Weather Forecast


Financial Wellness: Start money schooling at early age

Every day, in big and small ways, I try to teach my kids about money.

Requests for toys are put in context of resources. We sort and count coins. Six-year-old Eve and I made a trip to her bank this spring to deposit a birthday check, which she painstakingly endorsed herself.

While I’ve done a lot of reading and research to educate myself about things like no-load mutual funds and dividend paying stocks, I credit my parents for my money smarts. They laid the foundation with common-sense teachings like don’t go into debt, put money in savings and be thrifty when you shop.

I’m trying to do the same for my kids, as well as give them a leg up with other smart money moves parents can make for their offspring.

The first was opening a 529 college savings account for both kids as soon as we had their Social Security number in hand.

Automatic monthly contributions, gifts from relatives and matching grant dollars have helped build a decent-sized college fund for both kiddos already, even though the older is just going into first grade. Plus, we get a tax break on contributions.

By starting early, we’re able to leverage the most important ingredient in investing: Time.

That’s why we also plan to open a Roth Individual Retirement Account for the kids once they’re old enough to work. (My husband joked in a Christmas card letter that he expected Eve to start paying rent by age 3, but we’re still letting her slide.)

Anyone who has taxable income can contribute to a Roth IRA, including minors. So, if your teenager gets a W-2 or is paying taxes on babysitting or lawn mowing money, they can start saving for the future, allowing more time for that money to grow and avoiding taxes on its earnings.

The contribution limit for 2014 is total taxable compensation or $5,500, whichever is less. But here’s the cool part: You can contribute to the account on their behalf.

Let’s say Junior earns $3,000 this summer by flipping burgers. Even if he spends it all on gadgets and swagger (which I wouldn’t advocate, but let’s just say if), you can still put up to $3,000 in his IRA.

We plan to offer Eve and Owen a parental match when they start working, putting $1 or $2 into a Roth IRA for every dollar they contribute.

Finally, to help your kid build a credit history, you can add him or her as an authorized user to your credit card. You don’t even have to give him or her a card or let them know they have purchasing authority. This only works, though, if you have a good credit history, meaning always paying on time and not carrying too high a balance.

You also can check your children’s credit reports to ensure they’re not a victim of identity theft.

According to the Consumer Financial Protection Bureau, a minor may request a copy of their credit report once he or she reaches age 13. Adults may request their child’s credit report by providing documentation showing they are the child’s legal guardian.

Sherri Richards

Sherri Richards has worked for The Forum since 2002. She is the features and business editor, overseeing Variety, SheSays, Farmers' Forum, the daily Business pages and Saturday Business section.     Have a comment to share about a story? Letters to the editor should include author’s name, address and phone number. Generally, letters should be no longer than 250 words. All letters are subject to editing. Send to

(701) 241-5556