Raising financially secure kids starts earlier than most parents think. While it’s common to focus on budgeting or allowance tips, one of the most impactful moves you can make is opening a custodial investment account for your child — and starting small, but soon.
Unlike traditional savings accounts, a UTMA (Uniform Transfers to Minors Act) account lets you invest on your child’s behalf. That means your money has the potential to grow through the power of compounding, even if you’re only contributing $25 a month. Over 10 to 15 years, those contributions can add up to meaningful support for their future.
What makes UTMA accounts stand out is flexibility. Unlike 529 plans, which are designed for education, UTMA funds can be used for almost anything that benefits your child — from a first car or a coding bootcamp, to a down payment on a home someday. They’re investment accounts, not bank deposits, so while the value may go up and down, the long-term trend for diversified investing has historically outpaced cash savings.
The best part? You don’t need to be perfect. Just consistent. The earlier you start, the more time you give those investments to grow.
