Starting as early as first grade, kids can begin to earn money and keep expanding their horizons, especially online, and at the same time learn powerful lessons about spending, saving, and investment.
Even a few decades ago, talking about how kids can make money might have turned to front-yard lemonade stands, paper routes, and returning bottles for the deposit. Things have changed a lot! Today, there are greats ways to earn money as a kid. That applies to younger kids, but it applies in spades for older kids because of literally inexhaustible opportunities for online enterprise.
Ways to Make Money as a Kid
Making money can be fun, but it also builds self-confidence and resourcefulness. And experience is the best teacher of the value of a dollar. On that basis, children can begin to understand saving for the long term and investing for a lifetime.
How to Make Money as a Kid at Home
Younger kids, starting at age six, when they enter school, have limited opportunities, but by getting parents, relatives, and friends involved, the money-making world can open wide. Easy examples of how kids earn money at home are working around lawns and gardens, washing cars, and walking dogs. Busy adults and older adults can use help with watering, weeding, and other chores. An adult will have to work with the child at first, but it is amazing how the prospect of having money to spend focuses the mind.
By the teenaged years, or even a bit earlier, babysitting can begin in safe, monitored circumstances and, with experience, develop into a real money-maker. If you are self-employed or own a company, you and your employees can supervise kids in many jobs. In many shops, the repetitious jobs like breaking down boxes, cleaning, and sorting the mail are real-time consumers.
Kids love to make things, and, at a fairly early age, if you are engaged in crafts such as making and selling anything from jewelry to birdhouses, kids will want to see what it’s all about.
How to Make Money as a Kid Online
You will have noticed, for sure, that kids begin playing online at amazingly early ages. The reality is that toddlers do begin to do so, but online education begins in earnest by elementary school. Then, the challenge is not to introduce your child to the internet but to limit internet hours and monitor content and contacts. And in doing so, some of that time can be devoted to how kids earn money online.
Kids who have become adept at shopping online now are creating products like t-shirts designed with local themes, finding stuff online that is a good deal, and reselling it.
By the teenaged years, most kids are super-adept at online tasks. Kids who take photographs now have many sites that want to sell them. Adults and kids are paid to take online surveys. By the time kids are ready to take part in school plays, they are prepared to join with other kids in making online videos for YouTube where, for example, they film the “kid-testing” of a product. Today, of course, most of the businesses right in your town have websites and a hunger for stuff to post.
Any talent that your kids like to use, such as drawing, jewelry making, and photography, can be turned into creating products that sell. Yes, it is challenging, but that is the point. Learning how kids get money fast online, and having the confidence to do it, can keep developing until you find your son or daughter running an impressive business in high school and college—and then graduating into a career they already have started.
Your child already may know much more than you do about online sites such as Spotify (for posting music), Scoopshot (photographs), and Testerwork (testing apps). When things reach this level, though, your monitoring of what the child is doing, for whom, and with whom become critical. Learning all the great stuff on the wide-open internet is not the same thing as learning how to watch for abuse, exploitation, and scams.
The first and obvious incentive for making money is to buy things. That may be all kids want, at first. But one almost automatic step is saving for things that cost more money. Today, saving up can be for a bike or skateboard and video games, a game console, video equipment, and art supplies. Thus, there is the satisfaction of consuming but also the lesson of investing earnings in growing the business.
Why Teaching Your Kids About Money
Long before you reach this point, though, you will have started teaching them to be money smart. You know that dealing with money has the potential for great satisfaction and enjoyment, but also failure and a lifetime of struggle. In a sense, it is natural for even a young child to start learning about spending, but a little deliberate organization can make this far more effective. Also, young children will begin to reflect in their actions your own behavior.
One mother listed these simple steps she took when her children were still pre-school:
- Taking them to the grocery store to look at the price tags.
- Having them tell me how many fingers something cost.
- Showing them the different ways you can pay for groceries (credit/debit card, cash, check).
- Buying a play cash register to pretend grocery shopping at home.
For adults, a shopping trip is totally natural, but it does have a structure. You can explain the steps to your kids from the beginning:
- You must go shopping for things you need (you may make a list).
