Ramsey Expert Warns Parents on Kids' Investments

Parents want to help their children. They might consider accounts like those sometimes called "Trump Accounts" to save money for a child's future. This sounds like a good idea.

But George Kamel, a financial expert at Ramsey Solutions, gives a warning. He says parents should not put money into these accounts for their kids if they still have their own debts. Kamel himself took $1,000 for his son. He put it into a Roth IRA for his son, but he made sure his own finances were in order first.

Kamel stresses the math behind this choice. If a parent has debt, like a credit card bill, it often carries high interest. The money used to invest for a child could pay off that high-interest debt instead. Paying off debt saves more money than the child's investment might make.

This means parents should focus on their own financial freedom first. Becoming debt-free makes a family stronger. It sets a better example for children too. Parents can then invest for their kids from a position of strength.

Source: Fox Business