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A Kid’s Guide To Growing Money

Apr 05, 2023 Family & Finances

While savings accounts are a great tool for growing your money, investments can help grow your money even more. See how they compare.

A boy sitting at a desk and watching a cartoon

April is Youth Financial Literacy Month and to celebrate we’re sharing resources and activities you can use to help guide the children in your life – no matter their learning style. Below you’ll find a video to watch, article to read, questions to discuss, and links to a related comic and activity sheet.

Investing Can Be Rewarding, But It’s Also Risky

A savings account is a great place to store your money when you’re starting out. It’s safe and it pays a little interest – but it won’t make you rich! In order to grow your money, it’s best to move some of it into investments with a higher rate of return.

In fact, many financial experts suggest that your money should be growing somewhere between 5% and 10% per year. You won’t get that from a savings account these days.

Just compare $100 in a savings account earning 1% interest per year with an investment earning 5% per year and another earning 10% per year.

At 1% interest, you earn just a few pennies per year. After 20 years, you earn only $20. With a 5% return, you more than double your money to $271.85. And with a 10% return, your money grows more than seven times to $738.70!

One thing to note, however, is investments aren’t insured like your savings account. You take the risk of losing everything if your investment becomes less valuable.

A woman with a child on her shoulders, another woman is talking to them.
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Questions To Discuss

  1. Would you rather know that your money is safe while it grows a little bit, or would you be OK with taking a risk while your money possibly grows a lot?
  2. Are you willing to put a portion of your savings away for a long time to watch it grow?
  3. Is there a company or product that you would like to invest your money in?

Continue The Conversation

Activity Sheet

Comic Strip

Two young girls playing on a playground.
Life Guidance for:

Raising Money-Smart Kids

Talking to kids about money is not only acceptable but also encouraged. Use our tips to help your child understand and practice age-appropriate money management skills.

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