How to teach your kids about investing

Looking for ways to raise money-savvy kids? Helping them build financial literacy early on is one of the best gifts you can give them – setting them up for future success. And the best part? Learning about money doesn’t have to be boring.

Here’s how you can make financial learning fun and accessible for kids of all ages.

Keep it age-appropriate

It’s never too early to introduce your children to concepts like saving, spending and investing. Just tailor your approach to their age and understanding:

Young children (ages 4-7): Start with the basics, like recognising coins and understanding the difference between ‘needs’ and ‘wants’. Simple activities like sorting coins or playing shop can make learning engaging.
Pre-teens (ages 8-12): Introduce the concept of compounding – how earning interest (or returns) on the interest from savings means their money can grow faster over time. A great analogy is planting a seed: in the first year, it grows a little. In the next year, it grows bigger, and then even more the following year. That’s because it’s not just the original seed growing, it’s the new growth building on itself, much like compounding works in investing.
Teenagers (ages 13+): Set up a small savings or mock investment account to show how investments grow over time.

Five fun money lesson ideas

Learning about money doesn’t have to be dull—here are six engaging activities to build financial skills, one fun step at a time.

1. The piggy bank game

Children love piggy banks, and they’re a perfect intro to saving. Help your child set a goal, like saving up for a favourite toy, and encourage them to put coins and small notes into their piggy bank regularly. For older kids, you can set up two piggy banks—one for short-term savings and another for long-term goals. You can even assign simple chores to earn pocket money: they’ll see that hard work helps them reach financial goals.

2. Needs vs wants with a family budget

Use your family’s budget to explain the difference between ‘needs’ (essentials like groceries) and ‘wants’ (fun extras like toys). To make it engaging, let you kids help decide on a ‘wish list’ item to save for as a family. This also ties into investing by showing that we allocate resources thoughtfully to meet both immediate needs and future goals.

3. Pretend play: running a business

Turn your living room into a pretend store or restaurant where kids act as business owners. They can set prices, make “sales” to family members, and manage their ‘profits.’ This teaches them that money is earned through effort, and businesses reinvest profits to grow – just like investors do!

4. Getting started with investing

When you think your child is ready, consider opening a KiwiSaver account to introduce them to investing. KiwiSaver accounts are generally free to open with no minimum balance, making them an easy way for children to start learning about long-term investing and financial growth.

Depending on the type of fund selected, KiwiSaver funds invest in a diversified mix of income and growth assets, including bonds, shares, and property. This helps spread risk while demonstrating how investments grow over time.

As your children get older and start working, they’ll also begin contributing a portion of their salary to their KiwiSaver savings – with additional contributions from their employer and the Government. And when the time comes, they may even use their savings to help fund a first-home deposit, giving them an early financial advantage.

5. Money jar investment game

This fun, hands-on activity is a great visual way to introduce the concept of diversification and long-term investing.

Set up different jars representing different types of investments like:

Shares and property (growth investments) – Higher potential returns but more volatility.

Bonds and term deposits (income investments) – Lower risk, steady returns.

Cash savings – The lowest-risk option, but with minimal growth.

Each week, give your child “money” (marbles or tokens) to distribute across the jars. Over time, add more marbles to represent investment growth: some jars will grow faster, while others grow steadily.

Once they’ve mastered these concepts, you can introduce more advanced investment principles:

Long-term growth and compounding – Let them see how the growth jar (shares and property) grows faster over time, but only if they leave the marbles in for long enough. Explain that investing in growth assets requires at least 7–10 years to fully benefit from compounding, where returns generate more returns over time.
Different investments serve different purposes – Some investments are better for short-term security, while others are designed for long-term wealth building. To explain this, the cash savings jar stays stable but grows very slowly, showing that while it’s useful for short-term needs, it doesn’t offer much long-term reward. In contrast, the growth investments jar fluctuates but builds up more over time, illustrating why different investments serve different goals.
Diversification spreads out risk – If they put all their marbles in just one jar, their growth depends entirely on that investment. By spreading them across different jars, they learn that diversification helps reduce risk and balance returns.
Market volatility – Instead of adding marbles every round, sometimes add more marbles than expected, fewer marbles, or even none at all to the growth jar. Explain that investments don’t grow at the same rate every year—some years they grow a lot, some years a little, and some years not at all. This helps show that market fluctuations are normal, but over long periods, investments tend to grow overall. You should even discuss how they would feel if you took one-fifth (20%) of the marbles away, if we think that the jar will grow the most over the long term.
Inflation – Every few rounds, remove a marble from the cash savings jar to represent the effect of inflation. Explain that money loses purchasing power over time if it’s not invested, which is why simply keeping all savings in cash is unlikely to be the best long-term strategy.

Ready to start teaching?

Introducing kids to financial concepts now can empower them to make smart choices as adults. Try these fun activities, and make financial discussions part of everyday life.
At Invest Link, we’re here to support your family’s financial journey. Reach out to us if you have any questions – big or small.

Disclaimer: The information provided in this article is intended for general informational purposes only and does not constitute financial advice. Every individual’s financial situation is unique, and financial decisions should be made based on your specific circumstances and goals. We recommend consulting with a qualified financial adviser before making any investment, insurance, or mortgage-related decisions. Mortgage Link, Insurance Link, Invest Link, and FG Link are part of the Link Financial Group, offering tailored advice and services to help you achieve your financial goals.