As parents, we’re constantly dreaming up ways to invest in our children’s future. But what if I said you can plan for your kids’ finances while also teaching them valuable lessons about investing?
That’s exactly what Amy Koit is doing. The lawyer and accountant not only saves for her three children through investment bonds, she actually lets them select their investment options.
Sound crazy? It’s actually perfectly reasonable – but only when you give your kids proper financial literacy skills.
Of course, Amy doesn’t let her kids build their own investment portfolio. But she does go through the options with them, allowing them to select between Australian shares, property, international stocks and cash. (As you can see, Amy has vetted the choices for them, but their input still matters.)
“I picked out two or three that were my preferred options, then I sat the kids down and looked at the pros and cons of each … and then asked them what they thought,” she told ABC.
You don’t have to be an accountant or lawyer to teach your kids financial literacy. Getting them to download a micro-saving app is a perfectly good start. These apps allow you to invest small amounts of money in financial assets like stocks and property. Best of all, you can start with only a few dollars.
Another option is to invest a portion of the money your children earn from household chores into an investment account. This teaches them how to budget their money and allocate a portion of their income to investing.
Financial literacy is about more than just dollars and cents. It boils down to education.
Amy doesn’t mind what her children do with the money they’ll receive in adulthood because she has given them a proper education about finances. Involving your kids in financial decision making at an early age could give them a huge advantage later in life.
Covid-19 has magnified the importance of financial literacy. The earlier we start with our own kids, the better off they’ll be in the long run.