There are several reasons to hire your child: to teach her about finance, which will teach her responsibility and the value of work. However, my top financial reasons are:
- First, to write off some of the cost of raising your child – Let’s imagine your 14-y.o. daughter handles your business social media, does basic bookkeeping in QuickBooks, and cleans your offices for $8,000 per year. Why shouldn’t she be paying for her own clothes and makeup, saving for a car, buying her own iPad, etc.? This teaches your child to budget and be responsible with money.
- Second, so that she can set up a Roth IRA as early as possible. Say what? That’s right – there is no age limit on setting up a Roth IRA – you just need earned income. The younger and lower-earning the individual, the more sense it makes to fund a (non-deductible) Roth IRA. You don’t have to put your own child’s money in it, just fund it yourself. (Then you can also teach her about investing at an early age.)
Fiscal Fitness News 