For Kids

Home » Kids

How to Learn About Investing for Kids

Bulls? Bears? Markets? Oh my! Investing doesn’t have to be scary. Here’s how to build smart investing habits.


Did you know that you can use the money you have now to have more money in the future? Sounds awesome, right?! It’s called investing, and it’s something you can start doing even when you’re still a kid. All you have to do is start learning about it now and put your knowledge into action.

We’ve put together some simple tips to help you learn everything about investing. But, as always, we’re keeping it fun for you! 

While you read up on investing, keep in mind that you’re not too young to put your money to work for you. The sooner you start, the more time your money has to grow! So, why not start learning all about it today? 

Why Investing Is Important

Do you ever think about what would be exciting and important for you to have in the future? Owning a home, traveling the world, or having money for your college education are all amazing goals to have. And investing is a great tool to help you accomplish those dreams.

Fun tip: When you start setting your goals, why not think of it as a wish list! Grab a piece of paper and write down all the things you would love to have in the future.

How to Invest Money as a Kid

It’s great that you’ve started to think of your goals for the future. Now, it’s time to take the first steps to get you closer to those dreams. And by the first step, we mean saving.

Before we continue, it’s important to point out that saving and investing are not the same thing. But before you can invest, you need to set money aside. This is where savings enter the picture.

Saving Money

A good way to start saving is to split the money you make through your chores or jobs into two categories: spending and saving. This way, you’ll be able to keep some of your money to buy the things you want. Some of these wants could be ice cream, toys, or video games.

Wondering how you should divide your money? That’s up to you. All we can say about this is remember to always put some money aside for your goals. If you spend most of it today, you won’t have that much left to make your dreams happen. 

So, get creative and make your own piggy bank where you can stash your money! This will make savings extra exciting. Look for items that you have around your home (like jars, cans, or cardboard boxes) and decorate them with markers, glitter, and wrapping paper! The key here is to give your piggy bank loads of personality and make it attractive to put money in there.

Saving Money in the Bank

The most simple way to make your money grow is by depositing the savings from your piggy bank into a savings account at the bank. 

When you put money in a savings account, you get paid extra money, called “interest.” The longer you leave the money in the bank, the more interest you earn. You can think of it as a small reward for saving – but the keyword here is small. 

Because traditional savings accounts don’t pay a lot of interest, they’re not considered an investment. They’re an excellent option for you to keep your emergency money or if you’re setting money aside to buy a new tablet in a few months. If you want to invest funds, the stock market is a good place to start.

Investing Money in the Stock Market

A common way to make your money grow more than in a savings account is by investing in the stock market. Basically, this means buying stocks, which are pieces of paper (real or virtual) that give you a piece of ownership of a company. 

People who buy stocks are one of the company’s owners and are called shareholders. If you’re a shareholder, you make money by selling the stock at a higher price than you bought it for. 

But unlike saving, investing comes with risks. People buy the stocks they think will make them more money. However, there’s no guarantee that the stock price will actually go up.

For example, imagine you love playing Nintendo, and you think it’s a great company to invest in. After playing their games for a long time and hearing how much all your friends love their Nintendo Switch, you decide to buy one of their stocks for $60. After one month, Nintendo launches a new game.

At this point, things can go two ways:

  1. Kids like you get very excited about the new game and everyone buys it. Nintendo makes lots of money and the stock price goes up to $100. If you sell the stock that cost you $60 at the new price of $100, you would earn a profit of $40.


  1. Kids get very excited about the new game but when they play it, they realize it’s not so great. The game gets bad reviews and kids stop buying it. Nintendo loses big time. People start selling their Nintendo stocks and this makes the price go down to $40. If you sell your stock, you would lose $20 because you paid $60 for it and sold it for just $40.

As you can see, stock prices can go up and down. You can either win or lose the money you invested as this happens. But this doesn’t mean you shouldn’t invest. It just means you need to learn about the market and research the stocks you choose before investing any money.

Luckily for you, there are online stock market simulators where you can practice investing without the risk of losing real money! Talk to your parents about these simulators and, with their permission, you can start practicing what it’s like to trade.

Getting your Family Involved

Parents and grandparents are happy to help you start investing your money most of the time. Talk to them about your goals and dreams for the future. Share your plan for saving money and tell them how you plan to make your money grow. Your family will be proud to see how far you’ve come!  

