An app for teaching kids to manage their finances

I get a lot of questions regarding teaching kids about personal finance and investing.

There is a very cool app called BusyKid that is an excellent place to start with a young child. You establish a list of chores for your child to do every week and pay them a set allowance to teach them about earning money and developing a good work ethic. The app then allows them to make decisions about spending and saving the money they’ve earned. They can get a prepaid credit card based on their earnings to use when your family is out about town. They can invest the money in the stock market (for real, not pretend), allowing them to learn about risk and how money can grow without them having to work directly for it. Or they can decide to donate a portion of their money electronically to a philanthropy they get to pick out. I’m sure you can arrange for them to tithe a percentage of their earnings this way too.

As far as teaching kids about financial and economic theory, there are many books available for slightly more mature kids.

Here are a few:

The Economics Book: Big Ideas Simply Explained (DK)

The Business Book: Big Ideas Simply Explained (DK)

Six Days in October: The Stock Market Crash of 1929: A Wall Street Journal Book for Children

Our eight-year-old daughter loves everything involving charts. I don’t know why, but when we started working with graphing information in math and coordinates in computer science, she became obsessed. She started graphing everything. She even measures her bearded dragon’s growth and charts it in a journal. I’m sure she’s probably counting and charting the number of crickets he eats too. We spent the last week showing her stock charts with the market crash and recovery, and now she’s hooked on that.

It’s not all that hard to get a kid interested in the stock market. Have them take a moment and think about the corporations they encounter in their daily life: toy manufacturers, food producers, media companies, etc. Then pull up the stocks for those companies and talk about supply and demand for the products and services they provide. On their computer, get them to make a list to track the companies on free websites (Yahoo Finance, etc.). When they are in their later elementary school years, they can even learn about options and derivatives (if you are an especially nerdy family, and I’m going to guess you are if you made it to my blog).

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