savings

More Things Kids Want to Know About Money

In part two of this series, Janet Bodnar answers children's questions about jobs, saving and investing.

Kids ask the darnedest questions about money. And now they can ask them virtually in person. If you'd like us to answer your child's question, send it to us at moneysmartkids@kiplinger.com. Or make your kid a Web star: Upload your own video to YouTube and send us the link.

Here's a sampling of what's on kids minds. See Part I of this series, What Kids Want to Know About Money, for more of their questions and my answers.

EARNING MONEY

I'm trying to make money, but it is real hard for me to decide what I can do. What is the best option to make $600 in four weeks? -- Carmin

Where can I find a job that lets me make heaps of money and have fun at the same time? -- Jane

I am 11 and want to earn some money. People tell me I can wash this car or mop this floor, but I don't like jobs like that. -- Courtney

Last summer I had a job de-tasseling corn. But this summer I don't want to do a painful job. Plus, it took away my time to hang out with friends. I am 14, and dog-walking, gardening and babysitting are not my thing. I need a fun, easy job. -- Sami

Don't we all, Sami. Parents, there's a theme here: Kids want to earn a lot of money with a minimum of effort. You need to set them straight about how the job market works and suggest realistic ways they can pocket some dough.

SAVING AND INVESTING

My name is Rachel and I am 13 years old. I walk dogs and babysit, and my Mom makes me divide my money into thirds -- one-third for short-term wants, one-third in savings and one-third for long-term needs. I have $600 in regular savings now. Should I try investing in stocks or put my money into a certificate of deposit? I'd like to use some of it for a car when I am about 17.

Rachel, I'd stick with bank CDs. The stock market is too risky for money you're going to need in less than five years to buy that car. Use this tool to find the best CD rates.

I know a lot about stocks and mutual funds, but I am only 12 and I'm not made of money. What are some cheap ways to buy mutual funds or stocks? -- Danielle

Try a mutual fund with a low minimum deposit. Charles Schwab's index funds require an initial minimum of just $100, and they charge superlow annual fees. Schwab S&P 500 Index and Schwab Total Stock Market Index let you invest in the entire stock market. Another alternative: Monetta's Young Investor Fund, which you can also open with a minimum of $100. It comes with games and educational resources, plus a rewards plan for college tuition.

If you want to buy individual stocks, an ING ShareBuilder account charges a fee of just $4 per investment with no minimums.

I am 19 years old. How much money should I be saving per month to become a millionaire by 35? -- Anthony

Hmmm. I admire your ambition, Anthony, but you'd better rethink your time frame. Depending on your rate of return, you'd have to invest roughly $2,000 to $4,000 per month to reach your goal that quickly (see What Will It Take to Become a Millionaire?).

RETIREMENT

I am 18 years old and I have a good job making a good amount of money. I want to prepare for the future and was thinking about opening a Roth IRA. -- Pedro

Great idea, Pedro. As long as you have earned income from a job, in 2009 you can contribute up to $5,000 to a Roth IRA or the amount of your earnings, whichever is less (see Why You Need a Roth IRA).

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