How Do I Keep My Child From Being Spoiled By A Trump Account?

Summary

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Podcast Summary: "How Do I Keep My Child From Being Spoiled By A Trump Account?"

Podcast: Ramsey Everyday Millionaires
Publishing Date: April 3, 2026
Hosts: Dave Ramsey & George Kamel
Episode Theme:
This episode explores the challenges and considerations parents face when setting up financial accounts—specifically the new Trump child savings account—for their children. The hosts unpack both the financial strategy and the parental responsibility needed to prevent entitlement and ensure long-term success for their children.

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Main Themes & Purpose

• Balancing Generosity with Responsibility:
  The hosts discuss ways to provide financial legacies for children without fostering a sense of entitlement or carelessness.
• Financial Products for Kids:
  Evaluation of the new Trump Account versus traditional 529 plans and brokerage accounts.
• Practical Parenting Insights:
  Emphasis on both modeling prudent money behavior and maintaining parental control over significant assets until children are mature.

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Key Discussion Points & Insights

1. The Heart of the Question: Teaching Values First ([00:16]–[01:41])

• Parental Role in Shaping Money Mindsets:
  Dave Ramsey stresses that how parents model financial behavior is paramount.

  "Whatever you show your kids the most is what they're going to pick up on." —Dave Ramsey [00:58]

  • Living thoughtfully and avoiding wasteful spending are critical real-life lessons.
• Account Structure Matters:
  Ramsey highlights that strategy matters, specifically, who controls the money and when.

  "Do you want to have control over that money or do you want him to receive this money at 18?" —Dave Ramsey [01:10]

  • The plan for the account must align with the child’s maturity and family values.

2. Trump Account Mechanics & Limitations ([02:04]–[03:16])

• Limited Financial Advantage:
  George Kamel points out the Trump account mainly offers a one-time government contribution for qualifying birth years.

  "There's not a whole lot of advantages outside of the free thousand dollars." —George Kamel [02:04]

  • He’s willing to take the bonus but refuses to contribute significantly beyond that due to the lack of parental control.
• Control Risks at Age 18:
  Major concern: At 18, the child directly controls the assets, regardless of readiness.

  "They don't need hundreds of thousands of dollars at age 18." —Dave Ramsey [02:29] "Their prefrontal cortex isn't baked yet." —George Kamel [03:16]

  • Uncertainty about future rules and uses for the account is also flagged as a problem.

3. Alternative Approaches: Keep Control, Hold Values ([03:29]–[03:55])

• Preferred Solutions:
  • Education: Use a 529 plan—money is locked for educational purposes.
  • Other Needs: Open a traditional taxable brokerage account in the parents’ names. The money can be gifted as the child demonstrates maturity.

  "I want to have the control." —Dave Ramsey [02:46] "I go with the taxable brokerage account in my name that I can…gift that money when I believe they are ready to handle it." —George Kamel [03:29]

  • This approach allows targeted support (e.g., wedding, first car, down payment) when the child is truly ready.

4. Taxes, Gifting Limits, and Practical Execution ([04:09]–[04:50])

• Tax-Free Giving Strategies:
  Dave and George highlight generous annual gifting limits ($18,000 per parent per child; larger estate exemption thresholds) for strategic long-term support without gift tax trouble.
• Take Advantage of Free Money:
  If eligible, take the $1,000 grant—then invest it and don’t hype it to the child until the right time.

  "Maybe that's for the first car." —Dave Ramsey [04:47]

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Notable Quotes & Memorable Moments

• "Whatever you show your kids the most is what they're going to pick up on." —Dave Ramsey [00:58]
• "I want to have the control. I don't want you ending up with $100,000 or $500,000 at age 18." —Dave Ramsey [02:46]
• "Their prefrontal cortex isn't baked yet." —George Kamel [03:16]
• "These are the same kids taking out $250,000 for degrees that they don't need." —George Kamel [03:23]
• "If your child can get the free thousand bucks, I would absolutely take that and let it ride." —George Kamel [04:38]
• "Don't even tell them it exists." —George Kamel [04:44]

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Timestamps for Key Segments

• [00:16] Listener question from Kyle: How to prevent entitlement with a Trump Account?
• [00:48–01:41] Dave Ramsey discusses modeling money values at home.
• [02:04–02:46] George Kamel breaks down the Trump Account’s limitations.
• [03:16–03:55] Debate over child maturity and need for parental oversight at age 18.
• [04:09–04:50] Tax & gifting strategies; pragmatic recommendations.

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Tone & Takeaway

The episode is thoughtful yet practical, blending classic Ramsey philosophy—live below your means, prioritize wisdom over windfalls—with nuanced debate about new financial products. Both hosts urge parents: Build the right financial structure, be intentional with modeling, and don’t confuse love with handing over the keys to a fortune at 18.

