Building Tomorrow’s Financial Foundation Today
Remember that first time you wished someone had taught you about money earlier in life? That moment when you realized how much easier things might have been if you’d understood saving, investing or compound interest a little sooner?
In today’s world, understanding money and investing is more important than ever. When children learn about investing early, they develop valuable skills that will benefit them throughout their lives. By helping children understand financial concepts, we can equip them with the tools to make responsible money decisions as adults.
Family Involvement
Parents, grandparents, aunts, uncles and trusted mentors play an important role in financial education. Our program provides tools and resources to help families have meaningful conversations about money, setting financial goals and making informed investment decisions together.
The Golden Rule: 50/50 — A Simple Principle With Powerful Results
The 50/50 approach creates a simple framework that children can easily understand and practice. When money comes in — whether it’s allowance, gift money or earnings from chores — it gets divided into two equal parts:
Enjoying Today
Half for Today: This portion goes into a savings account for short-term needs and wants
- Children learn to make intentional choices about spending
- They practice budgeting, comparison shopping and delayed gratification
- Each purchase becomes an opportunity to discuss value and priorities
Growing for Tomorrow
Half for Tomorrow: This portion goes into an investment account where it can grow over time
- Children witness firsthand how compound interest works
- They develop patience and long-term thinking when they see their money increase
- Early exposure to investing concepts builds confidence with financial decisions
This balanced approach can help children avoid the temptation of spending everything immediately. Instead, they learn that money can simultaneously bring joy today and create opportunities for tomorrow.
Compound interest is the interest earned on both the initial investment and the interest accumulated in previous periods.
Age-Appropriate Learning Paths:
Homestead’s Approach to Meeting Them Where They Are
Discoverers (Ages 5-7)
Watch as their eyes widen when they understand that money can grow! At this age, concrete experiences and simple routines create the foundation for a lifetime of smart money habits.
Investigators (Ages 7-9)
Harness their natural curiosity to explore where money comes from and how it can work for them. Their endless “why” questions become opportunities for financial discovery.
Connectors (Ages 9-11)
This is when the lightbulb moments happen! They begin connecting today’s choices with tomorrow’s results, a breakthrough in financial understanding.
Navigators (Ages 11-13)
Feel the pride as they start charting their own financial course, understanding growth and making increasingly independent decisions.
Explorers (Age 13+)
As teens get their first jobs and receive those exciting first paychecks, this is the perfect time to connect their new earning power with long-term investing strategies that can multiply their hard-earned dollars.
Making It Real for Your Child
Start by having your children choose a specific goal they’re excited about. Maybe it’s a gaming system, a
special trip, their first car or college. Then, together you can:
- Calculate how much they need
- Decide on a timeline
- Track progress
- Celebrate milestone moments together
The most important lessons come from doing. When children actively participate in their investment decisions — with your guidance and encouragement — they can develop confidence and skills that can serve them throughout their lives.
Our Upcoming Goals Calculator is a great way to spark money conversations with your kids. Work together to map your saving for things they care about. You can enter different savings amounts and time horizons to show them how saving and investing can help turn dreams into reality.
Homestead Funds Account Options for Minors
Uniform Gift/Transfer to Minor Account
A Uniform Gift/Transfer to Minor Account (UGMA/UTMA) is a custodial investment account that allows adults to save and invest on behalf of a minor, with the assets transferring to the child’s control at the age of trust termination in their state.
Coverdell Education Savings Account
An Education Savings Account (ESA) is a tax-advantaged investment account that allows families to save for a child’s educational expenses from kindergarten through college.
Custodial Roth IRA (if the child has earned income)
A Roth IRA is a tax-advantaged savings account that allows you to contribute after-tax dollars and potentially withdraw funds tax-free to help fund educational expenses, a first home purchase (up to $10,000), or certain medical costs if needed.
To learn more about each account type, including the advantages and considerations, visit the Account Types page.
A Guide to Teaching Kids Money Smarts
See Account Types
Open An Account for a Young Investor