5 Ways to Invest In Your Children's Future - Money Savvy Living (2024)

Investing. Typically, when we talk about investing, we are thinking about putting money into stocks, bonds, or mutual funds in a retirement account or a savings account. There is usually a tangible goal in mind: being able to retire comfortably or paying for a child’s college education. That type of investing is definitely something that should be a part of every person’s financial plan. But that is not the only type of investing that is important. Here are 5 ways to invest in your children’s future.

We need to be investing in the lives of our children in a way that is far more critical than financially — emotionally and relationally. Being a parent is so much more than just providing food, clothes, and shelter for a child. Raising a child involves teaching them values, morals, and ethics. Whether you are actually an involved participant in teaching your children this or not, they will acquire a set of values, morals, and ethics, or a lack thereof, depending on the upbringing they receive.

5 ways that you can actively participate in your children’s lives

So how do you actually invest in your children? How do you know you are achieving your goal when there are no quantitative measures?

Make eye contact with your kids

from the time a baby is born, they start to gain an understanding of the world around them and how much they are loved based on the eye contact they receive. Even as an infant, a worldview is starting to form. Take the time every day to look your child in the eye and tell him you love him—it doesn’t matter if your child is 6 months old or 16 years old.

Investment:

Self-Worth—by looking in his eyes, you are telling your child, “You have value.”

Say “I love you.”

This one may seem self-evident, but, trust me, you need to actually say it. Clearly communicating this simple message with your child often is critical. Through the trials that they will surely face in life—a mean kid at school, breaking up with a boyfriend, peer pressure—if your daughter knows that you, her parent, loves her, getting through these situations will be easier for her.

Investment:

Security—by actually uttering the words “I love you,” you are letting your child know, unequivocally, that no matter what the world brings their way, you are there for them.

Give compliments

As parents, we are so used to telling our kids what they can’t do and what they did wrong, that is it essential to make a concerted effort to tell them when they’ve done something right. In doing so, we are helping to raise a confident child. Just to get through the day without someone getting hurt, I feel like I am telling my kids every couple of minutes what not to do—a negative directive: “don’t throw the ball in the house,” “no wrestling by the fireplace,” “pick up your toys before someone trips over something and gets hurt…” Yes, this is a parent’s job, however, it makes it just that much more important to catch them doing something good. It can be anything, even something little: “you did a great job cleaning your room,” “thank you for mowing the lawn,” “I’m proud of you…”

Investment:

Self-Esteem—each time you tell your child they did something good, you are building up their confidence

Spend quality time together

In order to invest in the lives of your children, you need to actually be there. Yes, face-time matters. Maybe you are busy traveling with your job, maybe you are putting in hours around the clock trying to get your new business off-the-ground, but you can figure out a way to carve out quality time for your family. In the grand scheme of life, will your children be able to remember that you went to their baseball games, cheerleading competitions, or awards ceremony at school? Will they remember sitting down and eating dinner together as a family? Will they remember you teaching them to drive? Will they remember being able to talk to you about major life decisions, such as college, a career path, or renting their first apartment? Perhaps, you time is limited due to circ*mstances in life that you can’t control, but that is not an excuse for not making the time you do have with your kids count. After all, it is entirely possible for a parent to see their children every day, but not really be there.

Investment:

Yourself—investing time into your children creates memories for them. Someday when you are gone, the memories will still live on. Don’t live a life that will cause you to look back with the regret of “I wish I had spent more time with my kids.”

Eternity

For me, this is the most important. You may have heard the saying, “the family that prays together, stays together.” I think there is a lot of truth to this. Honoring God as a family helps to keep other priorities in order as well.

Investment:

Purpose—understanding that God has a plan for each of us, gives life meaning. Teaching my children about God is investing in their eternity.

5 Ways to Invest In Your Children's Future - Money Savvy Living (2)

Related article:

Investing isn’t always dollars and cents, sometimes it’s just common sense.

5 Ways to Invest In Your Children's Future - Money Savvy Living (2024)

FAQs

5 Ways to Invest In Your Children's Future - Money Savvy Living? ›

Simple brokerage accounts are great for children. They have minimal fees and provide for a buy-and-hold strategy for long-term investing. In a brokerage account, stocks, bonds, mutual funds and ETFs can be purchased for a variety of investment options.

What is the best way to invest in your child's future? ›

Simple brokerage accounts are great for children. They have minimal fees and provide for a buy-and-hold strategy for long-term investing. In a brokerage account, stocks, bonds, mutual funds and ETFs can be purchased for a variety of investment options.