Final Advice:
Use government incentives where possible, but keep meaningful assets under parental control until your child demonstrates readiness—both in character and financial sense.

Transcript

[Dave Ramsey]

Foreign.

[George Kamel]

This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor Today's question comes from Kyle in Florida.

[Dave Ramsey]

He says, I'm going to be a new dad soon and want to do everything I can to set my son up for success. We plan on opening a Trump account for him and contribute $5,000 a year. How can we avoid a mindset of entitlement in our son if this account has hundreds of thousands of dollars in it when he turns 18? We'd like to reinforce the idea that we did not set up this account to squander the money away on ridiculous material purchases every 18 year old dreams about. What's the best way to set up boundaries on how this money can be used?

[George Kamel]

That's a great question.

[Dave Ramsey]

It's a really great question. And there's kind of two sides of it, George. The first side I'm seeing is just raising a child in the way that he should go, right? Like there's what, what you're teaching him about money in the next 18 years is really huge. And then there's the side of is this really the best option for you? Do you want to have control over that money or do you want him to receive this money at 18? So there's kind of the, the strategy side of how is it smart for him to re to receive that kind of money at 18. So let's talk about both. I'll kind of start with the, the raising side. I think whatever you show your kids the most is what they're going to pick up on and they're going to learn. And so if you've created a lifestyle where we don't squander things in our home and we're very thoughtful about our purchases and we don't buy things to impress other people, your child is going to pick up on that. So a lot of that is due diligence on your part. Now when it comes to the Trump accounts, you know, if you want to participate, I suppose you can. It, it's not, it's not what I do. I do five 29s for my kids and we also have a brokerage account that we know we're going to gift money to them out of when, when we're ready to help with things like down payments and things like that. So that's how we do it. What do you do, George?

[George Kamel]

So I actually looked into this and I realized there's not a whole lot of advantages outside of the free thousand dollars. If Your child is born and 25 through 28. So I had a kid in 2025. I will happily take $1,000 from the government because I've given much more to them.

[Dave Ramsey]

Yeah.

[George Kamel]

And so I'll take that 3,000 for my little guy and it'll grow. I will not be contributing more than that because to your point, at 18, they get control if it's a Trump account.

[Dave Ramsey]

Yeah. And they don't need hundreds of thousands of dollars at age 18.

[George Kamel]

And you hope they're going to go, I'm going to use this for a down payment.

[Dave Ramsey]

Or you don't, but you don't know.

[George Kamel]

Yeah. And we don't know exactly how they're going to guard against you using it for other things. They haven't been super clear about what you can use it for outside of education. And a down payment, that's actually a

[Dave Ramsey]

major difference that I want to talk about. You know, you look at things like Roth IRAs or custodial accounts or 520, they're established. Like what it is is what it is with these Trump accounts because it's tied to it has the ability to change over time. It's not locked in and what it will be and what it can change into. And I think that's something worth noting. But yeah, I'm the type of parent. I want control. I don't want you ending up with $100,000 or $500,000 at age 18. I want to have the control.

[George Kamel]

Remember us at 18. No. 18 year old is their. Their prefrontal cortex isn't baked yet.

[Dave Ramsey]

Yes, I was not it.

[George Kamel]

These are the same kids taking out $250,000 for degrees that they don't need.

[Dave Ramsey]

That's right. That's not good.

[George Kamel]

Let's not give them that control. So I do exactly what Jade says. I got a 529 plan for education. I'm funding that. And then for other needs outside of education, I go with the taxable brokerage account in my name that I can.

[Dave Ramsey]

My name. That's right.

[George Kamel]

And then I can gift that money when I believe they are ready to handle it. So if it's. I want to cover the wedding. Great. I can take that money out and I can pay for the wedding. If it's their first car, I have control over that of what car I choose to buy for them.

[Dave Ramsey]

Yeah, that's right.

[George Kamel]

And same thing with a down payment. If you want to give them a house, I want to be able to control that. And so I think that's very wise to do And I'm not mad at the Trump accounts I just don't think it's all it's cracked up to be. But I love that it's starting the conversation about investing for your kids at an earlier age.

[Dave Ramsey]

It is and you have up to $18,000 per parent per child per year that you can give without really any.

[George Kamel]

Without having to fill out the gift tax. Exactly form and so that's. That's a great way to go as well. And the exemption is now if you're a married couple it's like $30 million high for lifetime your gift your estate exemption. So not something most people have to worry about hitting so great question Kyle. I if you want to do this I would contribute to the taxable brokerage account and if your child can get the free thousand bucks I would absolutely take that and let it ride. Cuz even a th000 bucks from 0 to 60 don't even tell them it exist. I mean they'll know it exists when they turn 18. They're like sweet free money.

[Dave Ramsey]

Yeah.

[George Kamel]

Maybe that's for the first car.

[Dave Ramsey]

That's right. Perfect.