One of my goals is to put my kids to work so they can earn money, contribute to a Roth IRA, and learn the value of hard work and the power of investing. By age 18, they’ll have roughly 10 years of work experience and compounding behind them. If they earn an average of $7,000 a year for 10 years and achieve a 7% annual return, they’ll each have about $103,485 more than what they have now.
Accumulating $103,485 over a decade is far more rewarding than simply being handed the same amount all at once. By working for it, they’ll likely develop a deeper appreciation for money. My hope is that along the way, they’ll also cultivate good personal finance habits for the future. If they do, they’ll grow into self-sufficient adults—and I can rest easier knowing they’ll be OK.
To pay your children from a business, you’ll need to have one. Check out my guide on how to start a website to kickstart your business. Alternatively, if you’re operating as a sole proprietor, you can also pay your children for tasks that directly contribute to your income.
After eight years of fatherhood, I’ve realized just how instrumental parents are in shaping financially independent and well-adjusted adults. With that in mind, let’s do our best to set them up for success and not screw up their lives!
A reader recently asked me what types of tasks kids can do to earn money and contribute to a Roth IRA. First and foremost, check your city and state’s child labor laws as well as IRS guidelines to ensure compliance. Always prioritize safety—protecting your child from physical and emotional harm is paramount.
If you own an online business, as I do, here are some tasks your children can perform to earn money and contribute to their Roth IRA accounts. Remember, to fund a Roth IRA, your child must have earned income from a legitimate source. You cannot simply gift them the money for their Roth IRA—it has to be compensation for real work performed.
Use their photos (with both parental and their own consent) in blog posts or promotional materials for content such as family finance tips, savings goals, or lifestyle imagery.
For example, here’s a photo of my children modeling for a post about family finances, travel, personal reflections, and retirement planning. I will keep their faces private until they are old enough to understand the repercussions of being on the internet.
Compensation: Pay them a reasonable fee per photoshoot or usage.
2. Creating Simple Art or Crafts
Have them draw or design artwork for the site, such as illustrations for posts about financial education for kids. The great thing about having kids under 10 is that they are drawing all the time.
Use their handwritten notes or drawings in email campaigns, social media, or content headers to add a personal touch. My kids come home with artwork every day from school. I might as well commission them to do some artwork for my posts and podcasts.
Compensation: Pay for each piece used on the site.
3. Assisting with Organization Tasks
Involve them in simple tasks like organizing physical or digital files, such as coloring in graphs or helping arrange receipts for blog posts related to taxes.
For example, I have over 500 posts (out of more than 2,500 total) that need to be updated at least annually with new information, like the 401(k) employee contribution limit. The posts also need to be proofread for mistakes and updated for broken links.
Each post takes between 5 to 30 minutes to update, adding up to 2,500 to 15,000 minutes of work per year. If each update takes 30 minutes, that’s the equivalent of 375 full 40-hour workweeks!
By dividing the workload among the four of us, we can get through the archives much faster, ensuring all posts stay relevant with the latest details. In addition, my kids should learn a lot about personal finance along the way.
Compensation: Pay them hourly for their assistance.
4. Participation in Videos or Podcasts
Feature them in age-appropriate content, like discussing saving for toys or explaining their financial goals in videos or podcasts. One of my goals is to have them on the Financial Samurai podcast (Apple) to share their thoughts on money. It will be fun to record their evolving perspectives.
I’ll also feature their quotes on what money means to them or how they approach savings goals, such as, “What do you save your allowance for?”
It’s worth teaching your children how to create and edit videos. They can also develop scripts and proofread them, building valuable skills along the way. As I mentioned in a previous post, YouTubers today can make a lot of money—without needing to go through traditional gatekeepers.
Compensation: Pay for their time as participants and for their perspectives.
5. Testing Financial Tools, Games, Or Books
Have children try age-appropriate financial literacy games or apps that you can review or recommend on the site. They can also review financial books geared more toward children and write reviews about them on Financial Samurai. With millions of products to try out, there is no limit to the number of products your children can review.
Compensation: Pay for their feedback as “consultants” or pay per review.
