Raising a Future Homeowner Starts With the ‘Coffee Can’ Strategy and Allowance

Most people don’t think about saving for a home until adulthood, but what if you could give your child a jump start?

The “coffee can” investing strategy promoted by Kansas City financial analyst Matthew Ankrum, paired with a weekly allowance can help you do just that. 

With the “coffee can” strategy, you buy stocks from quality companies that show consistent long-term growth potential, put the stock certificates inside a coffee can, and don’t touch them for at least 30 years.

“A childhood allowance and the ‘coffee can’ investing philosophy share an important principle: consistency and patience,” explains Julie Beckham, financial education officer at Rockland Trust in Boston.

Together, they can show your child that today’s decisions create tomorrow’s opportunities and help build the wealth and habits required to achieve homeownership and other important financial milestones.

Why the “coffee can” strategy and a weekly allowance go hand in hand

You can’t execute the “coffee can” investing strategy until you have money to do so, and that’s where an allowance comes in. 

“It gives your child an opportunity to make decisions with their money and that’s where the real learning begins,” says Mike Kern, CPA and founder of FreeBudget in Greenville, SC.

Once they receive an allowance, they have many options. Do they spend it on toys, food, subscriptions, or do they save or invest it? As a parent, you can help them make the decision to invest it in stocks and save for a house.

Since investing can be overwhelming and even scary at first due to risk involved, the
“coffee can” strategy is invaluable.

“It’s simple, easy to follow, and can perpetuate a positive cycle for your child. As they begin to see their money grow, there’s a good chance they’ll naturally pay closer attention and want to invest more of it,” Kern explains.

Essentially, an allowance and long-term investing teach two complementary lessons. 

“An allowance teaches a child how to manage money, while long-term investing teaches them how money can grow,” says Melissa Caro, certified financial education instructor and founder at My Retirement Network in New York City.

How early money habits shape future homeowners

One of the greatest gifts you can give your child is a healthy relationship with money and a thorough understanding of how finances work. 

“An allowance creates natural opportunities to introduce concepts like saving and delayed gratification,” explains Beckham. 

The goal isn’t necessarily to have your child thinking about a down payment today, but to help them recognize that long-term financial goals become much more attainable when you start building good habits early. 

When children have even a small amount invested, they watch the market fluctuate, see how long recoveries can take, and begin to understand that investing is measured in years, not days. 

“By the time they’re investing larger amounts as adults, market volatility feels familiar rather than frightening,” Caro explains.

Match your allowance strategy to your child’s age

Sandy Yong, Toronto-based TEDx and keynote speaker, award-winning author of The Money Master recommends giving your child an allowance based on their age.

“For example, if a child is 10 years old, they may receive $10 a week,” Yong explains.

Kern suggests tying the allowance to chores, like cleaning up toys or even mowing the lawn if your child is older. 

“This makes them feel like they’re working towards a goal, such as a down payment and actually have some skin in the game,” Kern says.

For a younger child, keep the lessons simple by introducing the idea of saving toward a short-term goal. 

“A clear jar or an interactive savings tracker helps them see their progress and understand that money grows over time through consistent saving, which can help them achieve something they want, like a new toy or a fun day at an amusement park,” says Beckham. 

As a child reaches middle school, encourage them to create a basic budget by dividing their allowance into spending, saving, and giving categories. 

“This is also a great time to introduce the concept of earning additional money through extra responsibilities and discussing the difference between wants and needs,” Beckham explains.

For teens, you can begin connecting everyday financial decisions to larger life goals, such as homeownership.  

“Ultimately, the amount of the allowance matters far less than the consistency of the conversations. 

“Regular opportunities to earn, save, make financial choices, and truly explain the ‘magic’ of compound interest will help children develop the confidence and skills they’ll need to navigate homeownership and other major financial milestones throughout their lives,” adds Beckham.