Savings for kiddos

[disneymagicgirl]

We have a savings acct for each of our kiddos where we put any bday/other gift money they receive throughout the year. It is just in the bank, not earning much interest. What would be a good place to invest it? We plan to hold it until they need to buy a car or house or something big like that. This isn't their college savings, so not interested in putting it in a 529. Any suggestions?

 

[TLuvsD]

Read the book "paying for College without Going Broke" (you can get it at your local library) before you do anything. Even if this isn't college money, it all counts when you are filling out fin'l aid forms. I realize your kids are young, but good planning is good planning.

 

[lady9]

We have a savings account at a bank for our children's money. When they get a certain amount saved, I transfer it to their mutual fund. There are a lot of good funds out there. Theirs has been doing quite well lately. Our DS was able to buy his first car through saving. We told him we would match him dollar for dollar up to $4000 so he was able to get a really good car. Also, I think he treats it better because he knows he bought it with money he saved and earned.

 

[disneymagicgirl]

We have a savings account at a bank for our children's money. When they get a certain amount saved, I transfer it to their mutual fund. There are a lot of good funds out there. Theirs has been doing quite well lately. Our DS was able to buy his first car through saving. We told him we would match him dollar for dollar up to $4000 so he was able to get a really good car. Also, I think he treats it better because he knows he bought it with money he saved and earned.

Do you just have a mutual fund through an online service? Something like vanguard?

 

[lady9]

No we use a financial planner. He takes care of our kids' 529 plans and our IRAs as well. I don't know anything about investing and have to trust we've chosen wisely. So far, the fees and rates of return we have are in line with what we have read online.

 

[dpswift]

I know that the interest rate is not much better but I used their money to buy CDs when they got enough. You could also look into mutual funds.

 

[imsayin]

Do you just have a mutual fund through an online service? Something like vanguard?

Vanguard is the best! If you want your money to grow, they have the lowest fees around. You can set up an account online.

 

[aprilchem]

I have UTM (Uniform Transfer to Minors) accounts for all 3 of my kids. It's like a mutual fund for a child; an adult (me) is the trustee and can use the money for the benefit of the child. It works well for us.

 

[Jeff_G]

I would stick to the boring savings account or CD, perhaps money market account but they are not really paying much more then a savings account these days. Anything beyond that will come with the risk of loosing principal. You have to evaluate your own tolerance for risk, also remember your probably have a shorter time horizon for this money because your children will be wanting it at age 18.

Vanguard is a good online mutual fund provider with some of the lowest fees. The bogleheads web forum has a lot of goof investment advise.

 

[disneymagicgirl]

I have UTM (Uniform Transfer to Minors) accounts for all 3 of my kids. It's like a mutual fund for a child; an adult (me) is the trustee and can use the money for the benefit of the child. It works well for us.

Will check it out. Thx!

 

[Jeff_G]

Just to clarify UTM (Uniform Transfer to Minors) is a tax classification of a bank account or investment account, not an investment itself. Your savings accounts can be classified as UTMA as can an investment account. Once you establish the UTMA account you then still need to pick investments.

http://www.investopedia.com/terms/u/utma.asp