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How To Invest For Your Kids On A Tight Budget


by Marlo Richardson, founder of Business Bullish

Most parents invest in some sort of registered education savings plan (RESP) or child benefit when their children are young, but what about outside of that? What about setting them up for the future and building the base to their portfolio FOR them, even on a tighter budget? 

Every parent wants their children to have access to the best opportunities, but for those parents who have to manage their day-to-day care for their children on tighter budgets, it can be much more difficult to invest your excess cash, even with the best of intentions.

The silver lining is that children — especially those at a younger age — are sponges of information; they absorb anything and everything they are told and taught. Therefore, parents can (and should) start teaching their children about how to invest from a young age, and thankfully, there are a number of ways they can start investing for their kids, regardless of how tight their budget is.

Ways to invest in your children on a budget

One of the most important steps you can take as a parent is to start saving for (and investing in) your children’s future. With rising costs affecting everything from rent to healthcare and education, it’s never too early to start investing anything you can into your kids.

529 tax-advantaged accounts.

When it comes to funding your kids’ education, a 529 tax-advantaged account is one of the best avenues you can use to start saving for their K-12 and/or college education expenses. A 529 tax-advantaged savings account has no limits on how much income you can contribute to it, and anyone — be it you, your family, or even close friends — can help contribute to this kind of savings account. It grows earnings tax-free over time, and when its funds are eventually used for educational purposes, they are not subjected to federal income tax on capital gains from investments made into it. This makes a 529 account a more appealing option than traditional savings accounts, such as those offered through most common banks.

Roth IRAs.

Investing in a Roth IRA account is another option for parents on a tight budget, and also comes with the added benefit of helping to teach your children to have a mentality of saving for the future. Roth IRA accounts grows through tax-free earnings and contributions and can be comprised of any combination of bonds, mutual funds, or stocks. The only downside to this route is that it only becomes available once your child has a job of their own that earns them income, and that if any funds are withdrawn from the account prior to your child reaching around 60 years of age, it will be heavily taxed.


Another simpler option to invest in your kids on a tight budget is to start investing some of your spare income into stocks. In doing so, you can even show your children how the stock market works and introduce them to basic economic principles like ‘risk v. reward’ and ‘high-risk v. low-risk returns’ over time and in real-time. You can even set time aside each week to pull up their stock investments and show them which ones performed well, which ones didn’t, and help to teach them why.

Teach your children how to invest in their future selves

Parents should start teaching their kids about money as soon as they are old enough to understand that the things they want and need cost money. Parents can even gamify this process by playing games like Pay Day or Monopoly with them to show them how money can be traded, invested, and grown over time.

If your kids are fans of video games, this might help make your job here even easier. If there is a particular game company they are a fan of like Nintendo or Sony, this can give you an opportunity to show them those companies’ stocks and how certain factors that affect the stock market can help their investments grow over time. Likewise, there are a number of free-to-play online games that can help kids learn about not only how to invest, but also the value of investing in themselves and their future.

A lot of parents assume that investing in their children requires them to have a higher income or broader budget, but this couldn’t be further from the truth. You don’t need to be the richest parent in the world to start investing in your kids’ futures — you just need to be a loving parent with their best interests in mind and the ability to show them how investing works and its value to them. 


Marlo Richardson is the founder of Business Bullish, a website and resource that seeks to train people in the areas of financial literacy and entrepreneurship. She is a dynamic business woman and leader and is also a keynote speaker and business advisor who shares with local businesses her success stories in hopes that they can replicate her growth.



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