How to Start Building Your First $500 for Kids

Saving your first $500 is the foundation of your financial independence journey. You don’t need a job to begin—there are plenty of small, realistic ways to start building money early.

1. Earn Money From Simple, Everyday Sources

You can start building savings from:

Allowances
Chores around the house
Babysitting or pet-sitting
Helping neighbors with small tasks
Tutoring or volunteering stipends
Any small cash you receive from gifts or holidays

Even a few dollars at a time adds up.

2. Aim to Save at Least $500

Make $500 your first milestone.
It’s big enough to build discipline but small enough to be achievable.

More is always better — but hitting your first $500 proves you can create a habit.

3. Put Your Savings Into an Account That Pays Interest

Once you have money saved, don’t let it just sit in a no-interest piggy bank.
Put it somewhere that grows while you sleep.

Here are simple options:

Option A: Open a Fidelity Account (Recommended for Teens With a Parent)

When you open a Fidelity youth or custodial account, your cash automatically goes into a Fidelity core account.

The core account automatically invests your uninvested cash into a money market fund (MMF).
This MMF pays interest, so your idle cash earns money without you doing anything.
It’s completely hands-off and beginner-friendly.

Option B: Use a Treasury Bill ETF

If you want to earn a higher yield:

You can buy a Treasury bill ETF (for example, one that tracks short-term U.S. government bills).
These ETFs pay dividends, which usually match current interest rates.
They are extremely low-risk and easy to hold.

4. Let Your Money Work For You

Once your savings are in the right place:

Your cash earns interest
Dividends get paid automatically
Your money starts compounding

And this is how you turn small beginnings into real wealth over time.

FAQs

There is no minimum amount required to open or maintain a standard Fidelity brokerage account.
You can open the account with $0, and deposit money whenever you’re ready.
(If using Fidelity Go®, you still open with $0, but the account begins investing once your balance reaches $10.)
Yes. Anyone under 18 needs a parent or guardian to open a Fidelity Youth or custodial account.
It’s the default cash account inside your brokerage. Fidelity typically places your uninvested cash into a money market fund (MMF) automatically, which earns interest for you.
Money market funds invest in short-term, low-risk securities. They aren’t FDIC-insured, but they are considered extremely low risk and widely used for storing cash.
It’s an ETF that holds short-term U.S. Treasury bills. These ETFs pay dividends similar to current interest rates and are considered one of the safest investment options.
Its price may fluctuate slightly, but it’s very stable. The dividend payments typically outweigh small price changes.
It’s a good place for short-term savings or cash you’re not ready to invest yet. For long-term goals, many people add index funds or other investments.
Yes. Both money market funds and Treasury bill ETFs are highly liquid—you can withdraw or sell during market hours.
Often yes. Money market funds and T-bill ETFs typically pay higher interest than many traditional savings accounts.
Start small. Move $20–$50 into a low-risk option like a money market fund or T-bill ETF. You’ll gain confidence as you watch your money grow.