07/15/2026
A first paycheck often feels small — but the timing behind it can be meaningful. Research consistently shows that when money is set aside earlier, it benefits from something that can’t be replicated later: time.
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 more than $400,000 by age 65 (assuming 7.5% growth, compounded annually). Tax-free.
Think they can't save $1,000 a year? Skipping the daily sweet treat or coffeehouse drink more than covers it. ☕
For parents of teens and young adults, a summer job can be a natural entry point for conversations about long-term thinking and financial habits, without overcomplicating the moment.
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.
If you’d like help setting up a Roth IRA for your teen—or just want to talk through how to start teaching these habits early—I’m happy to help.
📅 Schedule a quick call: https://calendly.com/crosstimbersfg
📞 (817) 766-7757
📧 [email protected]
🌐 www.crosstimbersfg.com
