Blog ai money gen 26

Teach Your Kids How to Save for Retirement

As adults, we know the younger you are when you begin retirement investing the more money you’ll have when it’s time to retire. However, most of us start investing too late to take full advantage of the time we have.

But what about your kids? How different could your kids’ future be if they understood how to build wealth before they even graduate high school? You can teach them by starting with simple concepts and building on them over time.

Start With the Basics

Teach your kids early about the connection between work and money. Even kids as young as three can earn money—and lots of praise—by doing simple jobs like picking up toys.

Older kids are ready for regular chores. When they work, they get paid. It’s as simple as that.

Help them learn to budget money with three simple categories: give, save and spend. With this foundation, they’ll learn how rewarding it is to set a savings goal and regularly put aside money to reach it—the basis for successful retirement investing!

Ny2013 bv budget1

Be a Good Example

From an early age, your kids will pay much more attention to what you do rather than what you say—and that goes for money matters as well. They need to see how living on a budget, avoiding debt, and consistent investing helps you achieve your financial goals, so include them in that process.

Even when your kids come down with a case of the “gimmes” (give me this, give me that), use the opportunity to talk about the importance of saving for the future. Explain that when you’re focused on reaching a goal like saving for retirement, you sometimes have to put off or even give up things (a new toy, video game or computer, for example).

If your kids can understand that “stuff” should never derail their commitment to a long-term goal, they’ll be way ahead of most adults when it comes to retirement investing.

On to Bigger and Better Things

With their strong saving habits and some experience managing their own money, your kids will soon be ready to learn how to invest for retirement. Involve them in this process by discussing your investing plan and explaining how long-term mutual fund investing is the best way to build wealth for retirement.

This is also the perfect time to introduce your older kids to the Ben and Arthur chart (see chart below) that shows how early investing can have a huge impact on how much money they’ll be able to accumulate over their lifetimes. If your kids have an earned income, they can even begin investing in a Roth IRA with their own money.

An investing advisor, one with the heart of a teacher, can help you explain these concepts to your kids and even show them how to get started with their own investing plan. Together, you and your kids can change your family tree forever!

You can find a trustworthy advisor through Dave’s nationwide network of investing Endorsed Local Providers (ELPs). Find your ELP today.
 

http://a248.e.akamai.net/f/1611/26335/9h/dramsey.download.akamai.com/23572/daveramsey.com/media/common_images/article_images/bvs/bvs_benarthur.jpg

More from the Blog

Fall Fun for the Budget-Conscious Family

Since Dave Ramsey’s Facebook fans always have great ideas to share, we asked them how they enjoy fall activities without spending a fortune.

5 Leadership Lessons From Football Coaches

Some of the greatest leaders you’ll ever meet are football coaches. Here's a list of our top five.

Everything You Need to Know About Money in 20 Quick Tips

When it comes to money, we can all benefit from a few quick tips. Check out these 20 quick money lessons that might just transform your life.

7 Life Lessons from Truett Cathy

In honor of Truett Cathy’s life, here are seven principles he consistently demonstrated through the years—guidelines that will work in making a living and in building a life.

One Mom’s Secret to Paying Cash for a Home

Fourteen years ago, Lorena Mejia was a single mom working three jobs a day to pay a mortgage she could barely afford. Today, she’s the proud owner of a four-bedroom home she paid cash for.

6 Tactics of a Used Car Salesman

What are some of the most common sales tactics used on a car lot today? Learn how you can avoid these strategies and drive away with a car that fits your family and your budget.