Putting aside money or children

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Do you put aside money for your children, in their own bank account for when they are adults?

No, I can't afford it

38%

[ 63 ]

No, never thought of it

18%

[ 31 ]

Yes, $1-50/kid/month

[ 13 ]

Yes, $51-100/kid/month

[ 15 ]

Yes, more than $100/month

[ 12 ]

Yes, not a set amount, but I do every so often or when we get extra money, like tax returns

18%

[ 30 ]

Total Votes : 164

amother

Turquoise

Mon, Dec 28 2020, 1:28 pm

I can only afford to put aside $50 a month. But I have it automatically invested in an index fund for my children. BEH it will add up over time.

amother

Emerald

Mon, Dec 28 2020, 1:40 pm

metacognizant wrote:

Also I think this thread title: Money OR Children, is accidentally great. Put aside the money, keep the children, obviously!

Yup mine are priceless too LOL

amother

Ginger

Mon, Dec 28 2020, 3:13 pm

We put aside 100 pounds a month per child. To help them buy a house iyH.
My parents did this for me and we hope to continue the chain.

amother

Emerald

Mon, Dec 28 2020, 3:33 pm

amother [ Ginger ] wrote:

We put aside 100 pounds a month per child. To help them buy a house iyH.
My parents did this for me and we hope to continue the chain.

I wish we could do this but we don't have £400 a month extra for this.

amother

Honeydew

Mon, Dec 28 2020, 3:42 pm

Our money is tied up in business ventures. For now, (b'h it should continue) we make enough to be able to set them up when the time comes and/or help them out with a house.

amother

Babypink

Mon, Dec 28 2020, 11:18 pm

amother [ Mauve ] wrote:

I have UTMA accounts for each child in the Vanguard--meaning the accounts are in my name jointly with theirs. They have target retirement funds for different dates, and they decide the balance of high risk/low risk stocks/bonds in the portfolio depending on how far out the retirement target is. I open for each of my children a retirement target account using the date around when they will be 20. At different points in time, depending on our finances, I've had automatic monthly transfers of $50-100/child into these accounts, or else I put a larger sum in for each child once a year when I have the funds (eg tax refund etc).

I like this idea, thank for sharing! I googled it and on the Vanguard website found the following regarding this type of account, "There is a significant impact on federal financial aid. The account is treated as the child's asset and weighed more heavily in financial aid calculations."
Curious what your thoughts are about this?

amother

Babypink

Mon, Dec 28 2020, 11:19 pm

amother [ Apricot ] wrote:

We do direct deposit monthly into mutual funds. Once we hit our goal amount we reduce the amount we put in for older kids so we can still afford to do it for new babies.
One of the nice things about doing it monthly is you buy when the mutual funds are at diff prices. Sometimes high and sometimes low.

I'd love to do this. How did you set this up? I know nothing about mutual funds.

amother

Babypink

Mon, Dec 28 2020, 11:21 pm

amother [ Sapphire ] wrote:

we put away monthly that gets transferred to a mutual fund account, each child has their own account. I believe it's 500 a month per child that we put away. we also put away a larger sum of money when they are younger.

my oldest had gotten an inheritance and we decided to "match" it for the other children hence the lump sum.

We have a small family and I had money put aside for me as a kid and want to do the same for my children.

I realize we are starting off better off financially then many and have a smaller family then most. we would do less if we couldn't afford it.

we also don't plan on necessarily paying for their wedding, college tuition, down payment for house, kollel support.... We plan to raise them to be responsible people and then let them decide how they want to spend the lump sum they will be getting at 18.

