Should A Summer Job Signal The End Of Allowance?

I recently received the following thoughtful question from a FamZoo parent (slightly edited to ensure anonymity):

How to Track Your Teen's Family 401(k)

The “Family 401(k)” is my all-time favorite family finance hack for parents seeking to help teens grow their wealth and investing IQ over decades. I’ve written and talked about the technique many times since 2011, and I’ve put it into practice with all 5 of my kids.

The Family 401(k) is a homespun version of the workplace 401(k) program commonly offered to employees. With a workplace 401(k), an employer kicks in extra money to help the employee build wealth in a tax-advantaged company sponsored retirement account. With a Family 401(k), parents kick in extra money to help their child grow wealth in a tax-advantaged individual retirement account known as a Roth IRA.

For the uninitiated, the quick recipe for the Family 401(k) is:

6 Reasons To Review 529 Statements With Your Teen

How much does your teen know about the 529 account you opened for college savings?

Nothing?

That’s the norm. Pretty dry stuff for a teenager.

Here’s a radical suggestion.

👉 Review your 529 statements with your teen.

And do it every quarter.

Yes, your initial sessions will be greeted with eyeball rolls, yawns, or worse. But keep up the good fight.

Through your consistent and repetitive efforts, your teen will gradually learn the following:

Beyond Cash and Gift Cards: 4 Creative Financial Gifts for Kids

“Hey kid, here’s 20 bucks.”

“No thank you,” said no kid ever.

That’s right. No kid is going to hate you for handing over cold hard cash as a present this holiday season. The same holds for gift cards, as long as you get the brand right. That might be a little trickier than you think, judging by the billions of dollars worth of unused gift cards floating around out there.

And while cash and gift cards aren’t the most imaginative gifts, at least some folks get pretty darn creative on the packaging. Maybe you can even try your hand on some clever money origami this year.

Still, wouldn’t you feel a bit more thoughtful giving a financial gift that isn’t purely focused on immediate consumption? Perhaps something a bit longer term and, dare I say, educational?

I know what you’re thinking. Yawn. But bear with me, I’ve got some cool options that are worth your consideration.