We are all aware of how important investing is. When you are young, it is difficult to become excited about it simply because there are no short-term benefits to it. Still, from a young age, our parents teach us that we should always think about the future and start building it as soon as possible. Even when the kids are young, parents advise them to spend their allowance smartly.
Nevertheless, it isn’t that easy for minors to enter the world of investing and saving. Sure, there are some plans, but these require a custodial account. These can be quite costly, which is the main reason why adolescents and their parents decide to pass on and wait for the kids to become of legal age. Well, today, there is a new platform that enables children to start investing, under the supervision of adults, of course. If you want to learn more about how everything works and what is the custodial account, in reality, visit loved.com, because, in this article, we will provide you with a list of reasons why you should support your teenagers in doing this.
1. Develop their money-managing skill
Every parent’s main job is to make sure that their child feels their support to pursue their dreams. However, parents also have to ensure to equip the kid with the set of skills they need to lead the best lives they can. Surely you want your teenager to be successful in life, build a career, and not have to worry about the finances. Still, sometimes, it doesn’t matter how much someone earns if they do know how to manage the money.
Yes, it is your job to teach your adolescent about money-managing, and investing is a great way to do it. Introduce them to this world, teach them how everything works, and get them excited about it. Yes, this can be a bit tricky because they won’t be able to use that money for some time. Why not make a long-term plan together? Some kids won’t respond to the argument that they are saving money for college because they have you, as a parent, to lean on. Instead, you should focus on their interests. Maybe they are into technology, or on the other hand, want to travel the world. Create a plan together, encourage them to save money, and always remind them of the main goal. Over time, they will get into the habit of doing this, so investing in their future will become a normal occurrence.
2. Improve the spending habits
In order to save money, teenagers have to stop spending too much of it, right? This can be quite challenging, especially at their age, when they feel they are on top of the world. To teach them how to do this successfully, you should come up with a budget.
Start with calculating how much money they have each month, whether it is an allowance they get or the money they earn. Then, talk with them about the things they would like to spend it on, everything from clothes to movie nights with their friends. Decide on the funds they should put aside every month, and make sure they stick to the plan. It almost doesn’t matter if they save $5, $20, or $40. The whole point is to teach them how to be responsible about their spending.
3. Lead them towards financial freedom
Having money in a savings account is always an invaluable benefit. If they start investing early, they will easily increase the funds they have, and therefore, set a great foundation for their adult life. Unfortunately, the only thing that can provide us with this kind of safety net is our savings account. Even if you have a great job, you can never know what the future holds. Plus, a lot of people live from paycheck to paycheck and cannot afford to quit their job even though it makes them miserable.
Surely, there is at least one person who lives like this in your surroundings. Make sure to teach your child not only about the benefits of having this financial freedom but also about the opportunities it will provide them with. They will be able to chase their dreams and pursue their interests. It will make them feel more confident and live life to the fullest.
4. Financial security
Without a doubt, this is the most important reason why everyone should start investing, regardless of their interests, occupation, and even their age. Surely, it is always better when one starts early, which is why you should encourage your kids to do so.
Going through life is hard on its own, and having to worry about money is one of the things that can, more or less, be eliminated from the list. We have already mentioned that it is always a good thing to have a safety net when it comes to employment, but what about numerous emergencies that can arise? And they definitely will, sooner or later. Predicting these isn’t always possible, so having a small wealth on the savings account can really come in handy. It is always a better option than borrowing money from friends, family, or taking a bank loan.
5. Low life expenses
Let’s be realistic – it is always easy to save and invest money when you don’t have many expenses. Once you get older, you have to pay for rent, groceries, utilities, and so on, but these fees do not exist for teenagers. Surely, the funds they have at their disposal are also fairly low, but still, it is a great time to teach them the value of money and get them into the habit of investing. They don’t have to worry about paying the bills or what they will eat tomorrow.
Sure, they will have to make some sacrifices, such as not getting the latest iPhone as soon as it becomes available, but still, it will be significantly easier for them to get the hang of adult life and money-managing in this period of their life. They will soon adopt all of the above-mentioned spending and saving habits, and it will be much easier for them to adapt and overcome any challenges in the future.