Should I Invest In A Trump Account For My Kids?

Summary

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Podcast Summary: Ramsey Everyday Millionaires

Episode: Should I Invest In A Trump Account For My Kids?
Hosts: Dave Ramsey, Dr. John Delony
Date: February 25, 2026

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Episode Overview

This episode features Dave Ramsey and Dr. John Delony addressing a listener’s question about the financial steps one should take after paying off significant debt—and whether starting a new “Trump Account” (a new government child investment program) for their child is a good idea. The conversation walks through Ramsey’s famous baby steps for building wealth, the priority order of financial moves, and practical advice for parents aiming to invest in their child's future.

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Key Discussion Points & Insights

1. Listener’s Situation & Question ([00:17]–[01:24])

• Tim from LA shares that he and his wife are about to pay off $148,000 in debt and have a 3-month emergency fund.
• He wonders: After paying off debt, should they prioritize a "Trump Account" (new child investment government program) or something else, especially with a baby due soon?

2. The Baby Steps Approach Remains Best ([00:50]–[02:13])

• Dave Ramsey emphasizes following his established "baby steps" in order:

  • Pay off all debts using any available savings, including the emergency fund, if necessary.
  • Restock the emergency fund even more aggressively after debts are gone.
  • Only after these steps, start investing for retirement (15% of income).

  "Then pay off your debt today and spend the next 30 days restocking the emergency fund."
  — Dave Ramsey [01:19]

3. Prioritizing Home Ownership & Kid’s Future ([01:39]–[02:13])

• Tim asks if they should focus their post-debt financial energy on saving for a home in California, or invest for their child's future.

• Dave's advice: Stick with the plan—retirement investing comes before college savings or home down payments, even if it takes many years to achieve homeownership in high-cost areas.

  "If you're going to stay in California long term, it might take you eight years to save a down payment instead of two."
  — Dave Ramsey [01:59]

4. What About “Trump Accounts”? ([02:14]–[03:07])

• Dave outlines the “Trump Account”: A government program giving families $3,000 per child born between 2025 and 2028.

  • He recommends opening one for the free money, but not putting any of your own money in, since other vehicles like the 529 plan offer more advantages.
  • The $3,000, left to grow long term, could be worth hundreds of thousands, but that’s due to compounding, not the design of the account.

• Big picture: Accept government freebies, but for active saving/investing, use established tools.

  "I would love the $3,000 from the government. After all the money I’ve given them, it’s time they give a little back...but I would invest for your kids in a 529 plan, which has tax advantages of tax-free growth."
  — Dave Ramsey [02:26]

5. How to Use a 529 College Savings Plan ([03:10]–[04:59])

• 529 plans explained:

  • Funded with after-tax dollars; grows tax-free for education expenses (now expanded to include trade schools and supplies).
  • Dave shares he invests for his own kids this way and puts in birthday gifts, etc.
  • If a child doesn’t attend college, funds can be rolled to another beneficiary or for personal education needs.

  "A 529 plan is just a plan to save for college where you use after tax money and that money then grows tax free for education purposes."
  — Dave Ramsey [03:16]

• Retirement first:

  • Dave urges that investing for your own retirement must come before the kids’ college. If you fail to save enough for your retirement, your children may have to support you.

  "If you don’t invest for retirement, your kids are gonna have to fund it. And so that’s why we tell people to put their mask on first."
  — Dave Ramsey [04:22]

• Clarity and Structure:

  • Ramsey’s baby steps provide order to financial planning, helping avoid “squirrel” distractions—like hopping onto the latest government program impulsively.
  • Reassures Tim he’s doing great and that sticking to the order works.

6. The Psychological Challenge ([04:59]–[05:15])

• Dr. John Delony addresses the emotional difficulty of sticking with a plan when novelty and social pressure present shortcuts or distractions.

  "It feels so hard when the world's all screaming at you from every different angle. It's hard to just stay the course, just stay on the path."
  — John Delony [04:59]

• Dave plays off this with humor and empathy, noting that "Trump Account" is just the latest “squirrel!” and encourages staying the course.

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Notable Quotes

• Dave Ramsey ([01:19]):

  "Then pay off your debt today and spend the next 30 days restocking the emergency fund."

• Dave Ramsey ([02:26]):

  "I would love the $3,000 from the government. After all the money I’ve given them, it’s time they give a little back."

• Dave Ramsey ([04:22]):

  "If you don’t invest for retirement, your kids are gonna have to fund it. And so that’s why we tell people to put their mask on first."

• Dr. John Delony ([04:59]):

  "It feels so hard when the world's all screaming at you from every different angle. It's hard to just stay the course, just stay on the path."

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Important Timestamps

• [00:17] — Tim asks about investing for his child after paying off debt.
• [01:19] — Dave: Pay off debt first, then rebuild emergency fund.
• [02:14] — Dave discusses “Trump Accounts” and their pros/cons.
• [03:16] — Full explanation of 529 plans and their tax benefits.
• [04:22] — Dave explains “put your mask on first” financial principle.
• [04:59] — John reflects on emotional difficulty of staying the course.

