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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]This is great for those of you who can swing it - but also, matching money or saving for them so they can keep their earnings as spending money isn't really teaching them about money, though it's certainly setting them up to not have to worry about it in the future.

We need our kids to help pay for car insurance, gas, etc. and also to save for college with their earnings. With our household parental income (which must be much less than a lot of you), I don't think we'll also be able to start retirement accounts at 13. [/quote]

IDK. 49 yo holder of 30-yr IRA here. Matching absolutely does teach the value of taking advantage of an available match (something so difficult for people to get that 401k rules have changed to make opt-outs required vs opt-ins for this reason).

More than that, though, success managing money is behavioral. What can be taught by providing the money for the investment is: “You are going to do this every year from now on, no matter what.” And that is what I learned and did, through some pretty high water—I kept putting away the $2k, then the $6k, in years when my personal income from all sources was under $25k annually.

My parents’ HHI was never over $125k in early 2000s dollars. They have never “gifted” money for cars, houses, private school education, any of that. Our HHI has never been over $200k. The IRA is now worth more than $1m.

Of course, as the PP said—no mandates. But this is a specific form of teaching that I will prioritize even if that other stuff seems completely out of reach (as it does to us as well).[/quote]

I’m the pp arguing this doesn’t teach kids about money. It teaches them that parents will give them more money through tax vehicles. Your point about matching is useless if you never get a match. We’re in our 50s and neither of us have ever had one and we’ve both moved around.

When your kid gets a job, it’s just as easy to say, “hey Larla, if your co offers matching that means it’s free money.” That is teaching versus, showing them a statement where you have matched their salary, while they spent all their money.[/quote]

Sure, any given person may not (statistically speaking, likely will not) get a job with a match. But[b] in that case having formed the habit of retirement saving[/b] and the sense of identity around it—that this is just a thing that person does year in and year out, one of the first priorities in the budget and not what happens to “extra money” if there is any—is proportionally even more important. T[b]hat’s the behavioral part.[/b]

Most people can’t, and if you don’t want to for whatever reason that’s your call too. I am just saying that having it done for me did not teach me that my parents were going to give me more money thru various tax-protected vehicles—because they haven’t, which was part of the conversation at the time about opening the IRA.

[/quote]

This makes no logical sense. They haven't formed a habit of retirement savings because they haven't saved the money. The parents gifted it to them. The behavior is the action taken by the parents.

Sure, it's nice to see a big account that your parents gave you, but don't mistake what it is. A gift.

[/quote]

Yes—it was a gift that they gave in such a way that it established a habit. They wrote the check to me and said: this is for a retirement account only. I put it in my bank account. They helped me set up the IRA (which at that point had to be done on paper). I wrote the check each month from the bank account to the IRA.

Those are all steps the unfamiliarity of which regularly stop people from developing a habit of saving early in life. So my parents greasing the skids for those habits by providing the money and the guidance was a huge benefit to me.

The biggest benefit was that it meant I didn’t experience the risk as a reason not to start, which is a showstopper for a lot of people.

The total dollars gifted were $12k over 6 years. The habit has been priceless. I think it was one of the smartest parenting moves my parents made and am really grateful to them for it.[/quote]

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