Teenagers and planning
Talking with your child about money can go smoother if you keep the conversation age appropriate. The conversation starters and activities here can help you find the words.
Conversations about planning
“You can save up for short-term goals, and you may want to invest money to achieve long-term goals.”
- Your child should think of a short-term goal as something he wants within the next year or two. Savings accounts are safe and help your child feel sure the money will be there when he needs it.
- Long-term usually refers to something that is more than five years away, like buying a first home or eventually retiring. Investments can give your child’s money more power to grow and compound over the long term, but there’s risk of losing money. The SEC offers .
- Ask your child to think about goals. Attending college? Purchasing a car in the next couple years? Moving to a new city? Buying a home sometime later in life? Define two financial goals for the long-term future, and help your child plan a few steps to help achieve them.
- Explain that IRAs and 401(k)s are ways to save up money for the far future, and the earlier your child can start saving, the more powerful these accounts can be.