Show Teens The Top Of the Stock Market

The stock market can be a mighty dry topic for teens. That’s a shame, because jumping in early is a huge advantage.

So, you’ll need a compelling hook to capture attention and make your key points stick. Points like: don’t miss out by trying to time the market.

Try this clever teaching prop. It’s a picture of the history of the “top” of the market. It’s a classic I see floating around the Internet periodically in one form or another.

Visual. Amusing. Instructive. A teen teaching trifecta!

This picture makes it pretty darn clear that nobody knows for sure when the top of the market will come.

And even if this is the top of the market now, the odds are pretty darn good it won’t be down the road. Like decades from now when your teenager is 59 and a half.

You know, the age your teen will start selling off those index funds in that killer Roth IRA you set up.

Wait, what? You’ve been holding off on plunking your teen’s Roth contributions into an index fund? Well, it would be dumb to start Junior off at the top of the market, right?

Study that picture again.

Whether the market is at the top, the bottom, or somewhere in between, just jump in. And keep jumping in year after year.

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Get Real Family Finance Tips From These Five Finalists

Tired of reading the same old puff pieces on kids and money in the mainstream media? Instead of boring platitudes from “experts” (some of whom haven’t even raised kids!), how about some real insights from real parents in the new media trenches?

Start with these five Family Finance finalists for this year’s Plutus Awards for independent financial publishers. I’ve picked a representative post or podcast from each to help you dive in:

1. Chief Mom Officer: Cell Phone For Kids — Why My Kids Don’t Have One (And a Tell-All Interview).

   Does your kid need a cell phone? Would you cover its cost? Most parents answer “yes” and “yes” — especially by the time a kid is 12. Not Chief Mom Officer. She and her kids (10 and 14) challenge the new normal. Find out why going against the grain might make sense in your family too. Whether you agree or not, there’s plenty of good food for thought here.

2. Montana Money Adventures: 3 by 3: Minimalism with Kids.

   Ms. Montana describes a clever toy rotation scheme for encouraging moderation in younger kids. The year long experiment has helped her kids derive more joy from less, lengthen their attention spans, increase creativity, decrease fighting, and reduce clutter. They’ve become mini minimalists. Sound like magic? See how she did it.

3. Mama Fish Saves: Why Tough Summer Jobs Beat Summer School For Teens.

   After reading this, you’ll want to ship your kids off to a tobacco farm instead of summer school. Well, maybe. Chelsea shares five important life lessons she learned working long, tough hours during the summer. Every kid could benefit from a session at the School of Hard Knocks. See why you might want to enroll your teen next summer.

4. Couple Money: 4 Ways Parents Can Teach Their Kids About Money.

   Elle hosts one of the few podcasts squarely focused on family finances. Her episode with yours truly is a good place to start your binge listening streak. Naturally, we discuss teaching kids good money habits. Listen in as we share our favorite systems, tips, and stories.

5. Catherine Alford: Reflections on 7 Years of Blogging & Turning 30!

   Wrangling kids. Agonizing between building out a risky but flexible home-based side hustle versus returning to the steady but inflexible 9 to 5. Holding down the home fort while your partner slogs through long hours at a demanding workplace. Wrestling with health issues. Balancing it all through midlife can be pretty overwhelming. Impersonal self-help platitudes from main stream media aren’t worth much. Real stories from real people like Cat might just be the gold you’re looking for. Plus, you can actually talk to her in the comments. Bonus.

So, if you really want to learn more about family finance, skip the mainstream puff and pick the independent plums. More educational. Less boring.

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Shell Out Parent-Paid Interest To Encourage Saving

You’ve already heard me harp on the virtues of aggressive parent-paid interest. (If not, see here.) It’s my favorite technique for getting kids fired up about saving and thinking twice about spending: “Look at that sweet interest deposit I just got on my card! I’m going to build up my balance so I can earn even more.” Music to my ears.

I decided to run some numbers on our family finance site today to see just how much interest parents are shelling out in a typical month.

Last month, kids who received parent paid interest on their prepaid cards earned an average of $3.74. Nice! Infinitely more motivating than a traditional savings account.

One kid raked in a whopping $60. How? The kid’s parents offer a super sweet deal: 1% of the the current card balance per week capped at a maximum payout of $12. Now that’s aggressive! The kid bagged 5 maximum payments in the month because September had 5 Saturdays this year. Bonus!

OK, so $60 a month is over the top for most families, but $3.74 isn’t.

That steady drumbeat of encouraging text messages just might cement a lifelong savings habit.

Worth a try, don’t you think?

Here’s the discouraging news: only 4.3% of the kids using our cards in September earned parent-paid interest.

So, here I am harping on it again. Time to step up and shell out, parents.

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