Savvy SavingA smarter piggy bank: Piggy banks are a great way to help teach your young kids to save, but why stop there? Why not take the concept a step further and introduce what can be done with the money that is being saved? That is exactly what the
| Jeffrey Strain suggests giving your kids investments for the holidays. Do you consider that a gift? |
Early InvestingRoth IRA: If any of the money that your children receives is earned income, opening a Roth IRA in their name is a great way for them to learn about long-term investing and compound interest. Roth IRAs can be opened with as little as $100, and even small amounts deposited by your kids can add up to a nice retirement nest egg over time. One problem, however, is that your kids will probably be as excited about investing their money in a retirement account as they would be about having you tag along on a date. One way around this obstacle is to create a parent-financed 401(k) plan. Just like a company-sponsored plan that matches a certain percentage of your 401(k) contributions, promise to match every dollar that your children put into the Roth IRA. Getting this extra money should help encourage them to save part of their earnings. It will also teach them the value of participating in their company's 401(k) when they get their first job. Taking stock: Another investing option is to have your children pick out some of their favorite companies and purchase stock. Since it is a business they are interested in, your children are more likely to follow it. This will give them training on how the stock market works and give you plenty of opportunities to teach them along the way.
Remember CharityDonate to micro loans: While teaching your children about the benefits of giving away money may not seem like a way to help them become rich, there is a connection. Aside from the obvious benefits to society, charitable giving is part of tax planning for most wealthy individuals. Getting your kids into the habit of sharing their money with the less fortunate or with other charitable causes will give them a lesson that will serve them well down the road.
|Best Savings Rates for Selected Metro Areas |
|Source: BankingMyWay.com |
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While there are a lot of great charities out there that you can help your children choose from when it comes to donating a portion of their savings, donating doesn't mean they have to give the money entirely away.