these topic/ ideas are simply conversation starters.
- You are not supposed to know all the answers or be an expert stock trader.
- This is simply to explain the basics to your child, start a dialog and maybe even spark an interest in a topic that the two of you can research together – and learn along side of each other.
- Walk around the grocery store, toy store or the mall and point out brands your child knows and talk about the product and its parent company.
- Explain to your child (in an age appropriate way):
- Small brands are often owned by larger companies.
- The parent company owns several brands in the same niche, but target different segments of the population to get a bigger overall market share.
- Investing in stocks is the same as buying small pieces of a company.
- A lot of people, prefer to buy shares in companies that are household names, have a solid reputation and great growth and earning potential.
- Examples of large parent companies owning smaller brands:
- Yum Brands: Kentucky Fried Chicken, Taco Bell, Pizza Hut.
- Gap Inc: Gap, Banana Republic, Old Navy, Intermix and Athleta.
- Hasbro, Inc: Hasbro, Playskool, Tonka.
- Mattel, Inc: Mattel, Fisher-Price, Mega Brands, Fuhu.
- Explain to your child (in an age appropriate way):
- Put sticky notes throughout the house on items and services that come from publicly traded companies.
- This exercise is also a great way to explain where money is spent. If your kids are anything like mine, they think that parents’ payday is a windfall… until they realize how much electric, water and cable cost!
- Showing the kids which companies provide the various services we use, helps them to understand that every family, every person is part of a larger community, and that people work at these companies to help keep the community run smoothly.
- Talk to your kids about the different companies represented in your house.
- Is it a company that provides a necessity or a luxury item?
- Is it a service we use all the time or only a few times a year?
- Is it something we can live without?
- Would it be possible for another company to provide the same service or product cheaper or better?
- Examples of companies:
- TV (examples: Comcast, Direct TV a subsidiary of AT&T).
- Internet (Comcast, AT&T).
- Cell phone (Verizon, Sprint, AT&T).
- Lights (Florida Power & Light).
- Clothes (Gap, Gymboree).
- Appliances (General Electric, Whirlpool).
- Look at charts and graphs of their favorite companies.
- Talk about stock prices in correlation with seasons and product roll-outs.
- Kids learn the basics of charts and graphs early in elementary school.
- They will be able to identify when a stock price is going up or down.
- Read the headline news of each of the companies and see if you can match the news with a movement in the stock price.
- Talk about how the stock has performed over the past month, year and five years.
- Discuss if you should look at short term movements or long term movements.
- Compare the charts of your child’s two favorite toy companies.
- How do the charts compare, do they have the same movements. Why/ why not?
- As I mentioned before, please don’t be intimidated by these topics. These are meant as conversation starters and together you and your child can learn about stocks and investing. Everyone (old or young) should have a basic understanding of the stock market, even if you have a financial advisor managing your investments.
- Talk about stock prices in correlation with seasons and product roll-outs.
- Open a stock trading account for your child! BusyKid offers the perfect scenario for a child’s first stock account.
- This is my favorite activity! NOW you can REALLY open your child’s eyes to the fascinating world of investing!
- Let your child pick 3-5 stocks based on their interests or best guesses for future growth and watch the stocks’ performance monthly.
- Add a little to your child’s investments every month and watch how the funds grow over time (or not, depending on the performance on the investments.)
Sign up for your 30-day FREE (zero obligation) TRIAL with BusyKid today! See for yourself why Mama in the Now and so many others love this revolutionized way of teaching your child how to balance: spending, investing and sharing.
What isBusyKid? (- and why is it so awesome?)
- It is a household chore-management website for parents and kids.
- Don’t miss my complete review of the BusyKid website, you will WANT to sign up for your 30-day free trial after reading this: Complete BusyKid Review.
- Parents assign kids chores and they set an amount to be paid out weekly, after the chores have been completed.
- On payday, a portion of the earnings are allocated towards “spending”, “sharing” and “investing.”
- The child can cash in their “spending” money to buy gift cards from popular retailers, or leave the cash in the account.
- The funds allocated to “investing” can be used to buy common stocks. The investments are kept in a real brokerage account and you then have access to company news, performance charts and graphs.
- The “sharing” allocation of the funds can be donated toreputable charities, allowing the kids to donate to the cause of their choice without hesitation. (Our son chose the Make a Wish Foundation to be the recipient of his charitable donation since he went on a Make a Wish trip last year.)
Sign up for your 30-day FREE (zero obligation) TRIAL with BusyKid today! See for yourself why Mama in the Now and so many others love this revolutionized way of teaching your child how to balance: spending, investing and sharing.
Kids can easily log in and monitor their investment portfolio’s performance, which is why we love BusyKid in our family.
Streamlining our kids’ chores is giving me some much needed help around the house. BusyKid has also taken all the guess work out of “who does what” and for “how much,” which is a huge help in a family with four boys who all feel that the others get more.
Our kids have learned an incredible amount of responsibility from our BusyKid membership. They play an active role at home with regard to housework and they take responsibility for their investments. It’s a win win for you and the kids.
Teaching your children about financial literacy at a young age prepares them well for the real world of bills, responsibilities and controlled spending.
