4 Reasons to Teach Your Child About Money

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Popular media is filled with exhortations to teach your kids about money, train millionaires and build wealth. There are plenty of successful, educated Americans who want to do better with their money but don’t know how. Plus, they have no idea how to train their children to make better financial decisions.

Acorns Early steps in to help you both educate your children about money and inspire you to increase your net worth. 

1. Teach Passive Investment Early

While passive investment has always been possible, it was not as accessible as it is today. Your children likely have a mobile device on which they can download the Acorns app, and this can be their introduction to passive investment.

If your child has an allowance, it is only natural that they are thinking of what they can buy with that money—that’s how we normally think. We often align our spending with our earnings.

However, you can use Acorns Early to teach your children to invest a portion of their earnings. The platform is simple, works well for any child and falls under the “set it and forget it” investment model.

2. Learn Together

Adults who don’t feel confident managing investments or handling money can learn from Acorns Early. Yes, kids are learning what passive investing is and how it benefits them. You, on the other hand, may feel inspired to start investing, saving money for the future and investing in your child’s education, your retirement or other major expenses.

Instead of reading jargon-heavy articles that you could never share with your child, the two of you learn together. As your child gets a head start on their future, you are learning how to impact your present.

3. Access to Your Cash

Yes, you can set up your Acorns Early account in 3 minutes, but you can also access your cash at any time—use the funds for items that benefit your kids. Plus, transfer the money or account to your child when they reach the age of majority (usually that’s 18.)

You can add multiple kids to the same account, enjoy the tax advantages of the UTMA/UTGA accounts Acorns Early offers and feel confident that you are making smart financial choices. 

Plus, a UTMA or UGMA account can be used for anything while a 529 account can only be used for education—severely limiting your options. For example, your child gets a full music scholarship, but you really need to purchase a professional model instrument to help them progress as a musician. A UTMA or UGMA account allows you to withdraw your money and purchase that instrument.

1. The Perks of Micro Investing

When you use Acorns Early, you enjoy a few perks that come with this micro investing app. Acorns Early offers discounts and bonuses from partners like Disney+ and ABC Mouse. Save as much money as you can on the front end while investing for the future.

What are UTMA and UGMA Accounts?

UTMA and UGMA accounts allow minors to carry financial accounts in their own names without signing a contract. As you may be aware, minors cannot legally sign contracts, but the Uniform Gift to Minors Act allows parents to create custodial accounts that can be turned over to the child when they reach adulthood. 

The funds are held in the name of the child—meaning they cannot be transferred to another child—and the parent manages that account in good faith.

Tax Advantages of UTMA Accounts

While withdrawals from UTMA or UGMA accounts are taxable, they are taxed at your child’s tax rate. Chances are, your child is in a much lower tax bracket than you, meaning they receive a significant advantage when using that cash. Plus, you benefit because any withdrawals you make to benefit your child are still taxed at that—presumably—low rate. 

With all these options and bits of inspiration, turning to Acorns Early is a no-brainer.

Read our Acorns Review for more information. 

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.