• 4 Pocket Allowance

Why teach kids about investing?

Updated: Aug 4, 2019

With most people that I talk to, the Giving, Spending, and Saving pockets are all intuitive, but the Investing pocket leaves some puzzled.

However, in my humble opinion, this is an important component to rounding out teaching kids about money. For starters, kids need to know that saving money isn't just about saving it to spend it. Some of our savings is there for the long term. In addition, it gives them a little "skin the game" when it comes to their education fund, or a little nest egg for when they're grown (something they may not appreciate now, but certainly will later). But mostly, I want my kids to learn that you can use money to make money. At a young age, I show them the interest they are making, and as they get older, I share different investment options, and the risks/benefits of each. By having their own investment account they are much more "interested" in these discussions (no pun intended) as it becomes a two way dialogue than just mom or dad talking.