Teach Children to Save & Invest

The financial bondage many in the body of Christ are experiencing has exposed the fact that Christians are as addicted to materialism as the rest of society. Of course this predicament is contrary to the Word of God that admonishes moderation in all things. As children are becoming consumers at younger ages, it is incumbent upon parents to guide them away from consumerism by teaching them to save and invest.

As soon as children understand money is a tool of exchange, it is time to teach the other side of the equation. Money has to be earned before it can be spent; and, some of it should be saved and invested. They are not too young to learn that ‘saving’ is for short-term goals and ‘investing’ for long-term goals.

The conflict of whether parents should save first for their retirement or their kids’ education can be converted into a teachable moment for parents and children. Parents can accept the fact that loans are not available for retirement, kids should not be over-burdened with student loans, and kids can begin saving for their own education. Money children receive as gifts, allowances and earnings can be divided between spending, saving, and investing. Teaching them to also donate builds moral character.

An easy and safe way for kids to begin saving is with Treasury savings bonds (Series EE/E) and Treasury notes (T-Notes). Both have 10-year maturity dates and pay a fixed rate of interest every six months until maturity. The minimum purchase price is $25 for EE/E bonds and $100 for T-Notes. The interest is low, but it doesn’t matter. Teaching a financial principle to live by – set goals and save and invest to achieve them – is more important for kids than the interest rate.

The earlier children are introduced to investing the better. Once an investment account has been set up, many public companies allow purchases of additional shares of stock with small amounts of cash and reinvested dividends. This method of purchase, known as “direct investing,” is more affordable because it bypasses broker commissions. According to The Money Paper, Inc.,  most companies that allow direct investing usually permit purchase of as little as just one share of stock to open an account.

Additionally, gifts of stock can provoke children’s interest in money matters. OneShare, a company that sells single shares of stock, packages stock certificates from hundreds of companies for gifting. The website allows you to search by company name, price, industry or popularity; and, stock certificates can be gift-packaged by occasion, recipient, or interest. The OneShare presentation makes the gift of stock fun and exciting for kids. However, stock can be purchased more cost-efficiently without all of OneShare’s extra offerings or from other sources.

Today’s mistakes should not be iniquity (illiteracy) visiting our children and children’s children; instead, resolve to change the financial destiny of future generations (Exodus 34:7; Genesis 45:7,11; Hosea 4:6; Col. 3:20).