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Create Wealthy Children: If You Start These 6 Tips Now-Your Children Will Be Millionaires By 30

Building good financial habits begins in childhood. According to CNBC, by the time kids are six, they can start grasping important money concepts. So it’s best to start young and instill positive money lessons in your children. Here are six concrete steps you can take to give your children a great financial foundation. 

1. Match Their Savings 

Match Their Savings 
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Compound interest is an important financial lesson you must instill to create wealthy children. A good way to impart this wisdom and help your children build a savings habit is to match their money. For every dollar they put into a savings account, give them an extra dollar or two on top of it. Giving them a high matching rate will help them understand how money can stack up and get them interested in investing. 

2. Contribute to a 529 for Their Education

Contribute to a 529 for Their Education
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Your children probably won’t become millionaires without getting a solid education. Start making monthly contributions to a 529 account while they’re young. Additionally, see if you can get your family to chip in as well for birthdays and Christmas. Starting this account early will ensure your kids have a big enough college fund to avoid the heavy burden of student loans. The less college debt they have, the more money they’ll be able to invest, putting them on the path to wealth. 

3. Open a Custodial Roth IRA

Open a Custodial Roth IRA
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Another way to create wealthy children is to put them to work! Kids who earn their own income can open a custodial Roth IRA and start saving for retirement. Whether your child has a babysitting job or helps with the family business, make sure they set aside at least a portion of their earnings for retirement. Show them compound interest calculators so they can grasp how much early contributions will boost their future retirement income. 

4. Give Them a Personal Care Budget 

Give Them a Personal Care Budget 
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Giving your kids a personal care budget is another strategy that will create wealthy children. Kids rarely have the opportunity to learn the cost of everyday essentials and budget for them. Setting a monthly personal care budget and allowing them to purchase their own hygiene products will set them up for adulthood. 

They’ll learn how to shop sales, prioritize their needs and wants based on their budget, and understand important concepts like cost per ounce. These invaluable skills will help them grow up into informed consumers. 

5. Educate Them About the Stock Market 

Educate Them About the Stock Market 
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Kids not only need to learn the importance of investing but also how to distinguish a good investment from a poor one. Assets like cryptocurrency and NFTs have become popular and trendy online. However, kids need to understand investment risk and the importance of diversification.

If they don’t know why it’s important to spread out their risk and choose investments wisely, they may funnel their money into a single company and face losses. Explaining why diversified funds like ETFs are usually safer bets can help them make wise investment choices in the future. 

6. Teach Them About Inflation

Teach Them About Inflation
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You can’t create wealthy children without teaching them about inflation. They need to understand that the money in their savings account may lose value every year if they aren’t getting a high enough return on it. Educating your kids about inflation will also help them make appropriate investment and career choices. Knowing that they need to get regular raises to keep up with the cost of living may motivate them to pursue a high-paying profession and invest regularly.

Encourage Financial Literacy to Create Wealthy Children

Give them the tools they need to save
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Children don’t come out of the womb understanding money. They need help from their parents to build financial literacy. Hopefully, this post will help you create wealthy children and prepare them to be smart investors and consumers. Starting early will help them develop positive financial habits that will serve them well throughout their lifetime.