- You have a budget for this shopping trip because there is other shopping you must do.
- You must bring enough money or other form of payment.
- At the grocery store, you look at prices on items. You may not usually add them up as you go along, although many stores now make this easy. Is your child old enough to do the adding for you?
- For some items (meat), there are many price choices.
- If your child grabs some candy or chips, you can ask the price. Are there alternatives with other prices?
- A receipt is essential for checking the charges and essential for returns.
It all adds up to a lesson that shapes everyone’s life: the value of a dollar. The complement to the shopping/spending lesson is the earning lesson. Learning about dollar value in spending transitions naturally into how kids can earn money. When that happens, the shopping lessons are highly relevant.
But with earning comes the next crucial lesson, which is saving. Everyone works to consume, but, as the statistics show, a disturbing percentage of Americans don’t save—or don’t save enough for a life cycle that might include paying for their college, building an emergency fund, buying a home, helping their kids through college, meeting major medical expenses, and, above all, retiring. It is a big lesson and apparently not easy for many to learn.
If teaching the value of a dollar is step one, then step two is saving versus consuming. Saving to pay for larger purchases, already discussed here, is natural because your kids will want these things—and having a targeted desire is an excellent incentive to work and save. The more explicit and extended explanations come next, with discussions about the uncertainties involved in money-making, whether you have a job or a business, and the need for a financial reserve to keep spending when you cannot earn. You can suggest or require your kid to save a percentage of his or her earnings not to consume but for emergencies, the next stage in life (for example, a college education), and investment in financial independence.
The first and perhaps best way to explain these things is by referencing your own life and the family. How many parents explain to children in realistic detail how they paid for their college education? And not just with lines like “I worked for my education.” A pencil and paper might focus thoughts on sources of college money and the reality of obtaining it.
The organizing goal and principle of saving, as adults learn, is financial independence. That will be the challenge facing your kids when they finish their formal education. And many parents live for years with the financial burden and burden of worry when young adults do not achieve such independence. The earlier your children know that this is a challenge they inevitably will face—and how much depends on it—the better they can prepare. If earning money, regulating spending, saving regularly, and investing have become second nature, young adults will apply those lessons to big decisions like choosing their college, their major, their summer internships, and the plans for professional education.
All those steps toward financial independence are part of financial education, but while they are being taken, and after they have been taken, the crowning lesson about money—and financial freedom—will be how to invest the money they earn and save.
Ways to Save Money for Your Kids
We all hear about young prodigies who score big in the stock market. Still, for most kids, there are excellent options for investment vehicles that warrant careful initiation consideration but then build wealth while requiring only periodic review:
- A high-yield savings account into which you can deposit a percentage of what your kids earn.
- An investment account like UNest introduces kids to the world of the stock market in a low-risk manner.
- For gifts that your children receive, a UMTA account with you as custodian of the account until your son or daughter reaches 18. (In most cases, kids are not ready to choose individual stocks, but mutual funds or ETFs with conservative investment disciplines and long-term records could be considered.)
- An IRA if your kids have enough earned income to invest in a Roth IRA with you as custodian. (Unquestionably, once kids who have worked hard learning about “passive income” in the form of investment grow, their excitement will grow, too.)
UNest: Save Money for Your Kids’ Future
UNest offers a tax-advantaged investment account for kids that you can control as a parent until they become of age to use and manage the funds. A great thing about this type of account is that the funds you save can be used towards whatever your children may want when they grow up: going to college, buying a house, getting married, or going on a trip. Another perk is the tax benefits it comes with, as you can save some taxes on the money you contribute to the account.
The UNest account is conveniently managed through the easy-to-use UNest mobile app, available for iPhone and Android. If you are not used to investing, the app will recommend investments suitable for the age of the children under the account. There is a small monthly fee if you have one kid or upgrade to a family plan to add up to 5 kids to your account.
UNest team is committed to helping you to build a better future for your kids even as you continue their lessons about financial independence. UNest can be the right next step for working with your kids to teach them to be money smart, to save and invest for the future, and to understand the challenge of financial independence.