3 Ways I'm Teaching My Kids Healthy Investing Behaviors

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How did you first get started with investing? My dad taught us kids by example. He opened custodial brokerage accounts, bought us stocks, regularly invested, and — most important held onto them.

It took me well into my adulthood to appreciate just how lucky — and unusual — it was to be taught sound investment principles at such a young age. My dad's influence shaped how I approach investing today.

Teens and investing

The good news is that teens are interested in investing. At Vanguard, we've seen a 56% increase in custodial brokerage accounts from 2020 to 2025.

The not-so-good news is that the lines between investing and gambling are blurred as never before. It's never been easier to speculate on a penny stock or the next men's college basketball winner — all from the same "brokerage" app. More often, short-term bets are long-term losers.

How can you teach teens the difference between gambling and investing? In our family, it starts with three simple steps.

1. Open an account in your child's name

I opened a custodial brokerage account for each of my children — but you can also open one for a niece, nephew or grandchild. Once the minor comes of age (typically from 18 to 21, depending on the state), the account transfers to them, and they gain full control.

In a Vanguard custodial brokerage account, families can access a broad lineup of investments, including mutual funds, stocks, bonds and ETFs (exchange-traded funds).

If education savings is your primary goal, opening a 529 account on behalf of your child might be a better fit. These state-sponsored plans offer investment line-ups with potential tax benefits.

Additionally, with Trump accounts set to launch in July, consider enrolling your child, as qualifying children might be eligible for free money from the government and/or other sources.

If you're not sure which type of account to open, resources such as Vanguard research can lend a hand.

2. Give the gift of investments

My sister is a buyer for a teen clothing store, so she's always on top of the latest fashions and often gives my kids merchandise samples. But when it comes to gifting for my kids' birthdays and milestones, "Zia" ("Aunt" in Italian) follows the family tradition our dad started: She gifts them investments.

A newborn outfit is adorable — but it will be outgrown quickly. Investment gifts endure. Over time, they tend to grow and create a lasting emotional connection.

According to Vanguard research, children who received investments as gifts reported feeling more like investors, more confident in their financial knowledge and more open to passing that knowledge on to future generations.

It's also easier than ever to get started. Many brokerages, including Vanguard, offer the ability to purchase ETFs for as little as $1 through fractional shares/dollar-based investing.

3. Teach them about investing

Vanguard's principles for investing success — set a goal, maintain balance, mind your costs and stay disciplined — provide a helpful framework for investors of any age.

I start by explaining to my kids that they have a long time horizon, which means they can afford to take more risk (set a goal).

I also show them that the stock ETFs they own hold thousands of companies (maintain balance and mind costs). Those companies make the phones they use, the clothes they wear and the shows they watch. That connection makes investing feel real.

We also talk about volatility. Stocks tend to grow over the long-term, but they don't move in a straight line. When markets fall, it doesn't necessarily mean it's time to sell. If your long-term goals haven't changed, your investments probably don't need to, either (stay disciplined).

Most important, keep these conversations a no judgment zone. Let teens ask questions. Starting these discussions early helps remove the stigma around talking about money and builds lasting confidence.

Leaving a legacy

Our dad passed away more than 20 years ago, but his legacy of sound investing habits lives on through my sister and me — and now through our children. Consider giving gifts of investments — and knowledge — to start your family's investing legacy today.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.