Parents today have more options than ever for giving their children a financial head start – but the real power lies in starting early and being consistent. A recent U.S. Bank guide explains how introducing your child to investing and financial independence now can set them up for greater flexibility and confidence later.
Why start early
When you invest for a child, even modest regular contributions have time on their side – the longer the time horizon, the more chance compounding has to work. That means your child isn’t just saving – they’re growing their potential.
What to teach
- Set clear goals – whether it’s a laptop, trade certification, car, or college.
- Explain the difference between saving and investing – saving typically sits in cash, while investing means buying assets that may grow (and may fluctuate).
- Use tools like a UTMA (Uniform Transfers to Minors Act) account to give your child access to funds when they reach the age of majority – and to build investment behavior early.
Why a UTMA account works
UTMAs offer flexibility that many education‑only plans don’t. The funds can be used for many life goals, supporting whatever path your child chooses. Starting with small monthly contributions – even $25 – can help you build a meaningful resource over time.
Getting started today
- Choose a monthly amount you can sustain – consistency matters more than size.
- Open (or schedule to open) your child’s investment account and automate contributions.
- Include your child in age‑appropriate conversations about how their money is working for them.
