Key Takeaways
- When saving for children, your own oxygen mask goes on first. Emergency fund and retirement savings—check those before opening a savings account for your child (unless it’s to be generously funded by others!). Your own financial foundation is the best thing you can model for your kids.
- You may or may not be eligible for free deposits, at different eligibility amounts. Create an IRS account and file Form 4547, or do this when you do your taxes. Confirm your child’s eligibility—then let the money compound over time.
First Things First, Saving for our Kids Comes with Additional Considerations
When we think about saving for our kids, I imagine (want to be clear here–not a parent!) several thoughts likely come to mind: “I want to be responsible, I want to be a good parent, I want to give my child more than I was given” and so on…totally valid. And, first things first: before we save for our kid’s, let’s take a moment to see how our savings are really going–for ourselves.
Take a look! How is your own Emergency Fund? How many months would you be able to get by without a paycheck? How will you pay for that unexpected home or auto thing that will inevitably go awry?
How are your own Retirement Savings? Traditional savings benchmarks exist in order to make us all feel terribly behind–I get it. You can ignore those and pay attention to your own opportunities to save for retirement. Whether that’s by capturing the “match” through your employer, or setting up your own retirement account, getting started and saving money over great lengths of time is what really matters most.
How might ‘putting your own oxygen mask on first’ be what creates the strongest financial foundation for your family? It’s by modeling the importance of savings as a family value that our kids pick up these behaviors as priorities.
The New Federally-sponsored “Trump Accounts” for Kids
According to the IRS, there is a new way to set money aside for our kids in a new federally-managed savings account. These are the 530A Accounts from the One Big Beautiful Bill of July 4th of 2025, aka “Trump Accounts”, and as of July 4, 2026 you may be eligible to receive a $1000 jumpstart–if you qualify. Even if you don’t qualify for the free $1000, there is talk of as much as $250 per account donated to income-qualified families.
These accounts are essentially federally sponsored Individual Retirement Accounts (IRA) for kids; the money you put in is post-tax dollars and is not tax-deductible. It does get invested for you and grows tax free, and when the money comes out once the child is over 18 and has taken over the account, it will be taxed as income. Like other retirement accounts, there are penalties for taking the money out before age 59½. The money may be used before that age for higher education expenses or to buy a first home.
The rules state that the requirements to sign up for these accounts are: the child who the account is for must be under the age of 18 at the time of signing up, and the child must have a social security number. There is a pilot program which offers each account $1000 from the federal government, without increasing your income taxes, for children born between 1/1/25 and 12/31/2028 who are US citizens with a social security number.
“TrumpAccounts.gov projects that accounts could grow to $6,000 by age 18, $15,000 by age 27 and $243,000 by age 55, assuming the account gets the initial $1,000 Treasury deposit and no further contributions.” –CNBC
Your first step to opening this type of account is to create an IRS Account and then complete and submit form 4547 (or you can submit this form with your taxes) in order to enroll your child stating their social security number, birthday and address. If you’re interested in opening one of these accounts, you can read more about them here.
How good would it feel to get to fund your own savings and get to the point where you feel like there is enough to set aside regularly and automatically for your child?
FAQ’s
- How do I know if I’m on track and can start setting aside money for my kiddo?
Take status of your own savings: personal and employer-sponsored or individual retirement accounts. Ideally your personal Emergency Fund should cover your basic expenses for at least 3 months–it all depends on how employable you are and how many months of savings is right for you if you were to lose your income.
- Whether I do a state-sponsored 529 or a “Trump Account”, can other people put money into the account on behalf of my kids?
Yes! 529’s are state-sponsored savings accounts primarily for the money to be used later towards education expenses. Using either of these accounts a way to collect “gifts” for your child by way of friends/family contributions can be a great way to boost them up! Check with your particular state guidelines on 529’s, but the federal “Trump Account” does allow it as well.
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