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Summary & Takeaways

• Stick to the baby steps: Pay off debt, rebuild your emergency fund, invest for retirement (15%), then save for your children (529 plan) or home down payment.
• Only use the “Trump Account” for the free government contribution—don’t use your own funds in it.
• For robust, long-term savings for kids, 529 plans offer the best tax-advantaged growth.
• Prioritize your financial stability before focusing on your children’s funds to avoid saddling them with your retirement needs later.
• It’s easy to get sidetracked by new programs, but consistent, ordered steps build lasting wealth and resilience.

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Transcript

[Dave Ramsey]

Foreign. This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor Tim is in Los Angeles. Up next. What's going on, Tim?

[Tim]

Hey, I was curious. Me and my wife are getting ready to pay. We'll pay off our $148,000 worth of debt and. Yeah, I know, right? And I was trying to kind of see what's next because we do have like, you know, a three month, like quote, emergency fund. But you know, we're trying to wonder too, like with these Trump accounts, should we just install, like if they happen, great. But you know, we're trying to figure out like, should we start investing like in a high yield savings or something like that for our kid now who's doing April?

[Dave Ramsey]

So you're in baby step two. You've already done baby step three, and you want to skip to baby step five. Did I hear that? Okay? I would, I would do them in order, which is take your emergency fund and let's focus on the emergency at hand, which is the debt. Could you clear your debts with the amount you have in savings?

[Tim]

Yes, we could do it honestly within probably the next like 30 to 60 days, even without the emergency fund. And that's kind of like where I'm at. And you know, all right, bet.

[Dave Ramsey]

Then pay off your debt today and spend the next 30 days restocking the emergency fund.

[Tim]

Okay.

[John]

In Vegas, we call that. I call.

[Dave Ramsey]

So that's one, one idea number two, once you are through baby step three, you're now a baby step four, which is to put your own mask on and invest 15% in your own retirement.

[Tim]

The other problem is we don't actually own a house at this time, especially here in California. It's a little more difficult these days. But, and so that's kind of like the underlying question is like, do we just pay off the debt and then say, you know, do that gazelle intensity towards like a house or, you know, put our child's future ahead of our own.

[Dave Ramsey]

Well, I don't, I don't think any of those are the options. I think you should invest 15%. And if it's going to take you a long time to save the down payment, that's okay. If you're going to stay in California long term, it might take you eight years to save a down payment instead of two.

[Tim]

Right.

[Dave Ramsey]

And so that's the math of it. But I would not put any money towards. And here's the thing with the Trump accounts, the government is, did you Have a child in 2025 through 2028. Is that the plan?

[Tim]

Yes.

[Dave Ramsey]

Okay, so I'm going to open one and here's why. I would love the $3,000 from the government. After all the money I've given them, it's time they give a little back. You don't have to put any money into it. And I personally wouldn't. I did a whole video on this. It's really not super impressive, other than the free thousand bucks that will grow from age 0 to, you know, 65 into a few hundred grand. That's awesome. Not mad about that, but I would invest for your kids in a 529 plan, which has tax advantages of tax free growth. And if you want to invest outside of that, you could just open up a brokerage account in your name and you can use that to save up for their wedding or, you know, a down payment on a house for them one day.

[Tim]

Right.

[Dave Ramsey]

So I love the motive.

[Tim]

And the 529 plan, how exactly would you go about that? That's the first time I've even heard of it.

[Dave Ramsey]

Yeah, well, there's, there's a blog about it on our website and so I'll make sure we get you that link and we'll put it in the show notes as well for anyone who's interested. But a 529 plan is just a plan to save for college where you use after tax money and that money then grows tax free for education purposes. So you can withdraw it tax free to use for your kids college. And they've even expanded it now. It could be for trade schools and training and supplies and all kinds of things. So it's a great way to save for college with compound growth and some tax advantages. So that's what I'm currently doing for both of my kids. I put money in there every single month. If they get birthday money from grandma, grandpa, it goes into the 529 account. But here's the bad news. If you don't invest for retirement, your kids are gonna have to fund it. And so that's why we tell people to put their mask on first. There's 100% chance you need to retire one day, 50, 50 chance your kids even go to college and graduate. Right. So you're doing a lot of good things, Tim. You've got a great heart and you're so close. You're on the cusp of this amazing financial foundation. But I would just do the plan in order. It works, man, it works. Pay off the debt today. And if that scares you. That tells me that you probably should do it because you'll stack up that cash in no time if you put, you know, 20 grand towards the debt. And now we need 20 grand in the emergency fund. Well, now we're just paying ourselves instead of a lender. I would rather do that any day. It's hard, John. There's so much you could do. There's so many things that are good things. We want to pay off debt. We want to save. We want to save for the kids. We want to save for retirement. And that's why I love the baby steps. It just takes out all the ambiguity and gives you just a clear nope. Do that first. Nope. Do that next. And that's what I do. It's what I've done for my family. It's what John does for his.

[John]

It's just it. I get it, though. It gets. It feels so hard when the world's all screaming at you from every different angle. It's hard to just stay the course, just stay on the path.

[Dave Ramsey]

And now there's a new one, the Trump account. So now we're distracted. It's like squirrel. It's like, look over here, look over here.

[John]

Look. It's like just the folks that win unhook from the system completely and just follow a different path. And we've laid it out for you.