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  1. Elizabeth says:

    I would suggest a variation of this to encourage good habits –

    Talk to your child about Roth/retirement accounts. Then offer to help the child open an account and reimburse for all contributions up to their earnings or a specified amount agreed in advance. BUT you will not reimburse them until later on (like 2-4 times a year and make sure they realize that). You want to enforce not only saving/investing but also delayed gratification (as in getting reimbursed).
    Have your child pick the investments, with your guidance, so they will get interested in the account and it’s growth. And if they pick poorly, let them learn now while the balance is low. This may result in them working harder to get a higher income as they get older and learning to make good investments.

    1. jblankenship says:

      Some really great ideas to involve and teach a child about saving and investing – thank you!

  2. Scott says:

    Great article Jim! For those parents with the financial wherewithal to do so, I recommend they incentivize their children’s ROTH IRA contributions. Parents should consider creating a family matching program. I gave my child 25 cents for every dollar he put into his ROTH IRA. My program ended once he completed his undergraduate degree. This approach makes it more appealing to save for a retirement 40-50 years down the road, a financial concern most teenagers would perceive as too remote to address. It also teaches them the significance of matching contributions, so they are prepped to see the imperative of contributing to an employer’s retirement plan, at least to the extent that the employer matches their contribution. Parents should also encourage their children to leave their ROTH funds untouched, hopefully being the last money they ever access. Taking this approach increases the odds that your children internalize the importance of financial planning, both in general and specifically for retirement.

    1. jblankenship says:

      Thanks, Scott. This is one of my favorite topics to talk to parents about. And your matching program is a great idea, thanks for sharing!

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