Financial literacy is so critical. It’s the one class many of us would have loved to take in college or in high school. According to the Council for Economic Education billions of dollars are spent to teach students how to read and write. Then they enter the world with no basic financial knowledge. Here are some more interesting stats from the council:
Nearly 1/4 of millennials spend more than they earn.
67% of Gen Y have less than 3 months worth of emergency funds
More than 1 of 6 students in the US do not reach the baseline level of proficiency in financial literacy
Remember signing up for FSA, HSAs, withholding, 401K deductions, matching contributions, etc. for the first time? Did you have any idea what you were doing?
Lack of financial literacy is costly. One poor money decision can follow you around for many years. Therefore, its essential for me to to a) be upfront with my kids about money and b) teach them how to be financially savvy.
On my daughter’s 17th birthday, I gave her $170 to invest in any stock of her choosing. I shared with both my son and daughter that from now on, I’d give them $10 for each year they have traveled the sun on their birthday. My son immediately wanted to make sure he’d still get a gift for his 16th birthday, and this new trend wouldn’t start right away for him!
It took her more than 3 weeks to purchase her first stock. She did a lot of research.
Although they were not as excited as me about this new tradition, I know one thing for sure: they do not NEED anything. Can either teen recall what they received as gifts last year? The answer is probably not. We’re not rich, but we’re comfortable. And I want to impress upon them the importance of saving and investing. So, teaching them about the market seems like an excellent next step.
Since they were toddlers, I’ve taught them there are 3 things you can do with your money: spend, share, or save. They’ve mastered the first one. And, they are okay with sharing and giving to others. But, they could definitely work more on saving!
If you have a young child, start with this bank by Moonjar. This is the bank I used to teach my little ones the save, share and spend concept:
The app I decided to use after extensive research is Stockpile. Stockpile required both Taylor and me to create an account. I was able to transfer money into her account, and she was able to select a stock for purchase. I had to approve the stock purchase transaction. And, the stock she picked is one of her favorite companies, Starbucks.
Teach them to buy the stock not the salted caramel latte!
Here are the benefits of Stockpile:
Your teen may buy fractional shares
Stockpile provides kid-friendly stock lists and categories and features companies your child has heard of like Amazon, Disney and Starbucks
You can give e-certificates or certificates (although, I don’t recommend paper certificates due to the high cost)
Stocks appeal to a wide variety of users: fashion, gaming, entertainment, kids, cars, etc.
You can set-up auto deposits.
Milestone chart allows the parent and teen to track progress from sign-up to diversification
Your teen can create a watch list to track future purchases
Here are the cons of Stockpile:
There is a limited number of stocks available
The fees for certificates are pricey
If you are looking to get your child started on stocks, check out Stockpile today! I'm actually plan on using Stockpile to gift my mom stock for her birthday. It's not just for kids.
What questions do you have about teens and financial literacy that you’d like me to tackle next?
Here are the legal disclaimers: I am not making any stock recommendations nor giving any tax advice. This post may contain affiliates links where I may receive a commission.