Here’s another great idea: how about asking your family to try the stock market simulator with you? It could be super fun, right? You could each choose your own stocks, decide how much you “invest” in each company, and see how your picks perform. After doing this for a while, sit down to look at what caused some stocks to go up in value and why others had a drop in their prices.

Opening a Real Investing Account 

Once you’ve saved some money and feel comfortable enough with the basics of investing, you could talk to your parents about the possibility of opening a brokerage account. This type of account allows kids to start investing in the real stock market. They also offer online investment education for kids so you can continue learning how to invest like a pro.

Since you’re a kid, the brokerage account has to be set up and managed by an adult. This is great because it’s a chance for you and your parents to talk about what you’ll invest in and learn together. Once you’re older, you could take full control of the account.

Another option for investing is to find a financial advisor who helps manage your money and works to choose the right investments for you. This is a good way to get professional advice while still learning about the stock market and putting your money to work.

Deciding What to Invest In 

When you start investing, it’s important to buy stocks of companies that you like and understand how they work. Are there products that you love using or are curious about? Do you like some brands better than others? Then these companies could be a good place to start your research.

It’s also a good idea to ask your family to help you look up stock prices and the history of these companies. Don’t be shy to bring them on board! Once you and your family have chosen the company you’d like to invest in, ask your parents if you can buy one individual stock. Then, you can have weekly family meetings to see how your investment is doing.

Is the stock price increasing or decreasing? Why do you think the stock prices are moving? Can you make predictions on what will happen to these prices over the next months or years? Checking on your investment with your family will allow you to continue learning and become a more informed investor in the future.

If you have a financial advisor, these are good conversations to have with them. You can still check your account regularly and set up annual meetings to revisit your money goals.

Learning What Not to Do

Managing your risk is an important part of investing. Here’s a list of things that you should not do to help you get the results you’re looking for:

  • Don’t invest in companies that you don’t understand
  • Don’t buy stocks of companies that you feel “in love” with
  • Don’t expect results right away
  • Don’t put all your eggs in one basket

Investing Definitions 

Here’s some financial language that every kid investor should know:

  • Brokerage Account: An account that you open to invest your money in the stock market.
  • Diversification: Investing in a variety of companies and securities to lower your risk and have more options.
  • Interest: Money that you earn when you invest or lend funds to someone else. If you borrow money from others, you are the one who has to pay interest.
  • Opportunity Cost: Every time you decide to spend money on something, you are choosing not to spend it on something else. This tradeoff is known as opportunity cost.
  • Savings Account: A bank account where you set money aside for emergencies, special purchases, or to earn a small amount of interest.

Books and Other Resources to Learn About Investing Money

Ready to learn more about investing? Check out these books and games, perfect for kids just like you! They make learning fun and can help you get started in your investments. Check out our complete list of investing books for kids for more book recommendations!

Books for Kids Ages 6-8

Investing For Kids is full of advice and examples for investing your money on your future education and other important goals!

In The Steady Road to a Million Dollars (Bradley Jr’s Investing Adventures), Bradley starts learning to invest his money smartly and make the most out of it. You’ll go on fun adventures with him, have a good time, and learn to invest every step of the way!

Books for Kids Ages 9-12

I’m A Shareholder Kit: The Basics About Stocks will walk you through the basics of investing. Plus, you even get a $20 discount on a share of stock! Now that’s a good deal. You can pick a stock from a company that you like and get hands-on experience of being a shareholder!

With Growing Money: A Complete Investing Guide for Kids, you’ll learn all about savings accounts, bonds, stocks, and mutual funds. It comes with sheets to set up an investment game to play with family and friends. It’s a fun way to start practicing investing right at home.

Online Games

Love video games? Most kids your age do. That’s why it’s so much fun to play these games while you learn about investing:

Whether you want to play with friends or on your own, The Stock Market Game will teach you all about investing and how you may get your money to work for you!

In How the Market Works, you’ll receive $100,000 in virtual cash to start learning how the stock market works and practice trading!

With so many tools for kids like you, learning about investing is more fun than ever. Remember, you can start slow and gain experience as you go along. By the time you’re an adult, this will allow you to be an expert, and you might even have a good amount of money in your brokerage account!

Related Reading

About the Author

Lucia Caldera

Lucia Caldera is a writer who specializes in personal finance. Her goal is to create approachable content that sparks financial wellness and unlocks personal growth. Lucia's work reflects her passion for financial education as the key to reducing the wealth gap for future generations.

Last updated on: May 10, 2024