I was thinking of doing something for my kids when they start working to help them save for the future. Like tell the to pay me like $20 or something each week and I Match it and invest it over time. I was thinking like 20+ years or more. So any good idea that guys have done for four/with your Kids? What’s a good long term
Investment like this
What would you do for your kids to start them off when they start working to help them out when they are older.
byu/Limit54 ininvesting
Posted by Limit54
9 Comments
Do what you can to help them max their IRA’s the moment they have taxable income.
If they have earned income, you can do a custodial Roth IRA, you’ll be jump starting their retirement. But yeah mimicking a match would be big motivation for them I think.
They are in a low tax bracket at the beginning. Open a Roth IRA, and max it out each year when they have small earnings. Because it is taxed before going in, then not taxed coming out, the investment takes advantage of the lower tax bracket.
If you want to help your kids, teach them basic finance. Show them how you do your budgeting, how you pay your bills, how you manage your investments. Teach them how to be smart shoppers, looking for good prices and deals for things. Stress the importance of saving money.
After all of that, I really like the idea of offering to match their savings. Give them some incentive to save money.
I know quite a few people who got windfalls as young adults and blew it all, so just setting them up to have a lot of money isn’t really ideal – you need to teach them how to handle money first.
Just help them learn to invest early. If you have substantial means then help them max their Roth IRA yearly to start with a non-taxable gift of $7500 ( or whatever the new limit may be)
So you think your kids would willingly give you $20 a week, that you gave them? Unless you’re giving your children hundreds of dollars every week, $20 is a lot of money to a kid. Are you going to cover all their other discretionary expenses to encourage them to save? Because kids will most likely buy things to keep up with their friends than save. For example, are you going to buy them smart phones or make them save up to buy one? If it’s the latter then you are never gonna get your kids to give up having a smart phone to save and invest into something they don’t understand, than miss out on tiktok.
I think you’re better off just saving for their college and teach them personal finance when the time is right.
Teach them how to live within their means and invest their savings. Show them different investment options to make their savings grwo.
The millionaire next door:
>Economic Outpatient Care (EOC) is a term used to express when an affluent parent provides money to an adult child
>These offspring … consume the EOC rather than invest it. If a dose of EOC is given on a regular basis, the EOC can actually be absorbed into the individual’s perceived annual income. Expenditures are then calculated with the anticipation of a regularly scheduled dose of EOC.
So yeah, giving money is a terrible idea.
Just teach them how to be financially responsible and good budgeting habits. As they say “teach a man how to fish…”
Kids can learn simple budgeting by age 9 or 10. Encourage them.