How did you set up the mutual fund? Sorry I'm so lost. Sounds like a great idea but no clue how to do it

amother

Wine

Tue, Dec 29 2020, 2:29 am

amother [ Babypink ] wrote:

How did you set up the mutual fund? Sorry I'm so lost. Sounds like a great idea but no clue how to do it

Call Vanguard or Fidelity and they'll get you started.

baby12x

Tue, Dec 29 2020, 2:40 am

amother [ Babypink ] wrote:

Basically when it comes to financial aid, your child's money is weighed more heavily than your own.
So ex, if your child has $100 than they will be expected to spend all $100 before receiving financial aid. If you have $100 you would only be expected to spend a percentage before receiving financial aid.
So that's why it can be recommended to not put money in your child's name but rather in your own.

baby12x

Tue, Dec 29 2020, 2:41 am

amother [ Babypink ] wrote:

How did you set up the mutual fund? Sorry I'm so lost. Sounds like a great idea but no clue how to do it

You might want to look into Index Funds as opposed to Mutual Funds.
Mutual funds are heavily managed and therefore often have higher fees.
Google it a bit to see what you feel comfortable with

metacognizant

Tue, Dec 29 2020, 6:44 am

FWIW our savings (and actually all our “extra” money that exceeds a target cap on our checking account) are all in index funds using Betterment. Any investment account will have fees so you need to factor those against the long term performance to see if you’re really getting the best deal. My husband calculated that until we have a certain very high balance (I think it was $250,000 in there) this would be the best deal for us.

amother

Azure

Tue, Dec 29 2020, 8:33 am

No idea about others, but Schwab has no fees to buy and sell mutual funds and stocks online. They allow you to buy shares of s&p500 companies in $5 slices. (not saying I recommend buying those with long term savings for your kids, just saying it's an option)
If you have an account with them, I think you can open an account for each kid online, but I'm not sure about that if you don't have any accounts existing.

basmelech2

Thu, Dec 31 2020, 1:29 pm

amother [ Lilac ] wrote:

How can I set this up?
Sounds so easy and good to be true?

This is a Canadian savings plan. It usually has a good rate and some government match
It can be used for the wedding, Yeshiva or Sem and college or other
I’m originally from Canada and raising our family in the USA and looking for a similar savings plan.
The best I’m seeing so far from this thread (which was in itself way fir helpful than google) is mutual funds.

amother

Blonde

Thu, Dec 31 2020, 4:46 pm

I would love to get practical advice in this area. If any of you are very happy with your investment strategy, can you please share it here? Also, please include any consultants or firms that you used, and how to work with them. Thank you!!

amother

Sapphire

Thu, Dec 31 2020, 4:49 pm

we use vanguard. no broker. we just set up accounts with a custodian (adult in charge because they are underage) and then we transfer money automatically every month in to each account.

amother

Blonde

Thu, Dec 31 2020, 4:51 pm

Thank you Sapphire. I will look into it.

basmelech2

Thu, Dec 31 2020, 6:19 pm

amother [ Sapphire ] wrote:

we use vanguard. no broker. we just set up accounts with a custodian (adult in charge because they are underage) and then we transfer money automatically every month in to each account.

Thanks!
Would you know what the charge is for these accounts? Are you planning to use it strictly for college or is it a general fund? Will it be taxed when taken out?

amother

Sapphire

Thu, Dec 31 2020, 7:11 pm

we aren't saving it for college. we plan to just give it to our kids and let them decide what to do with it. they can use it for college if they want, or down payment, or to start a retirement. I believe there are fees just like regular investments. do you have any other investments? I believe it will be taxed the same way any stock would be once taken out.

amother

Babyblue

Thu, Dec 31 2020, 10:34 pm

We have a few different things for each of our kids.
1. They each have a investment account with mutual funds and whatnot.
2. They each have a savings account that we put about 100-200 a week into per kid. This will be theirs to either put a down payment on a new home or buy a car or something like that.
3. They each have a savings account my parents set up for them and put money in monthly.

Each of these where setup within a month of birth. My 4 year old has currently over 50k dollars in her name at this point. Hoping that by the time they are 21 they can keep the investments for their retirement and use the other stuff for down payments and stuff. We plan on paying for whatever education they need and buying them their first car. We have a separate account of our own that is not in their name (it’s a joint acct for all the kids.) that we put 1k a week into that is for their education. We started that also when our oldest was born. Hoping that from that account by starting 3 years before our oldest started school we will have enough to pay their tuition and then college and graduate school. ( we only have a few kids and tuition right now is inexpensive so we are putting in a lot more then we spend a year for now.)

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