Raising Children without a Piggy Bank
SECURING YOUR CHILD’S FINANCIAL FUTURE
There are plenty of accounts like 529 Education Savings plans and ROTH IRAs that you can use to help your child get started on solid financial footing. But if you don’t also establish some solid financial literacy, those funds could disappear in the blink of an eye. Since financial literacy, like oral hygiene, is a life-long endeavor, here are some tips on building financial literacy throughout your child’s life.
The Primary Stage: Under Age 10
At this stage, money needs to be entirely visual, tangible, and fun. Children under 10 struggle with abstract financial concepts, so your goal is to show them that money is finite and requires choice.
Ditch the Piggy Bank: Use three clear plastic jars labeled Spend, Save, and Give. Clear jars allow them to physically watch their money pile up, introducing the concept of asset allocation.
Gamify the Clinic Routine: Connect effort to income early on. Introduce simple age-appropriate household chores or tasks at the practice like counting inventory.
Family Game Nights: Play games like Monopoly Junior or Money Bingo. These classics build basic math skills and introduce the reality of budgeting and property values in low-stakes play.
The Mixed Dentition Stage: Pre-Teens (Ages 10–12)
Your pre-teen is seeking independence, making this the perfect time to phase out physical cash and introduce digital financial training wheels. In our highly cashless society, they must learn that tapping a card represents a real deduction from a finite balance.
Automate Their Allowance: Link your personal or practice bank account to a dedicated kid-friendly fintech app to pay allowances automatically, saving you weekly administrative headaches.
The Best Cashless Apps for Pre-Teens:
Greenlight: Best for tying automated allowance directly to customizable chore charts. It blocks specific spending categories and pays up to 3% interest to teach savings.
Acorns Early: Best for gamifying financial education through bite-sized, interactive "Money Missions".
Cash App Family: A completely free, streamlined peer-to-peer payment alternative if you want a basic digital wallet with card-locking oversight.
3. The Orthodontic Stage: Teens with Jobs (Ages 13–18)
When your teenager starts earning real money—whether through babysitting, lawn care, or working your practice's front desk—the strategy pivots from simple budgeting to wealth building and credit management.
Hire Your Children at the Practice: You can pay your teen a legitimate, tax-deductible wage from your practice for tasks like digital marketing, scheduling, or sterilization tech work.
Open a Custodial Roth IRA: Your working teen can contribute 100% of their earned income (up to the annual IRS limit) into a Custodial Roth IRA. Or you can let them keep the money they earn and contribute directly to the ROTH IRA up to the amount of their earned income. Decades of compounding tax-free growth will set them up for immense future wealth.
Hack Their Credit Score with the Step App: Step provides a secured Visa credit card backed entirely by the cash you deposit. It prevents debt while automatically reporting a pristine, on-time payment history to credit bureaus the moment they turn 18, instantly granting them an elite credit score.
4. The Wisdom Teeth Stage: College Age (Ages 18+)
At this stage, you are transitioning from supervisor to trusted financial advisor. The focus here is protecting their independence and maximizing tax shelters.
Leverage the 529 Rollover: If you funded a 529 Education Savings Plan and they graduated under budget (or secured scholarships), current tax laws allow you to roll over up to a lifetime limit of $35,000 of unused 529 funds directly into a Roth IRA for them. This kickstarts their retirement entirely tax-free.
Implement the Match Strategy: If your college-aged kid works a summer job, offer to match their savings. For every dollar they save towards their first car or apartment deposit, match it 1:1 with a 529 or ROTH IRA contribution to incentivize savings habits.
Teach Practice Overhead Principles: Teach them that their personal life has "overhead" just like a dental office. Help them calculate their personal fixed expenses (rent, insurance) versus variable expenses (dining out) to ensure they always maintain a positive net cash flow.