Investing Guide for Kids: Steps by Age

How to get started investing with your child

Updated March 24, 2023

A Guide to Investing Based on The Age of Your Child

Of all of the balls that parents are juggling, getting young kids invested might be one ball that drops.  But with the most minimum time and effort, parents can check the box and help their kids build a financial foundation.  Here’s how to get started.

Ages 0-4

Set kids up for investing success  

Whether it's setting up an investment account at the local bank (Charles Schwab, Fidelity, and T.D. Ameritrade allow customers to open custodial accounts for minors) or signing up for investing app like Early Bird, parents can take just a few minutes to set their tiny babes up for investing success. 

If possible, any financial gifts that a little receives (from a Baptism, first birthday party or beyond) can be deposited directly into their investment account.  The sooner those dollars are invested, the more they’ll grow...it is never too early to start building a baby nest egg.

Ages 5-12  

Put those allowance dollars to work

Many elementary-aged children earn a weekly allowance by pitching in around the house.  While we always advocate an allocation of allowance dollars or funds from odd jobs to spend, save and give, accumulated savings dollars should be put to work.  Once kids save $20, $50 or $100, it may be time to transfer those funds from the piggy bank to the investment account. 

Just a $100 annual investment from birth to 18 could grow to over $4,000 by the time your kiddo is ready to leave the nest, and even that small yearly investment will compound and grow to reach over $50,000 by age 50.  Now is the time for kids to get their feet wet with investing, maybe by choosing a stock or two that interests them, or by investing in an ETF or Mutual Fund.

Ages 13 and Up 

Dig a little deeper

Once kids have a handle on investing basics, it’s time to dig deeper.  Put their investment learning into practice. Teens can begin to focus on researching investments, diversifying their portfolio, and even understanding tax implications (i.e. capital gains taxes).  If kids are working, they should also be sure to set up an IRA to start investing in their future.

If someone gave you $1,000 today, how would you invest it?  Why?