No school is going to teach your children about personal finance so it’s up to you to make sure they learn how to handle money.
Investing. Using money from birthday or holiday gifts, children can buy stocks in companies they’ll recognize, such as Nike and McDonald’s. As shareholders, they’ll get reports from the companies that will help them understand how the economy works. Once your children are old enough, let them help you decide which stocks to select for your own portfolio.
Taxes. Your children may have to submit tax returns if they have a certain amount of investment or earned income. When they’re teenagers, have them prepare their own tax returns. You should check it over and show it to your tax preparer as well, before sending it to the IRS, but going through the tax form can be a valuable lesson.
Communication. Talk about financial matters at home. Let your children know how much college costs. Explain how you’re investing for retirement. If you meet with a financial advisor, take your children along to get some idea of what you’re discussing. The sooner they understand that having money is a responsibility, the better the chance they’ll avoid serious mistakes when they get some of their own.