6. Packing or Preparing Marketing Materials
Children can assist with small packing tasks for your business’s merchandise. I’ve written one digital-only book and two hardcopy books so far. For my upcoming promotions for Millionaire Milestones: Simple Steps To Seven Figures, I’ll need to send hundreds of bookplates to those who pre-order my book before May 6, 2025. My kids can easily help by putting address labels on packages and packaging and sealing the items.
If you’re interested in receiving one of the promotions, you can fill out the form here and follow the intructions. Those who pre-order at least one hard copy will receive a signed bookplate to stick into the book. And those who pre-order 5 or more copies will get a signed first edition, first print book to their name for their book collection.
You can purchase a copy of Millionaire Milestones on Amazon or wherever you enjoy buying books.
Compensation: Pay your children per task or per hour.
7. Naming Content or Creating Ideas
Ask your children for input on post titles or concepts for kid-friendly lessons and tips. I’m always looking for fresh ideas for blog and podcast topics. Sure, AI can help brainstorm, but kids have unfiltered creativity and often come up with the most unique angles. The key is to encourage them to share their thoughts freely and without hesitation. You can also enlist your children to learn and utilize AI to come up with ideas.
Compensation: Pay them for their creative ideas that are used.
How Much Can We Pay Our Children To Work?
So you see, there are lots of ways kids can earn and learn about earning, saving, and investing while contributing. The earnings can then be contributed to their Roth IRA accounts for long-term growth.
You can reasonably pay your children for work they perform in your business as long as the compensation is aligned with the “fair market value” for the tasks they complete. Additionally, the work must be legitimate, age-appropriate, and genuinely contribute to the business. Below is guidance to help determine a reasonable amount:
Fair Market Value
The payment must reflect what you would reasonably pay someone else to do the same work. For example:
- Modeling for photos: $20–$50 per session or photo shoot, depending on industry rates.
- Basic tasks (e.g., organizing, packing): $8–$15/hour, similar to a part-time assistant’s pay.
- Creative contributions (e.g., drawings or ideas): $10–$50 per piece, depending on the scope.
When in doubt, pay your children minimum wage. If they go above and beyond, you can pay them more. Having them start at the bottom also helps keep them disciplined.
Reasonable Total Compensation For Kids
For younger children, the total annual compensation should reflect the scope of their work. For example:
- Part-time involvement: $500–$3,000/year might be reasonable for occasional contributions.
- Consistent involvement: Up to $7,000/year could be justified for regular, meaningful work (e.g., modeling monthly, appearing in videos, or contributing creative ideas).
A reasonable total annual compensation is somewhat arbitrary. However, given your children are still in school, it is unreasonable to assume they would earn a full-time salary at minimum wage. I’d use the IRS’s annual Roth IRA contribution max as a target annual compensation figure for your children. For 2025, that figure is $7,000.
The maximum reasonable total compensation to shoot for would be the standard deduction limit. For 2025, that figure is $15,000 per person.
Align with IRS Guidelines:
- The wages must be reasonable for the services performed.
- Payments should be well-documented (e.g., a log of hours worked, specific tasks, and photos/videos of the work).
- The payments should be processed through the business payroll (if applicable), and taxes should be withheld or exempted, depending on the setup.
Benefits of Paying Your Children
Here are the three main benefits of paying your children to work on your business.
Tax Savings: If your business is a sole proprietorship or partnership (with only you and your spouse as partners), wages paid to children under 18 are exempt from Social Security and Medicare taxes. Your children’s income is also a business expense, reducing your business’s taxable income. It feels great to pay your children for their good work while saving on taxes.
Roth IRA Contributions: Your children can use their earned income to contribute up to $7,000/year (2025 limit) to a Roth IRA, enabling long-term tax-free growth. Most adults have to pay taxes on their Roth IRA contributions. However, children who earn less than the standard deduction limit don’t have to, which means tax-free income going in, tax-free compounding, and tax-free withdrawals. There is no better tax-efficient retirement plan.
Financial Education: Paying your children for real work introduces them to the concepts of earning, saving, and investing at an early age. Ultimately, parents want their children to be as knowledgeable as possible about their finances so they can grow their wealth on their own. Give them the opportunity to earn money and watch them grow.
