Kelly Pedersen was recently surprised to find out his 14-year-old daughter had thousands of dollars sitting in her digital wallet.
“She does all this entrepreneurial stuff. She has a lemonade stand where she’s making — like on a Saturday she’ll make four or five hundred dollars,” he says. That hasn’t stopped her from acting like a kid, he says: “she goes to Starbucks and asks me for 10 bucks.”
Pedersen, retail leader at professional services firm PricewaterhouseCoopers, says this kind of money maneuvering isn’t uncommon for kids his daughter’s age and younger. In fact, 86% of kids ages 7 to 14 — which PwC refers to as Gen Alpha — have their own money, according to a PwC survey published in March. Nearly all of them, 97%, say they make independent spending decisions at least sometimes. PwC surveyed 1,004 kids ages 7 to 14 with a margin of error of plus or minus 3.7 percentage points and 1,009 parents of children in that age range with a margin of error of plus or minus 4.1 percentage points between January 29 and February 13, 2026.
“Gen Alpha, they’re entrepreneurial. They have their own money. Sometimes their parents don’t even know they have money,” Pedersen says.
“They’re all into resale,” Ali Furman, consumer markets leader at PwC adds. “They’re doing online auctions, they’re buying and selling and participating in those markets, and they’re making money. And even if they’re not, they’re getting money for allowance and chores and odd jobs, and they really care about making money.” Resale website Depop has a minimum age requirement of 13 for sellers on its platform and those sellers under 18 may need a parent’s permission and assistance with payments.
And while those young folks may know how to spend money, many of their parents would also like to see their kids thinking about the future and starting to build savings or investment portfolios. Families have a variety of tools to support that goal. There are government-sponsored accounts like 529 savings plans for educational expenses and 530A or Trump Accounts families can use to build investment portfolios for their kids. Large online brokerages also allow parents to open custodial accounts for kids so they can invest on their child’s behalf. Parents whose children earn income can also open a custodial regular or Roth individual retirement account for them.
Additionally, companies like Acorns and Greenlight offer accounts to help teach kids how to invest themselves.Acorns’ Early Invest is a custodial account with a kid-friendly app to go with it while Greenlight’s investment offering for kids is a brokerage account held in the parent or guardian’s name. The child can make trade requests which the parent needs to approve.
Kids can’t open any of these accounts on their own, though, so parents should help their children understand how investing works including the benefits — and risks — of putting money in the stock market, financial experts say.
“Good money management is about trade-off decisions, and we want to teach kids as early as possible to think about the consequences and trade-off decisions,” says Noah Kerner, Acorns CEO. “If you spend more, you’re going to save less, and if you put more into savings, you might not grow your money [as much as you could] with investing.”
Education makes money concepts less intimidating for kids
Bellen Woodard has been making her own money since she was a child model around age 6. She often wanted to donate her earnings to charities or use some of it to buy toys, she says.
Money seemed “so much bigger,” when she was a young child figuring out how it worked, Woodard, now age 15, says. The examples her parents and four older brothers set helped her learn how to make spending decisions for herself.
With the help of her parents and brothers and the money she earned from modeling, Woodard founded More Than Peach, an art brand promoting inclusivity, when she was just 8 years old. The brand’s products are sold at Target and Woodard has authored two acclaimed children’s books. She’s a member of Acorns’ Kid Advisory Board, which aims to promote financial literacy for young savers and investors. The entrepreneur and activist is thinking about bigger money goals like saving to buy her own car soon after she turns 16.
Woodard says many of her peers are often caught up in trends like buying skincare and makeup. And while Woodard does like to shop for clothes, especially at thrift stores, and spend her money going to the mall or movies with friends, she tries to be judicious about those spending decisions. She appreciates that having her own money gives her the independence to spend on the things she wants, but her bigger priority is saving toward short-term goals like the car or longer-term ones, like paying for college and her future beyond school, she says.
It helps that Woodard has a required personal finance class in school. Some of the money concepts like investing in the stock market were intimidating at first, she says, but less so after she studied and understood them.
Her parents didn’t “center” money in conversations as Woodard and her brothers were growing up, her mom, Tosha Woodard says. She always had access to her own money and used piggy banks as a young child until she graduated to a debit card with a joint account with her parents when she was 8 or 9. Bellen’s parents focused more on nurturing their children’s gifts and interests like entrepreneurship and education and supporting their endeavors. Bellen has never been much of an over-spender, she and her mom say, so her parents haven’t had to do too much correcting in that regard.
Kids often learn about money vicariously through their parents’ actions, says Brittney Castro, a certified financial planner with financial technology platform Chime.
“One of the best things you can do as a parent is like really just obviously take care of your own finances and really watch even the words you say with money or the mindset you have with money, how you treat money day to day, because kids are picking all of that up, whether you’re aware of it or not,” she says.
Use the right tools to set kids up for success
Parents have a few different ways they can help their kids get acclimated with money and start saving for their futures. They can open a joint savings account with their child at many banks as long as the parent is the primary account-holder. High-yield savings accounts typically offer higher interest rates than traditional savings accounts.
Families who expect their child to go to college may consider opening a 529 savings plan which offers tax advantages like tax-free growth when it’s used for qualifying education expenses and potentially state tax-deductible contributions. Funds in the accounts can be used for a variety of qualifying educational expenses including tuition at colleges and trade schools as well as qualifying professional apprenticeships. An adult must open and manage the account, but a kid can contribute their own money, too.
Newly launched 530A or Trump Accounts offer another way for parents to invest for their kids. They function similarly to individual retirement accounts. For 2026 and 2027, contributions to the accounts can total up to $5,000 a year. Withdrawals are generally not permitted before the calendar year the beneficiary turns 18. Starting that year, the account is generally taxed like an IRA, meaning that withdrawals are taxable and a 10% penalty applies if you take the money out before age 59½, with some exceptions like using the funds for education costs or first-time home purchases.
Investment accounts can be great for building wealth, and helping your child establish good money habits as they learn the power of compound interest. Even if you or the child isn’t contributing that much, “the whole point is setting up the habit,” Castro says.
Parents can help their kids get invested with fewer withdrawal restrictions than 529 and 530A accounts through custodial brokerage accounts known as UTMA or UGMA accounts. These brokerage accounts, available for parents to open for any child under age 18, allow kids — with their parents’ help managing the accounts — to start building investment portfolios with stocks, mutual funds and bonds. Children gain full control of the account when they reach a certain age, from 18 to 25, depending on the state.
For kids who earn money, parents may want to open a custodial IRA or Roth IRA on their behalf. Parents can contribute up to the lesser of the regular maximum contribution limit of $7,500 in 2026 or their child’s total annual earnings.
Additionally,Fidelity offers teen investment accounts, which are opened by parents, but managed by the teenager, who can make their own investment decisions with some guardrails — teens can’t invest in crypto or foreign currencies through these accounts, for example. Charles Schwab has joint brokerage accounts for teens and their parents.
The right account or tool for you will depend on your family and child’s specific financial goals, Castro says.
About The Author
