Getting our kids to invest at a Young Age

I think it’s safe to say that most of us parents would love to go back in time and tell our younger selves to invest our money as early as possible, as opposed to spending on needless items that we're just going to throw away. I can still remember when I was 21, my father’s secretary (who we nicknamed Beetlejuice just due to her look and her quirky mannerisms) would tell me all the time save $100 a month now and you’ll be set later on. Make sure you’re letting compound interest start working for you.

Well, just like any 21 year-old I thought "yeah, that sounds cool but I’ll do it later." I had bills to pay and just overall life in general with a salary that just didn’t provide extra. 

Well, now I’m the parent telling my kids make sure you’re investing $100. But, rather than just telling them, as they really don’t grasp how to even start, I have provided my kids away to get that invested starting and I would recommend other parents to do it as well. Sure it may seem like you’re 18 year-old is an adult and they should already know how to do this and they should do it themselves. While yes, that is true and some 18-year-olds are super on it, and I know my kids are financially responsible, but they also are young and have a tendency to blow money on things like Starbucks and trips to Target in the mall for items I know they’re just going to throw away.

So here’s my tip for you parents that want to make sure your kids get started on that right foot even if it does take a little bit of handholding. I have already opened up all four of my kids Roth IRA accounts. My two that are over 18, I had the accounts opened solely in their name and my two that are under 18 have me as a custodian. I have already made their accounts have an automatic draft therefore, they do not forget to invest $100 every month. It’s teaching them that simple habit now as spending $100 on things they don’t need is really easy to do.

I sent them Instagram reels as you might’ve read from a post I did previously about people to follow so that they can see the magic of compound interest. Do I know if they’ve watched those videos.... Nope, that’s like a wish and a prayer. However, one thing I can do is reach out to my own financial planner and take that tiny bit of time and that little bit of effort to have them open their own brokerage account and Roth IRA as sometimes half the battle is just getting it set up. I had all of my kids set up in a day with their automatic transfers started. This is not drafting out of my bank account, however, this is drafting out of their own account. I’ve also told you how we do pay our kids as employees of our company. I know they have that $100 in their account and it’s just making sure that they do not spend it. They need to sign off on their accounts so they are well aware that they have been opened and they also know the date that that money will be drafted. Putting a reminder in their phone is a great way to get them in the habit of knowing when bills are due!

I wanted to establish the habit now of them knowing that they have this $100 that will automatically be drafted out of their bank account every month so be ready for it. With my older daughter that amount has already been increased to $150, but overtime the amount that she will have invested and earned thanks to compound interest will be far superior to a Starbucks habit that got her nowhere.

So that’s just my quick tip for your parents. Yes, we want to keep teach our kids to fly on their own, but I want to make sure that when it comes to their future finances they’ve started on the right foot even with hand holding involved to make it happen. I might’ve been there and I do know that. 

XO , 

Mama