Maconomics Founder Ross Mac joins Wealth! to discuss how parents can ensure their children have better financial prospects than they did.
Mac highlights the importance of education: as a parent, Mac teaches his children that money comes from work and that they are shareholders, not just consumers. Custodial Roth IRA accounts are also among Mac's top recommendations: a few hundred dollars every few months could be the difference between your child having student loans or asking you for financial help in the future, Mac signals.
Mac says 529 accounts, or tax-advantaged college savings plans, are also a key strategy to consider. The Maconomics founder explains that the accounts are like 401Ks, tax-free as they grow and when needed for qualified educational expenses. For parents who aren't sure about their children's college future, Mac adds that the IRS has just changed the rules of the saving plan to allow custodians to roll an unused 529 into a Roth IRA.
Adding children to a credit card also has several benefits, provided parents have healthy credit, Mac says: it can teach children about the importance of credit and establish their own credit early on.
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