Giving Our Kids Their Best Financial Future

As parents, we invest enormous time and resources into setting our children up for success. Before they’re even born, we’re comparing cribs and strollers. As they grow, we research preschools, choose homes near good schools, and open college savings plans. We do everything possible to give them everything.

But maybe giving kids everything isn’t actually the best gift, especially when you consider the long-term costs.

A recent NerdWallet survey found that 42% of parents would go into debt for back-to-school items just to help their child fit in. Over half (53%) would borrow for extracurriculars—some using “buy now, pay later” services. Today, 1 in 5 young adults (ages 18–24) already has debt in collections and a quarter of 18–29-year-olds carry student loan debt—the highest rate of any age group.

Previous generations followed a fairly predictable path: graduate, get a job, buy a house, start a family. Today, that roadmap has shifted. Skyrocketing home prices, delayed workforce entry, and evolving career norms have made traditional milestones harder to reach. Gen Z also faces a unique financial landscape—frictionless digital payments, influencer-driven spending, and a heavy dose of financial anxiety due to an unstable mix in a world of rising costs and job insecurity.

A 2024 Harvard Youth Poll found that over 40% of Americans under 30 say they’re “barely getting by,” and more than 70% of Gen Z report little hope in the economy’s future. The average first-time homebuyer is now 38, and more than 70% of young adults say they don’t even want to own a home.

One of the most powerful ways parents can prepare their children isn’t by spending more—it’s by teaching financial literacy. The six tips below are my best suggestions for modeling spending habits, budgeting, and investing.

Tip 1: Say No—with Positivity

In trying to give kids every advantage, we can forget the value of limits. Saying no—to toys, tech, or even experiences—can be a powerful gift. Frame it positively: “We’re investing in what matters most” or “We’re choosing the best use of our time and money.” Avoid scarcity language like “We can’t afford it,” and try “That’s not in our plan.” Let them see that money is a tool—not a measure of worth. Staying calm and consistent in financial decisions teaches emotional resilience and long-term discipline.

Tip 2: Let Them Manage Their Own Money

Kids learn best by doing. Give them hands-on experience with money—whether through allowance, chores, or neighborhood jobs. Open a savings account for kids, and later introduce a checking account with a debit card. Teach them to track spending, review statements, and set goals. It’s far better for them to make a $20 mistake now than a $2,000 one later.

Tip 3: Help Them Build Credit

Good credit opens doors. You can help your child build it even before they turn 18.

Start by adding them as an authorized user on your credit card—they don’t even need to use it to benefit. As they get older and prove responsible, consider co-signing a starter credit card or small loan. Another option: add them to an auto loan to help them build installment credit history.

Teach the basics: pay on time, keep balances low, and don’t open unnecessary accounts. Done right, they’ll enter adulthood with a solid score and access to better loans, insurance, and even job opportunities.

Tip 4: Think Beyond 529s—Consider Investment Property as a More Flexible Option

College savings accounts and retirement funds are essential—but they’re not your only tools. An investment property can appreciate in value and generate income. Down the road, it could help pay for college, serve as your child’s first home, or provide long-term rental income. As the New York Times recently noted, some parents are rethinking the value of a traditional degree. Buying a property now, and allowing your child to live in or manage it later, can be a smart, future-proof investment.

Tip 5: Explore the Family Opportunity Mortgage Program

Fannie Mae and Freddie Mac offer the Family Opportunity Program, a little-known option that allows parents to buy or refinance a home for their child as if it were their own primary residence—even if the child isn’t on the loan.

This means lower interest rates and reduced down payments compared to investment property financing. It’s often used to buy a home for a college student or adult child with limited income. The only rule: the child must live there full-time and you can’t operate it as an investment property. Done right, it’s a powerful way to support your child’s housing journey and build equity early.

Tip 6: Talk About Turning 26—and Health Insurance

Medical debt is the leading cause of bankruptcy in the U.S. For young adults, it can damage credit, limit housing options, and affect job prospects. It is a less-discussed financial topic, but one that is having more impact on young adults’ lives now than previous generations.

Teach them early that health is a financial issue. Prepare them for age 26, when most will lose coverage under a parent’s plan. The New York Times recently reported on how stressful this transition can be and how it affects long-term plans. Teach them how to compare plans, understand premiums and deductibles, and budget for coverage. It’s a life skill they’ll use forever.

Raising financially capable kids isn’t about giving them everything. It’s about giving them the tools, habits, and confidence to thrive—no matter what the future looks like.