7 proven strategies to set your child up for financial success

A Parent's Comprehensive Guide

With everything going on in the world today, a lot of parents are realizing how important it is to teach their kids about money early. It's not just about putting money into a savings account. It's about helping your child build the habits and confidence they’ll need to make smart financial choices throughout life.

Kids start learning about money way earlier than most people think. As parents, you're the first—and most important—money teacher they'll have. And good news: you don’t need to be a financial expert to set them on the right path. Here are seven real-life strategies you can use to help your child grow into a financially confident adult.

1. Start Early, Keep It Simple

Even toddlers can start learning about money. Instead of using piggy banks, try clear jars so they can actually see their savings grow. Talk to them while you’re out running errands. Explain how you pay for things at the store or why you choose one item over another. Those little moments build up over time.

As your child gets older, you can give them a small allowance tied to simple chores. That helps them understand that money comes from work. Help them set goals, like saving for a toy or a trip, and let them track their progress using a sticker chart or a simple app. Grocery shopping is another great learning opportunity: teach them how to compare prices or stick to a budget.

2. Build Credit Early (Without the Risk)

One of the best-kept secrets in personal finance is adding your child as an authorized user on your credit card—without giving them the card. As long as you manage your card well, your child can start building a strong credit history before they even turn 18. That can help them get lower interest rates later and save them thousands of dollars.

Before you do this, make sure the credit card company actually reports authorized users to credit bureaus. And while your child won't be able to use the card, this is a great chance to start teaching them about how credit works—and why it matters.

3. Save Smart for College

College is expensive. Really expensive. If you want to help your child avoid student debt, the earlier you start saving, the better. A 529 plan is one of the best ways to do this. It’s a special savings account that grows tax-free as long as the money is used for education. Some states even give you a tax break just for contributing.

And it’s not just for college anymore. 529s can now be used for things like trade schools, K–12 tuition, and even apprenticeships. Other options include Coverdell accounts and custodial accounts, which offer more flexibility but come with different rules. Some parents even use Roth IRAs for dual-purpose savings—money that can be used for retirement or education if needed.

4. Protect Their Identity

Unfortunately, kids are becoming targets for identity theft. Their credit is a clean slate, which makes it attractive to scammers. One of the best things you can do is freeze their credit with all three major credit bureaus. It’s free, and it blocks new accounts from being opened in their name without your permission.

Once your child hits school age, it’s smart to check their credit once a year. They shouldn’t have any credit history at all, so if something pops up, you’ll want to catch it early. And don’t forget to talk about online safety. They should understand things like creating strong passwords and thinking twice before sharing personal info online.

5. Teach Them How Investing Works

Investing might sound too advanced for kids, but it doesn’t have to be. You can start by showing them how money grows over time through compound interest. Maybe use a chart or a simple story—like how Warren Buffett got inspired to invest after seeing one as a kid.

There are even online games and simulators that let kids create pretend portfolios and track how their "investments" perform. If you want to go deeper, you can open a custodial investment account, which gives them real-world experience with your guidance. And don't forget, everyday headlines can be great teaching tools. When a big company makes the news, ask your child what they think that means for its stock price.

6. Encourage Entrepreneurial Thinking

Kids don't have to wait until they're adults to earn money or solve problems. In fact, things like lemonade stands or small craft businesses can teach valuable lessons about money, marketing, and grit. If your child wants to earn money, help them find real ways to do it—like helping neighbors, selling something they made, or starting a service.

Instead of jumping in to fix every problem they run into, ask questions that help them think through it themselves. Problem-solving is a huge part of financial success. And if they learn that early, they’ll be way ahead.

You can even introduce them to young entrepreneurs through YouTube or books. The more they see what’s possible, the more they’ll believe they can create something of their own someday.

7. Focus on More Than Just Money

Being good with money isn’t just about numbers—it’s about values, emotions, and mindset. Talk to your kids about how emotions can affect spending. Teach them what it means to spend on things that really matter to them, instead of just following what their friends are doing.

Let them feel financial mistakes in safe ways. If they blow all their allowance and can’t buy something they really want, don’t bail them out right away. Let them feel the consequences and learn from it.

Most importantly, show them that learning about money is a lifelong thing. Talk about your own financial journey—what you’re proud of, what you wish you did differently. Let them see that it’s normal to keep learning, growing, and adjusting your plan as life changes.

Building a Foundation for Life

Helping your child grow into someone who’s confident with money takes time, but it’s one of the most valuable gifts you can give. Whether you're teaching them the basics of saving, helping them build credit, or encouraging them to start a mini business, every step counts.

These small actions build a foundation that supports big results—like financial independence, smart decision-making, and peace of mind. The best part? You don’t have to do it all at once. Just start somewhere, and keep going.

Build your familiy's plan today

Always consult with financial professionals for personalized advice tailored to your specific family situation and financial goals.

Wealthist may earn commissions from affiliate links at no extra cost to you. We recommend products we trust, but do your own research before purchasing anything.