How to Raise a Young Investor

Start with the basics

Before diving into investing, make sure your younger children understand the basics of money management, including budgeting, saving, and spending. Start with simple, age-appropriate money lessons, and gradually build upon them as you go. For example, you could give their child a cash allowance and help them choose categories they want their savings to go into using a piggy bank, jars or envelopes. By showing them how money can be allocated to different wants or “needs” they can learn the importance of money management.

For teens and older children, more in-depth conversations about investing and good money management take place. It can be important to help them find their “why,” by asking them how they envision their life, not just for today, but for the future.

Retirement planning at any age

A recent Nationwide poll of 1,150 U.S. families with children under age 18 to ask about their perceptions and attitudes towards their finances. We found that retirement and education savings goals were among their top financial goals, with paying off debt also ranking high on the list of financial priorities.

These goals are relatively consistent across different generations too, except among Generation Z (defined generally as adults between the age 18-25). For Generation Z, saving for retirement and paying off debt is a lower priority than buying a home and building credit.

Having conversations about retirement and education on saving can and should begin early, to save children future financial stress. The average age that Nationwide participants start saving for retirement is 31, which is late. One of the most important things your kids have when it comes to saving is time.

Custodial accounts

Since minors can’t open brokerage accounts or invest in stocks directly, you will need to open accounts on behalf of your children called custodial accounts. The age of termination, when the custodian relinquishes control of the account, varies based on the state and will either be 18 or 21.

Custodial accounts can hold a variety of investments, including stocks, bonds, mutual funds, and exchange-traded funds (ETFs). They can be a great way to get kids started with investing and can help build a diversified portfolio over time that they can take over once they’re older.

Another way to teach children about investing can be to open a Coverdell or 529 Education Savings Account. That way, they can watch as their college savings potentially grow, and potentially use in the future.

Hands-on opportunities

Bring your children to meet with your financial professional and include them when talking about general financial goals. Having those conversations and bringing them along to real-world experiences regarding money can help teach children financial literacy.

Introducing investing to your children can have several advantages; they’ll have a longer time horizon to invest, meaning that they can choose to take more risks and potentially earn higher returns. Investing early can also help children develop good financial habits, such as saving and budgeting. Additionally, investing can teach children valuable skills, such as critical thinking, goal setting and decision-making.


Investing involves market risk, including possible loss of principal. No investment strategy or program can guarantee a profit or avoid loss. Diversification does not assure a profit or protect against loss in a down market.

Nationwide and its representatives do not give legal or tax advice. An attorney or tax advisor should be consulted for answers to specific questions.

NRM-22188AO (5/23)