How to Build a Long-Term Investment for Your Child with Just $5
If I’m honest, when I first thought about investing for kids, it came with a big side of mum guilt. As a parent, you want to build a secure financial future for your child, maybe help with a home loan, education, or even a first car. But when you’re counting pennies for school shoes and stretching groceries to payday, investing can feel like something “other people” do. The kind of families with spare thousands in a savings account. Not mums like us. And definitely not starting with as little as $5 or rounding up spare change.
Then I discovered Raiz. And honestly? It shifted my mindset from “I can’t afford to invest” to “I can’t afford not to.” It helped me see that small, regular contributions could gradually build wealth and create a long-term investment plan for my child’s future.
Why We Love Raiz for Single Mums Investing for Kids
Let’s be real, most of us don’t need another complicated thing to manage. What I love about Raiz (and why it feels so aligned with single mums across Australia) is that it’s low-pressure. It works quietly in the background through round-ups, investing your spare change into a diversified fund without you having to think about it.
It’s what I call “mum math.” You buy a $4.80 coffee, and that extra 20 cents gets invested. That unnoticed cash becomes part of a long-term investment strategy designed to build growth gradually. Yes, you’re not moving hundreds of dollars. But, you’re making small, regular deposits that can compound over time thanks to interest and market returns.
Plus, Raiz lets you choose from different portfolios that include shares and bonds, helping you manage risk based on your comfort level. Some parents may consider investment bonds or other structures with certain tax benefits, but this option makes it simple for beginners.
For families focused on building financial freedom, it’s powerful to know you can invest in your child’s financial future without needing high income or professional wealth management.
If you’re looking at the bigger picture, we’ve also shared practical tips on financial planning for single mothers to help you create a solid foundation beyond just investing.
The Myth: “I Need Thousands to Start Investing for Kids”
Let’s bust this myth: you do not need thousands to start investing for your child. When it comes to long-term wealth, time matters more than the amount. That’s the real investment advantage. Here’s the golden nugget: compound interest. It’s like your money having babies… and then those babies having babies. Over a long-term investment horizon, even small amounts can grow significantly. If you’re curious what $5 a week could turn into, you can play around with the Compound Interest Calculator to see the numbers for yourself.
Let’s look at the strategy:
If you invest $5 a week from birth to adulthood (18 years), that’s $4,680 contributed. With potential returns over time — even at a modest rate — that money can grow beyond what you personally put in.
Compare that to trying to save a lump sum later while juggling mortgage repayments or other family expenses. Which feels more realistic?
Small, regular contributions win. Especially when you consider higher returns over the long-term versus keeping everything in a standard savings account with a lower interest rate.
Of course, markets move. There will be market fluctuations, which are a part of investing. But long-term planning helps smooth out short-term risk.
How Raiz Kids Work (The Practical "How-to")
Raiz Kids is a feature within your Raiz Invest account. It allows you to create a sub-account in your own name, allocated for your child. This means you:
- Stay in full control of the investment account
- Choose the portfolio (mix of shares and bonds)
- Manage contributions
- Can withdraw funds if needed
- Track everything in one place
It’s not a separate legal structure like investment bonds, so you may want to consider tax implications depending on your personal income and marginal tax rate. While Raiz offers simplicity, seeking professional advice is essential if you’re unsure about how this fits into your broader financial planning plan.
The strategy is simple: Set up a recurring $5 deposit and make regular contributions (that’s one coffee a week!)
If you use the promo code BEAN30, Raiz will automatically invest $30 into your new account once you’ve made your first investment of at least $5.
So technically? You start with $5… and get a $30 boost to kickstart your child’s investment journey. It’s a small head start, but when we’re talking long-term investing for kids, every little bit helps.
Teaching Them to Fish Beyond Investing for Kids (Financial Literacy)
As mums, we don’t just want to hand our kids a lump sum at 18 and hope for the best. We want them to understand it and know the importance of good financial decision-making.
That’s what I love most about using Raiz Kids as part of our approach to investing for kids — it creates teachable moments. Instead of money being this mysterious, stressful thing adults whisper about, you can literally show them the graph. You can point to the ups and downs and explain, “See? This is how investing works. It grows over time.” For many single-parent families, money has been a source of stress. But teaching your child that money is a tool, not something to fear, can help set them on a different journey.
If you’re curious about how it all works in practice, you can check out how Raiz Kids works here: https://raizinvest.com.au/raiz-kids
Common Questions about Micro-Investing (FAQ)
Q: Is my money locked away?
No — and this is huge for solo parents.
Life happens. Cars break down. School excursions pop up out of nowhere. With Raiz (including Raiz Kids), your money isn’t locked away until your child turns 18. You can withdraw funds if an emergency hits.
Of course, the goal with investing for kids is to leave it there to grow. But knowing you can access it if you absolutely need to? That peace of mind matters when you don’t have a second income to fall back on.
Q: Is it safe? Raiz uses bank-level security measures to protect your account and personal information. It’s a regulated investment platform in Australia, and your funds are held securely.
As with any investment, returns aren’t guaranteed because markets go up and down — that’s part of how investing works. But from a platform and data security perspective, it’s built with the same level of protection you’d expect from major financial institutions
Q: What are the fees?
Raiz charges a small monthly account fee (which varies by balance) plus underlying investment costs.
But here’s the honest mum-to-mum take: for many of us, the automation is the magic. The Round-Ups. The recurring $5 investments. The set-and-forget structure that makes small investments for beginners actually happen.
Because what’s more expensive in the long run: a modest monthly fee, or never starting at all? For busy single mums juggling everything, sometimes paying a little for simplicity and consistency is exactly what makes building a nest egg possible.
Simple Financial Planning for a Stronger Financial Future
You don’t need to be a Wall Street wolf or have thousands in the bank. You just need your phone and $5. That’s it. One small decision that future-you (and future-them) will be grateful for. Whether your goal is education, helping avoid debt in adulthood, or contributing to children’s future milestones, you are helping build something meaningful.
You’ve got this. Download the app, skip one treat this week, and watch the magic happen.
This post is general information, not personal advice. Invest only after reading the PDS and seeking financial advice. TMDs and PDS are available at www.raizinvest.com.au.
