Educate them on compound interest
The goal of this lesson is to give our kids a firm understanding of what compound interest is, and why it is important—namely because inflation ends up ravaging one’s purchasing power. One dollar stashed under the mattress, is not worth one dollar ten years from now. In fact, it’s a lot less. People who understand compound interest are motivated to develop the habit of saving—which is exactly where you want your child to be. And, this all begins with helping your kids understand the concept of compound interest.
1) READ THE CHAPTER
For information and a deeper dive into having money talks with your kids. Read the chapter with relevant financial literature to give you a sufficient foundation on the topic. Order your copy of the book below.
2) LISTEN TO THE PODCAST
Listen to this lesson’s episode where I’ll walk you through the questions to ask your kids during the conversation as well as the likely responses you’ll hear from them.
3) SEND THE TIKTOK
Send this video to your child, so you can set the stage for the topic you’ll be discussing, in a language they understand.
@totalcents Those who understand interest earn it. Those who dont, pay it. #protectyourwealth #moneytalks #financialliteracy #finance #moneytok #learnitontiktok #personalfinance #compoundinterest #interest #compoundinterestgrowth ♬ Spring – Aesthetic Sounds
4) HAVE THE MONEY CONVERSATION
Using your printed one-page conversation guide and enjoy the dialogue with your family to get them financially launched. Now’s the time to discuss and start the conversation.
Additional Lesson Resources
- Khan Academy Inflation
- RoosterMoney: Inflation