Let’s face it, money doesn’t come with a manual. And most high schools don’t cover topics like compound interest or the stock market. So when your teen starts earning money, they may have questions you didn’t expect.
Teaching your teen how investing works gives them a head start on building healthy money habits. They’ll learn how to make informed decisions, manage risk, and think long-term—skills that matter way beyond their bank account.
And here’s the best part: they don’t need to have their first paycheck or a brokerage account to get started. They just need your guidance and a few simple tools.
Here are few basics you’ll want to discuss. Once they have a handle on them, they’re ready to dive into games, practice apps, videos, and more.
Compound interest is what happens when money earns money—and then that money earns more money. You can explain it like this:
“If you invest $100 and it earns 7% a year, in 10 years you’ll have around $200 without doing anything else.”
That’s the power of starting young. The earlier they begin, the more time their money has to grow.
Investing isn’t just about making money—it’s about managing risk. The bigger the potential reward, the bigger the risk. Kids should understand that it’s normal for investments to go up and down.
“Investing is a bit like riding a roller coaster. The bigger the thrill, the steeper the drops. Sometimes the zero-G rolls and loops are fun, but nobody’s gotten sick on a teacup ride.”
Putting all your money in one stock? Risky. Spreading it out across different types of investments? Much safer.
You can compare it to this:
“If one of your favorite bands cancels their tour, you’re bummed. But if you’ve got tickets to five different concerts, you’ve still got a good summer.”
Your teenager has probably heard of Bitcoin, Ethereum—or some coin with a weird name like “Hawk Tuah.” And chances are, someone on social media made it sound like a one-way ticket to being rich by age 20.
Here’s what to say:
“Crypto is like buying a used car without a test drive. It might work great… or it might break down the minute you leave the lot.”
Other ways to describe crypto risk?
Silly? Yes. But they get the point. Crypto might be worth learning about, but it’s not the place to start.
If you’re not ready to open a custodial or joint investment account yet, don’t worry. There are plenty of ways for your child to build knowledge and confidence without risking real money.
Think of these like investing video games—but with real market data.
Paper trading apps let teenagers “invest” pretend money in real-time markets. They’ll see what happens when stocks go up or down, how companies respond to news, and how their decisions play out over time.
Top picks include:
These apps teach investing basics to kids in a hands-on, low-pressure way. No stress. No real losses.
You don’t need an app to start investing practice. Just grab a notebook or spreadsheet and ask your teen to choose five companies they like. They’ll stay interested if they’re looking at brands that they wear, watch, or use every day.
Track those stocks over time. Once a week, sit down and check how they’re doing. Talk about:
This keeps things real, without any money on the line.
Investing doesn’t have to be boring. There are shows, videos, and even social media accounts that explain money in ways teens actually enjoy.
Try these:
Watch together and use it as a conversation starter. You might even learn something new yourself.
Board games and card games can also teach real financial lessons. You just have to look at them a little differently.
When you make it fun, it stops feeling like a lesson—and starts feeling like something they enjoy coming back to.
Helping your child understand investing isn’t about finding the next big stock or opening an account tomorrow. It’s about starting small, asking questions, and making investing feel normal, not scary.
The best part? You don’t need a finance degree. You just need a little time and a willingness to learn together.
Start with practice. Laugh at the mistakes. Celebrate the wins. And remind them: it’s not about jumping in first— it’s about knowing where you’ll land.
Be aware of new spoofing scam which involves scammers imitating legitimate phone numbers that are readily available online. 1st Source Bank will never ask you for your username, password, or 6-digit verification code. We advise you not to give this information to anyone even if it appears to be a legitimate request from a known phone number.
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