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Should My Child Have a Summer Job – Yes or No?

ByMichael

The answer? ABSOLUTELY!

Many parents start thinking about summer jobs for their older children when summer rolls around. But it’s not just about earning money—it’s about making intelligent decisions to benefit you and your children.

Let’s break down key considerations and opportunities when it comes to making those summer earnings:

1. Understanding Employee vs. Contractor Status

Understanding whether your teen will work as an employee or an independent contractor (e.g., yard work, babysitting, etc.) is essential. This status affects how they file taxes and what deductions they can take. 

Employees will have taxes withheld from their paychecks, while contractors must handle their quarterly tax payments. 

2. Opening a Roth IRA

Why not turn a summer job into a retirement planning lesson? Opening a Roth IRA for your child allows them to invest part of their earnings for the future. 

What will a Roth look like for my child 50 years from now? 

If you made an initial contribution of $7,000 in your Roth IRA for 50 years with an 8% annual compounded interest rate, it will grow to approximately $328,311 by the time you are 68. 

The benefits are undeniable.

Schedule a call for help with getting this set up.

3. Standard Deduction for Dependents

For 2024, the IRS allows a standard deduction of up to $14,600 for single filers. If your teen earns less than this, they likely won’t owe any federal income tax.

This means they could take a job and use their earnings for savings or expenses without worrying about a significant tax impact.

4. Scholarships and Educational Opportunities

Some summer jobs, especially internships, offer scholarships or stipends that can be applied toward education expenses. These are typically tax-free if used for tuition, fees, books, and supplies required for coursework.

Encourage your teen to seek out and apply for these positions—not only do they provide valuable work experience, but the financial benefits are twofold.

5. Benefits Beyond the Pay

Summer employment fosters more than just financial earnings; it cultivates lifelong skills and character. Earning money instills a sense of responsibility and independence in teens, enriching their understanding of money management and paving the way for prudent financial decisions in the future.

6. Start Now, Not June 1st

“The early bird gets the worm” is a proverb that means people who start something early have the best chance of success…

Starting early leads to success. Encourage your child to begin their job search well before summer starts to maximize their chances of securing a beneficial position.

Tune into our blog next week:

5 Keys to Finding the Perfect Summer Job

Final Thoughts

A summer job is more than just a way to earn money—it’s a foundation for teaching financial literacy and responsibility. By choosing tax-smart employment and making informed decisions about income and savings, your child can maximize their earnings and get real-world financial management education. 

Encourage them to approach their summer jobs with a strategic mindset—it’s an investment in their future that will pay dividends down the road.

Have more questions? Schedule a call with us.

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    Wasted Time

    ByMichael

    What is wasted time?
    Unscheduled, unplanned time doing the simple things of life
    As kids out summers were spent riding our bikes, playing in the creek or playing any game we could make up. All of this was outside and required very little parental supervision.
    Ain’t it funny how the best days of my life was all that wasted time
    – lyric from Keith Urban’s song – Wasted Time
    Today, I observe adults and children over scheduled with activities and over connected with every electronic device possible. Wasted time is where creativity is created.
    We are the “Attachment Generation”.
    Based on my observation about us becoming the “Attachement Generation”, I began to pose this question to friends and clients in my conversations.
    “What is your daily routine and how connected are you”.
    The #1 answer was – immediately when I get up or I take my phone to bed with me.
    I would get the answers and ask my favorite question – why?
    Why do you have to keep your phone with you, even taking it to bed?
    Why do you immediately look at it when you wake up, no matter the time of the night?
    They answered with various reasons that attempted to make the attachment to their phone seem normal.
    This simple idea of not having your smart phone with you 365/24/7 caused people stress.
    “When people are so plugged into their devices around the clock, they often lose the ability to be fully present to themselves and to other people,” says Jeffrey Rossman, Ph.D., director of Life Management ar Canyon Ranch in Lenox, Massachusetts. “It negatively impacts our peace of mind and relationships with others.”
    When is the last time you had “Wasted Time?”
    If “I can’t remember” is your answer then you have become part of the Attachment Generation. It is time for a digital detox and some “Wasted Time”.
    Take my seven steps toward finding your Wasted Time.
    1. Let go of the phone – start with taking it out of the bed. Your phone needs to sleep in the other room, not in the bed or on the bedside table. I made this change and the results are positive. (the phone was on the bedside table)

    2. Don’t touch your phone for the first 30 minutes of your day. Let your mind and your body refresh from the night’s sleep.

    3. Eliminate all of the “push” notifications on your phone and your desktop. This also includes your watch. I see many people distracted and looking at their smart watch for the text notifications during a meeting. It is unprofessional and inconsiderate.

    4. Drive your car without looking at your phone at stop lights. (No texting should not even be mentioned)

    5. Stop using your phone to occupy all of your free time. If you are standing in line at the grocery store, it is Ok to let your mind be unoccupied.

    6. Meals are Digital Free.

    7. Plan some wasted time each day without a screen in front of you. That includes a TV. Go workout, take a walk or have a conversation with your spouse, your children or take a bottle of wine and go visit a neighbor. I prefer reds however a chilled white will work this summer.
    Be honest
    You probably use your smartphone way more than you should, but you’re far from alone. It’s addictive checking social media, playing games and of course just staring down at it when you’re in a socially awkward situation.
    Try either taking the Apps off your phone or try one of these six apps to break your addiction.
    Tell me about your results of finding your Wasted Time.

  • | | |

    Which Way Are You Going?

    ByMichael

    DOES IT MATTER?

    One of the questions that I am often asked in general conversations is “where should I be investing my money now?”.

    My answer is always the same.

    “That would be hard for me to answer since I do not know what goals you are trying to reach with your money.”

    The questioner then follows up with, “well it doesn’t matter, I just wanted to know what you thought was a good investment right now.”

    Without having a plan, the odds are high that your future is much like a Financial Zombie!