Kids Grow Up Without Understanding Money
We all want to see our kids grow into successful, financially savvy adults. But here’s the problem—most children are never taught how money works. They don’t learn about investing in school, and many parents struggle to explain it in a way that’s engaging.
So, what happens? They grow up thinking money is just something you earn and spend. They don’t understand how to make it work for them. They don’t grasp the concept of compound interest, or why starting early can set them up for life and by the time they realize they need financial literacy, they’re already behind.
The good news? You don’t need a finance degree to teach your kids about money. You just need the right approach—one that makes learning fun, simple, and practical.
Make Learning About Investments a Game
The best way to teach kids anything is through play and real-world experiences. Instead of sitting them down for a lecture on stocks and mutual funds, why not turn investing into something they’ll enjoy?
Here are five fun, hands-on ways to teach your children about money and investing this March:
1. The Lemonade Stand Investment Lesson
Why It Works:
A lemonade stand isn’t just a fun summer activity—it’s a mini business. And every business needs an investment to get started. This is the perfect way to teach your kids about putting money in and getting money out.
How to Do It:
-
Give your child a small amount of “seed money” to buy supplies (lemons, sugar, cups, etc.).
-
Have them calculate the total cost and decide on a price per cup.
-
Teach them about profits, reinvesting, and expenses (maybe they hire a sibling to help!).
-
Once they make money, show them how they can reinvest some of it in a better stand or save it for a bigger goal.
Lesson Learned:
They’ll see firsthand how money can grow when used wisely, and they’ll understand the concept of investing in a business. Learn more about teaching kids entrepreneurship.
2. Stock Market Fantasy League
Why It Works:
Kids love competition, and turning investing into a game makes it exciting. The stock market can be confusing, but when kids get to “own” their favorite brands, they pay attention.
How to Do It:
-
Let each child “invest” $1,000 in imaginary money in real stocks.
-
They pick companies they know—Disney, Apple, Nike, or even their favorite cereal brand.
-
Track the stock values weekly and discuss why they went up or down.
-
Reward the best-performing investor with a small prize.
Lesson Learned:
They’ll start to understand how companies make money and why some investments perform better than others. Check out this beginner’s guide to investing.
3. The Compound Interest Ice Cream Challenge
Why It Works:
The concept of compound interest is one of the most powerful lessons in investing. But let’s be honest—it can be a little boring. Turning it into an ice cream challenge makes it deliciously fun.
How to Do It:
-
Give your child $1 today and tell them they can buy a small ice cream cone.
-
Offer them a deal: If they wait one day, the money “grows” to $1.10.
-
If they wait another day, it grows even more.
-
Keep doubling the interest rate and see how long they hold out before spending.
Lesson Learned:
Patience pays off! They’ll grasp that money can grow over time if they let it sit and accumulate interest, just like in a savings or investment account. Learn how compound interest works.
4. The Real Estate Monopoly Game
Why It Works:
Most people’s wealth comes from owning assets like real estate. Monopoly is already a classic game, but with a few tweaks, it becomes a powerful lesson in smart investing.
How to Do It:
-
Play Monopoly with a twist: Instead of focusing on winning, focus on strategy.
-
Teach your kids about cash flow—properties with rent are better than just holding cash.
-
Show them the difference between buying cheap properties that don’t generate much versus premium locations that bring in big rent.
-
At the end of the game, discuss how these principles apply in the real world.
Lesson Learned:
They’ll understand that assets—things that make you money—are better than liabilities, which just take money away. Read more about real estate investing.
5. Kid-Friendly Crypto Exploration
Why It Works:
Cryptocurrency is the future of money, and whether we like it or not, it’s here to stay. Teaching kids about digital assets early will prepare them for the financial world of tomorrow.
How to Do It:
-
Explain how Bitcoin works using digital trading cards or video game currency as an analogy.
-
Set up a small crypto wallet together and give them a tiny amount of cryptocurrency to track.
-
Talk about how digital money is different from traditional cash and what makes it valuable.
Lesson Learned:
They’ll develop an early awareness of how digital money works, which will be a critical skill in the future economy. Check out this beginner’s guide to cryptocurrency.
Bonus: Open an Investment Account for Your Child
Once your child starts to understand the basics of investing, take the next step and open a real investment account for them. Here are some great options:
-
Custodial Roth IRA (if they have earned income) Learn more
-
529 College Savings Plan Read about 529 plans
-
UTMA/UGMA Custodial Investment Accounts More info here
This makes the lessons real and tangible. They’ll get to watch their money grow over time, reinforcing everything they’ve learned.
Final Thought: Make Money Lessons a Habit
The best financial lessons aren’t one-time events—they’re ongoing conversations. Use everyday moments to talk about money, whether it’s at the grocery store, during a family vacation, or when they get birthday money.
And here’s the most important part: Lead by example. If your kids see you investing wisely, they’ll be more likely to follow in your footsteps.
March is the perfect time to start these money lessons. With fun games and real-life experiences, you can set your child up for financial success while making memories together.
