#TBT: How to Teach Your Kids About ESG Investing
Those who are looking to educate themselves on the importance of ESG investing might do well to look into explaining it to their kids too. Parents have the greatest influence on their children's financial knowledge -- more than any work situation or high school could ever teach them. The important thing to remember is that children and teens connect well with creativity, excitement and new things. If all you do is lecture them on the importance of money and budgets etc. you'll get yawns and eye rolls.
That's why when it comes to explaining finances, it helps to talk about the big picture, this includes talking about impact investing for the future and instilling this passion in kids as early as possible. As they've been saying for generations: children are the future.
This article was inspired by a piece on Investopedia, so be sure to visit their site to learn even more cool ways to get kids interested in finances.
1) Encourage Children to Invest in Things They Like
And I'm not talking about investing in a million fidget spinners. First ask them what they like buying and why; here is where the 'why' component is most important. Millennials like investing in companies with important social missions, such as H&M's clothing recycling project or One World Play Project's mission to donate soccer balls to underprivileged communities around the world. Your kids should understand just how privileged they really are, and it's up to you to show them ways in which buying the things they like can make a positive impact on other people around the world.
2) Understand That Money Doesn't Grow on Trees
My parents told me this plenty of times, and as much as I wanted to believe they were wrong, they were in fact correct. Teaching your kids how to budget and be financially savvy early will provide them with invaluable skills later in life. Even little everyday things like shopping for groceries or making car payments can be a valuable teaching moment. If kids are even more interested, ask them to think about the far reaching aspects of money. For instance, if you're paying an insurance company, ask them to research charities or positive events hosted or sponsored by that company.
3) Teach Children About The Importance of Small Businesses
Do you remember a favorite place your parents always took you to as a kid in your hometown? Help your children re-live that feeling by talking about small businesses, what they mean to you and why they are so important to the economy. Explain to them that some people decide to leave companies to branch out on their own and ask if the kids have any hobbies or ideas about starting a business. How many items do they need to sell to make a profit? As more creative way is to let them sell what they can, and profit or loss explain how this works for a business. This will help them understand a) how hard small business owners have to work to keep up in the economy, and b) understand just how important these businesses are in keeping the 'corporate' out of communities. I grew up in rural Vermont, and that aspect is very important to the overall culture. It might not be the case in an urban environment, but children should understand that the health of all communities is very important.
To learn more about investing practices, be sure to check out Investopedia by CLICKING HERE!