Suze Orman says these 5 financial checks should be cleared before adding your own money to a child’s Trump Account

Many parents want to give their children a financial boost. With the government offering eligible kids $1,000 to help start saving, it is easy to understand the appeal.

Trump Accounts are designed to let families invest money for children under 18. Eligible children born between 2025 and 2028 can receive a one-time $1,000 federal contribution.

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Still, free money does not automatically mean parents should add their own savings. Personal finance expert Suze Orman says families should accept the government’s $1,000 contribution and any money offered by an employer, but wait to contribute their own cash until their finances are solid.

“You should never turn down free money,” Orman wrote in a blog post titled Who Should and Shouldn’t Open a Trump Account.

She also warned parents thinking about contributing personal funds: “Until your financial life is in great shape, I don’t want you to contribute to a Trump Account for a child. Period.”

Can you pass Orman’s test?

Before parents or grandparents add any of their own money to a Trump Account, Orman says there are five financial conditions they should be able to meet.

She says parents should pause if they:

1. Do not have emergency savings equal to at least eight months of living expenses.

2. Carry credit card debt.

3. Are still repaying student loans.

4. Still owe money on a car loan.

5. Are behind on saving for their own retirement.

“You owe your child the security of knowing they will not need to step in and support you 20, 30, 40 years from now,” she wrote.

For many Americans, meeting all five of those standards may be easier said than done. Household debt has climbed to nearly $18.8 trillion, including $1.26 trillion in credit card balances and another $1.71 trillion in auto loans, according to the Federal Reserve Bank of New York.

Even if a family can afford to tuck away a little extra each month, Orman believes getting their own finances in order should come first.

Orman says a Roth IRA may be the better choice

For parents who are financially secure and still want to invest in a child’s future, Orman suggests considering a Roth IRA instead.

Trump Accounts allow annual contributions of up to $5,000, including as much as $2,500 from an employer. But unlike a Roth IRA, where qualified investment earnings can be withdrawn tax-free, earnings from personal contributions to a Trump Account are generally taxed as ordinary income when withdrawn, according to the IRS.

For example, if a parent puts $10,000 into a Trump Account and it grows to $20,000, the $10,000 in earnings could face a 22% federal income tax rate when withdrawn. That would create a $2,200 tax bill on the gains alone. In a Roth IRA, those same earnings could be withdrawn tax-free, as long as the withdrawal meets IRS rules.

There is one catch: children need earned income to contribute to a Roth IRA.

According to Fidelity, that money can come from a part-time job or even babysitting. For 2026, contributions are capped at $7,500 or the child’s annual earned income, whichever is lower.

Parents may also not realize that the money does not have to come directly from the child’s paycheck. If a teenager earns $3,000 from a summer job, a parent could contribute up to $3,000 to a Roth IRA on that child’s behalf.

Should parents contribute to a Trump Account?

A Roth IRA will not work for every child, especially younger children who have no earned income. But that does not mean parents need to rush to put their own money into a Trump Account.

It is natural for parents to want to give their children a financial cushion as they become adults. But paying down debt, building emergency savings and staying on track with retirement goals can be just as important as setting money aside for a child. If those boxes are checked, contributing may make sense for some families.

As Orman points out, one of the best financial gifts parents can give is ensuring they will not become a burden to their children later in life.