06/02/2026
What a $5 Frappuccino can teach your teen about building wealth 👇
If your teen opens a Roth IRA at 18 with $1,000 from a part-time job and adds $1,000 a year, that single account could be worth nearly $500,000 by age 65. Tax-free.
Think they can't save $1,000 a year? Skipping the daily Frappuccino more than covers it. ☕
But the best financial education isn't about the math. It's about real decisions with real consequences.
A few things that actually work:
✅ Hand them cash instead of a credit card for shopping. Let them keep what they don't spend.
✅ Give them a clothing budget for the year. If they blow it by October, that's the lesson.
✅ Have the college money talk before they fall in love with a school. As one counselor put it, "Have the conversation before they buy the hoodie."
✅ With the Roth IRA, you can show them that there are certain rules with certain accounts. For example, to qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a 5-year holding requirement and occur after age 59½. Also, tax-free and penalty-free withdrawals can also be taken under certain other circumstances, such as the owner's death. The original Roth IRA owner is not required to take minimum annual withdrawals.
What's one money lesson you wish someone had taught you earlier? 👇
Please consult with a tax and finance professional before making any decisions.
Sources:
-https://www.calculator.net/roth-ira-calculator.html?cstartingprinciple=1%2C000&cannualaddition=1%2C000&cmax=n&cinterestrate=8&ccurrentage=18&cretirementage=65&ctaxtrate=25&printit=0&x=Calculate -ira-result
-https://www.ngpf.org/blog/advocacy/how-many-states-require-students-to-take-a-personal-finance-course-before-graduating-from-high-school-is-it-6-or-is-it-21/