What is the best way to create wealth for your children? ›

6 Practical Ideas for How to Make Your Kid a Millionaire
  1. Start a Family Business and Employ Your Child. ...
  2. Open a ROTH IRA for Your Child. ...
  3. Buy an Investment Property When They Are Born. ...
  4. Build Credit Early. ...
  5. Open a UTMA Custodial Account at a Brokerage. ...
  6. Open a 529 Savings Account.
Nov 28, 2023

How do I set my child up financially for the future? ›

How to Set Your Children Up for a Lifetime of Financial Freedom
  1. 529 College Savings Plan.
  2. MIDDLE SCHOOL YEARS (10-13 years of age)
  3. Checking & Savings Account.
  4. HIGH SCHOOL YEARS (14-18 years of age)
  5. Micro Savings Accounts.
  6. Roth IRA.
  7. Taxable Brokerage Account.

What is the best investment account to open for a child? ›

Best for versatility: Uniform Gifts to Minors Act (UGMA) Accounts. A UGMA account lets you invest in a wide variety of different assets on behalf of your child, such as mutual funds, stocks, bonds and CDs.

Which type of parents invest heavily in their child's future? ›

Since highly educated parents tend to view time with children as an investment opportunity to build human capital (Guryan et al., 2008), they spend that time actively developing their children's talents and skills; whereas, less educated parents tend to let their children's talents and skills develop with little or no ...

How to save money as an 11 year old? ›

Children can learn the importance of living within their means, which is one of the basic tenets of saving.
  1. Discuss Wants vs. Needs. ...
  2. Let Them Earn Their Own Money. ...
  3. Set Savings Goals. ...
  4. Provide a Place to Save. ...
  5. Have Them Track Spending. ...
  6. Offer Savings Incentives. ...
  7. Leave Room for Mistakes. ...
  8. Act as Their Creditor.

What is the fastest way to create generational wealth? ›

Follow these five steps to get started on your generational wealth building journey:
  1. Step 1: Pay off Debts. Think of debt as missed opportunity. ...
  2. Step 2: Buy a House. ...
  3. Step 3: Start Long-term Investing. ...
  4. Step 4: Put an Estate Plan in Place. ...
  5. Step 5: Share Your Financial Wisdom.
Mar 19, 2024

What is the smartest way to build wealth? ›

Diversifying your investments will help protect your money from market downturns.
  1. Earn Money. The first thing you need to do is start making money. ...
  2. Set Goals and Develop a Plan. What will you use your wealth for? ...
  3. Save Money. ...
  4. Invest. ...
  5. Protect Your Assets. ...
  6. Minimize the Impact of Taxes. ...
  7. Manage Debt and Build Your Credit.

What is the quickest way to build wealth? ›

One of the key ways to build wealth fast -- and over the long term -- is to earn passive income. And one of the best ways to generate passive income is to own one (or several) rental properties.

How can I help my daughter financially? ›

The bank of mum and dad: what you can do to help your child...
  1. We all want what's best for our children, right? ...
  2. Gift them money. ...
  3. Lend them money. ...
  4. Teach them good saving habits. ...
  5. Consider investing in their future.

How do I set my family up for financial success? ›

How to build a family financial plan
  1. Start with your family's goals. The family financial plan begins with your goals, so you'll want to understand what those are: ...
  2. Build a budget to reach those goals. ...
  3. Build that emergency fund. ...
  4. Invest for the future. ...
  5. Protect yourself with insurance. ...
  6. Revise your plan.
Oct 18, 2023

How can I invest my child with no income? ›

If you don't plan to touch the money in the account you want to open for your child for five years or more, you can consider a Uniform Gifts to Minors Act (UGMA) or a Uniform Transfers to Minor Act (UTMA) account to invest in good growth stock mutual funds.

Can you invest as a 12 year old? ›

It is generally impossible for minors to open their own brokerage account, but custodial accounts and joint accounts allow young people to begin their investing journey with varying amounts of adult supervision.

How to make money as a 12 year old? ›

There are so many opportunities available to help earn some extra cash, like babysitting, helping out around the house or in the community, or picking produce at a local farm. At this age, they can try their hand at many different things to see what they excel at and even figure out what they find to be a lot of fun.

Is a CD better than a savings account for a child? ›

Since CDs typically earn higher annual percentage yields (APYs) than standard saving accounts, opening a CD can help your child's savings grow faster. You might also purchase a CD to give to your child or provide a head start on paying for a first car, wedding or other big goal.

How much will a Roth IRA grow in 20 years? ›

If you contribute 5,000 dollars per year to a Roth IRA and earn an average annual return of 10 percent, your account balance will be worth a figure in the region of 250,000 dollars after 20 years.

Should I open a Roth IRA for my child? ›

Should You Get a Roth IRA for Kids? If your child has earned income, saving and investing it in a Roth IRA can be a great idea. The earlier you get started, the more time they will have to benefit from compounding, and long-term investments in stocks have historically been an excellent investment.

Is UNest better than 529? ›

With UNest, you don't get as many tax benefits as investing through a 529 plan, but you gain the flexibility UTMAs offer. Plus, UNest makes it easy for your friends and family to contribute as well. And if you're brand new to investing, the pre-built portfolios are a selling point.

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