top of page
  • Radhika Garg

Investing Early: Why Must Your Child Start Young?

Children are never too young to invest. Teaching them to invest at an early stage will set them up for life.

Why start so early?

Investing early in life, the kid learns financial independence and discipline. It is all about teaching investment strategies and subconsciously putting basic concepts in the child’s brain. This little amount of money that he invests now will put more money in his pocket in the future.

Investment is important today, more than ever!

The importance of investing money today is larger now more than ever and it grows more and more with every coming year. The kinds of times we live in today make us financially vulnerable. Starting investing early will only give more opportunity to achieve long term goals.

The good old Piggy Bank

Strategic investment teaching is important with young kids. Introduce interest and offer to add to their piggy bank. Start giving them small amounts of pocket money, just sufficient to meet their needs and a small surplus which gets saved in their piggy bank. Every time your child spends, the level goes down, and vice-versa. This shall make their mind focus on investing.

From Saving to Investing

It’s important for them to slowly learn the difference between investment and saving. You should begin with the basics, as suits their age and learning capability. Teach them that they must not place all of their eggs in one basket.

By starting early, children can grow up to become more financially prepared and savvy. You can also help your kid understand the basic concepts by giving them a play money portfolio.

Teach with stories and examples

Kids get a better understanding through stories. Try giving them the following example.

Suppose they put away a certain amount of money a month for 5 years and never invested it, they would have just the saved amount after 5 years. But if they invested that same amount a month for 10 years and earned a certain percent each year on their investment, they would end up with more than they saved.

Investing is basically just a means of using money to create more money.

Kids have plenty of time

Kids might feel that they don’t have enough money to invest. The truth is, it’s more about how much time you have to invest it than about how much money you have to invest. And of course, something that such a young kid has plenty, is time. One of the most important things that we need to understand when it comes to financial planning is that there is a need to start investing as early as possible so that the child can stay invested long enough.

Budgeting, Spending and Saving

Help your child set his priorities straight. He should learn how to manage and budget whatever small or big amount of money he might have.

If your child is old enough to go and buy something on his own, let him feel accountable and ask him to keep a written record of the expenses. Having an understanding of money can help children to achieve their goals and enjoy a nicer life.

Building strong money habits early on helps avoid many mistakes that lead to money struggles in future financial life. If you as parents or guardians want your children to learn managing money and investing it in their early age, The Sack Club has just the right energy for your child.

5 views0 comments

Recent Posts

See All
bottom of page