Teaching Your Teenage Children about Personal Finance and Finding the Best CD Rates
Taking a child money skills and start earlier than teenage years and the earlier you start the better off your children will be about managing expenses and saving money. Teaching them about investing and risks involved when investing in assets that put principal at risk is another must.
For starters don't have them invest in stocks or mutual funds, just stick with certificates of deposit or savings account. Granted the returns on all interest bearing assets are low these days since CD rates and savings rates are near record lows but at least your child's principal won't be at risk.
Image learning how to do with out things, save money and then lose that money in equities, not a pleasant way to start investing. Make sure to open a deposit account, savings account or certificate of deposit, that has one of the highest interest rates available to maximize earnings through compound interest.
The best CD rates right now on 1 year bank certificates of deposit are at 1.04 percent. You can open a longer term CD account but the highest CD rates on 5 year certificates of deposit are below 2.00 percent. There are many different ways to go about finding the best CD rates but the easiest way is online. You can find the highest bank CD rates by searching online at one of many bank rate aggregator websites.
Children learn about good money habits from their parents and earlier they lean good habits the more money they can save growing up. It might seem daunting thinking of talking to a child about money, especially if you don't have good habits about saving and managing money. If you are one of these people start a savings plan for yourself as well when you start talking to your child about a plan.
Be warned, your child will probably ask you questions that might make you feel uncomfortable. You probably won't be comfortable sharing all your financial information with your child, you don't have to. Just decide before talking to them what you want to tell them and how much details you will provide on your situations as examples.
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