Should Teens Invest? How to Get Them Started

(ProsperNews.net) – Many parents begin teaching their children the importance of saving money at an early age by introducing the piggy bank concept. Later, young children may start earning an allowance for completing chores. Often, they’re encouraged to put a portion of their weekly allotment in a savings account.

Additionally, your child’s teenage years represent the perfect time to educate them and get them started on an investment plan.

Technically, an individual under 18 may not legally open an investment account, but many companies allow such an account with the parent as the custodian. Apps also exist that give teens a way to review and track the progress of their investments.

Advantages of Investing for Teens:

Teaching your teenager to invest represents the next logical step in their education surrounding money and finances after responsible spending and short-term savings. Some benefits of setting your son or daughter up with an investment plan include the following:

Teaching your teen about investing also encourages parents to make responsible money decisions.
Investing helps a young person learn about long-range planning and gets them to think about their future and setting long-term goals.
Teens will also learn the importance of weighing their principles when investing. They may look for an investment that qualifies both as financially profitable and aligned with their social conscious and interests.
Investing will help teach your teenager patience as they learn to review their account over time and not expect immediate positive results.
The apps designed for teenage investing promote constructive use of technology.
Investing early will most likely significantly increase your teen earnings for their long-term goals.

Investment Apps for Teens:

It’s important to note that not all investment apps come recommended by the financial industry, and, of course, you also need to watch out for scammers and apps that aren’t safe. Listed below, you’ll find some examples of companies and apps that make sense for your teen:

Greenlight comes with a personalized debit card for your teen. Though your child may enjoy using their debit card, it also gives you parental controls so you determine the amount they spend and where they shop. Parents may also receive notifications when the teen uses the card,
The Fidelity Youth Account does not offer a spending account but only long-term investing options. It’s ideal for long-term goals such as college. It comes with a wide array of educational tools and information. The youth account is free if a parent owns a Fidelity Investment account.
Acorns Early ‘s mobile app offers a spending, savings, and investment account, all for $3 for an individual or $5 for a family. When a parent opens a Family account, they may add their children at no extra charge under the Uniform Transfers to Minors Act and the Uniform Gifts to Minors Act. Investors may choose from five ETF accounts with various levels of risk. The minimum investment is $5 monthly, and when the teen reaches legal age, they may achieve full ownership.
Early Bird operates under the UGMA guidelines and focuses on investing in long-term educational goals and significant purchases. The app allows users to choose from a mixture of five ETF funds ranging from aggressive to conservative. The price for one child is just $2.95 a month. If the parent adds more than one child, the monthly fee increases to $4.95. They also provide a link for grandparents and other relatives who may want to invest in the teen’s future.

Educating Your Teens about Investing:

Of course, if your teen knows some basics about the value of money and the importance of saving, they will respond more favorably to learning about investing. Some high schools offer courses in the stock market, and community classes that teens and their parents may take also exist.

Parents may help their teens learn about investing by explaining how the stock market works and how investors make and lose money. You may want to meet with a bank or brokerage firm expert for a more detailed explanation.

Talking about and setting realistic goals for college or career training will also help them understand the purpose and importance of investing.

Setting a good example may represent the best teaching experience. Talk to your teens about your investment journey and your long-term goals.