Our five-year-old receives an allowance of $5 per week to complete his chores. His chores include making his bed, feeding the cats, and cleaning his room. Every day that he doesn’t complete a chore he is supposed to lose one dollar.
There are other days when we ask him to feed the cats and if he refuses we end up taking a dollar away. The point isn’t to strictly enforce the process at this point. It’s more to help him make the connection between doing work and making money.
At the end of each week, he puts $3 in the spending jar, $1 in the investing jar, and $1 in the giving jar. The jars are made of clear plastic so he can see the money adding up. At this pace, it may take him a while to save up for a $300 Nintendo Switch, but with a birthday coming up he’s planning to ask all of his family and friends for money to put towards his goal.
Before our oldest had a savings goal of an expensive Nintendo Switch, his birthday and Christmas money would add up to a relatively meaningful sum of money. Every year we have purchased a share of stock or two.
We ended up purchasing two individual stocks via the Robinhood app with his savings. This wasn’t his decision, but he also didn’t push back against the decision. Honestly, I’m not sure he knew exactly what we were talking about. The Robinhood app was surprisingly easy to set up, and even easier to purchase the individual stocks.
I don’t think he is anywhere near ready to fully grasp the concept of stocks. However, I do sometimes make comments such as, “you are a part owner of Under Armor”. In time, hopefully these comments will start to make more sense allowing him to make the connection between everyday products and the stock market.