Example Payment Breakdown For A Child Who Earns Income
If your 8-year-old models for blog photos 12 times a year and provides feedback on financial tools or games twice a month:
- Modeling pay: $100 per session × 12 = $1,200
- Feedback sessions: $20 per session × 24 = $480
- Signed book plate packaging: $1 per book X 2,000 books = $2,000
- Children product reviews: $50 per review X 5: $250
- Artwork for blog posts: $10 per artwork X 25: $250
- Updating old posts: $20 per post X 100: $2,000
- Total annual pay: $6,180
This total is reasonable, aligns with market rates, and is well within IRS guidelines. You can scale this amount up or down based on the frequency and scope of work.
You can then encourage your children to contribute $3,500 of their $6,180 earned income to their Roth IRA. To motivate them, you could match their $3,500 contribution to reach the maximum Roth IRA limit of $7,000 for 2025. With the remaining $2,680 of earned income, they can spend it as they wish, or you can further incentivize them by taking $2,000 of that amount and investing it in their custodial investment account while matching an additional $2,000 yourself!
While they may not become millionaires before they leave home, your children will likely have significantly more wealth than the average 18- to 25-year-old. Just imagine how much easier life would have been if you graduated from high school or college with $100,000 – $250,000 in investments.
My Experience Working As A Child
I started working at age 15, during my sophomore year in high school. I took the initiative to sign up with a temp agency, which would assign me to various jobs at different firms.
My first job was stuffing envelopes for six hours a day in a dark conference room. That wasn’t much fun. My second job was as a receptionist at an office, where I was made fun of by a young coworker for not knowing how to operate the phones. That also wasn’t great.
Things got more enjoyable when a friend recruited me to help move boxes for a company that was changing offices. It was fun getting to know my friend more while doing physical labor. But after the move, my back was sore, and the job made me realize that being a mover wasn’t the career path I wanted.
I also enjoyed raking leaves for my neighbors with friends, earning self-employed income. There was something satisfying about transforming a messy lawn into a clean one.
However, my most eye-opening job as a teenager was working at McDonald’s. There, I learned about power-tripping bosses, the hard labor of standing in front of a stove cooking quarter-pounders for hours, providing customer service at the register, and eating lots of free apple pies in the back.
All of these jobs paid me $4 to $4.25 per hour, which, at the time, didn’t feel like much. But the work taught me not to waste money on things I didn’t need. What I lacked, however, was an investment vehicle to make my money grow. I saved it in my bank and spent it on dates with my girlfriend.
Kids Have More Ways To Earn, Invest, And Save Today
I was in high school between 1991 and 1995, and the Roth IRA was created as part of the Taxpayer Relief Act of 1997. It was named after Senator William Roth of Delaware, who sponsored the legislation.
The Roth IRA officially became available to taxpayers in 1998. Since then, it has gained popularity due to its unique feature of allowing tax-free growth and withdrawals in retirement, as long as certain conditions are met. All kids and eligible parents should take advantage of this to diversify their retirement resources.
Here’s to more kids earning income, saving, and investing for their future! For parents, I’m confident that most of our kids will thank us for our encouragement 20 years from now.
Readers, did you make money as a kid growing up? If so, how did you spend or save your earnings? Did your parents guide you on how to invest your money? If so, what investment platforms or tools did you or your family use to help you build wealth?
Order My New Book: Millionaire Milestones
If you’re ready to build more wealth than 93% of the population, grab a copy of my new book, Millionaire Milestones: Simple Steps to Seven Figures. With over 30 years of experience working in, studying, and writing about finance, I’ve distilled everything I know into this practical guide to help you achieve financial success.
Here’s the truth: life gets better when you have money. Financial security gives you the freedom to live on your terms and the peace of mind that your children and loved ones are taken care of.
Order your copy on Amazon today and take the first step toward the financial future you deserve!
Financial Samurai was founded in 2009 and is the leading independently-owned personal finance site today, with roughly 1 million organic pageviews per month. Everything is written based on firsthand experience and knowledge, recognizing how important money is to our daily lives. Join 60,000+ readers building wealth and sign up for my free weekly newsletter here.
