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.

What Teens Should Understand First

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: Why Time Is Their Best Friend

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.

Risk and Reward

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.”

Diversification

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.”

What About Cryptocurrency?

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?

  • Like diving in the deep end without knowing how to swim
  • Like choosing your college by spinning a wheel
  • Like letting your little brother cut your hair because he “watched a YouTube video”

Silly? Yes. But they get the point. Crypto might be worth learning about, but it’s not the place to start.

How Teens Can Learn Investing Without a Real Account

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.

1. Use a Practice Trading App

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:

  • Investopedia Stock Simulator – Offers lessons and challenges built into the platform
  • Wall Street Survivor – Combines virtual trading with quizzes and tutorials
  • MarketWatch Virtual Stock Exchange – Great for friendly competitions between friends or family

These apps teach investing basics to kids in a hands-on, low-pressure way. No stress. No real losses.

2. Create a Fantasy Portfolio Together

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:

  • Why the price went up or down
  • What’s happening in the news
  • What they’d do differently next time

This keeps things real, without any money on the line.

3. Watch Shows and Videos That Make Investing Fun

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:

  • Biz Kid$ – A TV show that uses humor and real stories to teach money skills
  • Khan Academy: Personal Finance & Investing – Free, easy-to-follow lessons on stocks, risk, and interest
  • TeenVogue: Money & Finance – Surprisingly sharp personal finance content written with Gen Z and Gen Alpha in mind

Watch together and use it as a conversation starter. You might even learn something new yourself.

4. Play an Investing Game

Board games and card games can also teach real financial lessons. You just have to look at them a little differently.

  • Cashflow for Kids – Designed by Rich Dad Poor Dad author Robert Kiyosaki, it uses simple visuals and story-based play to teach complex ideas
  • The Stock Exchange Game – A family-friendly intro to how markets work
  • Bulls & Bears – Players buy and sell stocks from and to each other, learning concepts like IPOs, booms, busts, and economic cycles

When you make it fun, it stops feeling like a lesson—and starts feeling like something they enjoy coming back to.

Final Thoughts: Practice Builds Power

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.