Education is one of the primary ways, which parents invest in their children, and it is worth it, considering that it is imparting knowledge and skills. However, when teenage age knocks, the desire for independence starts building up aggressively. It gets furious when teenagers start making money.
At this point, parents must speak and teach their children about investment. The good news is that money lessons learned during teenage age can be very handy into adulthood. Additionally, it could be incorporated into a future career.
Read below some of the strategies parents can apply to help their teenage children invest: –
Savings and checking accounts
They are a huge benefit in teaching a teenager basic financial management skills. They may not have any interest returns at the beginning, but they are a good starting point as they wade through life. The parent can take the management of the account or be a co-signer of the account.
Investing in a business
Businesses have a fair share of risks, so the best is to start small. A small Etsy shop can be a beginning point. How about a lemonade stand or even exploring their hobbies working online? Through these small businesses, a parent can instill in the teenager lessons on pricing, discounting, and tracking purchases. It is worth noting that there are hundreds of teenagers thriving from entrepreneurship.
Opening a Roth IRA
This is an interesting strategy as it explores the path to retirement. A Roth IRA allows a person to deposit money, which grows tax-free. And given that it features retirement, it would be the right time to make a teenager understand the importance of long-term saving. However, the savings are only accessible at the age of 59 ½.
Micro saving Apps
For those who understand how they operate, they are quickly becoming the easiest way for any child to save. They are easy to operate as they round up purchases to save your balance. This means, if an item costs $10.50, the App rounds the figure to $11, and the extra $0.50 is invested in the stock market.