Putting money away for kids

hoboken

Thu, Mar 17 2016, 5:54 pm

For those of u who set up trusts for ur kids, how do u prioritize adding to those accounts vs adding to ur own savings? I put 10k away for each kid, but I'm not sure how much to add and how often...

The Happy Wife

Thu, Mar 17 2016, 6:54 pm

Maybe talk to a financial planner. I agree with agreer (heheh Smile

) that you need to make sure your own savings are taken care of first. Once you have your own personal savings goals, then see what you can afford to save for the kids.

amother

Sienna

Thu, Mar 17 2016, 6:59 pm

Yours come first, but when there's something left over, you can put it in theirs. Also, whenever someone gifts them money (obviously not just a few dollars, but like bar mitzvah money) you should put it in their accounts.

Amarante

Thu, Mar 17 2016, 7:37 pm

Is there some reason you want to set up trusts for the children.

Unless there is a tax advantage, what's the point. Those people I know with trusts for the kids either had a LOT of money (millions) so trusts were part of estate planning to avoid taxation in three generations but most people don't leave taxable estates. Or they set up educational savings accounts which were tax advantaged but those aren't trusts.

I don't know normal middle class people who set up trust funds for kids other than in their wills or as part of a living trust where children as beneficiaries had the assets if estate held in trust if parents died when they were young.

The most important thing is for you to save and invest as much as possible. You can then determine how much, if any, you can afford to give your children. Again, unless there are tax benefits, better just grow your own wealth. If you have enough to retire comfortablely on, you can either start giving it away appropriately or children will inherit.

chocolatecake

Thu, Mar 17 2016, 8:46 pm

When each kid is born we put 1000 away in account for them and then add a little bit each year on birthday. My kids arent old enough to be earning money yet but I would like for their bar mitzva money summer money babysitting money etc. to be put away in this account as well. This way when they get married or move out they will have have a little something to start them off. My parents did this for me and I had 7000 when they gave me access to the account when I was 19. 7000 is obvioulsy not a lot of money but its enough to buy a used a car or furnish your first apartment - things my parenrs werent helping me out with.

amother

Plum

Thu, Mar 17 2016, 8:47 pm

We put away for everyone monthly.

For me - its automatically deducted into my 401 K.

DH does his own 401 K plan.

For each kid we put aside a set amount of money into a mutual fund monthly.

The money is taken from our checking account automatically.

This way it is just a standard expense we expect (sometimes we will take a short break, like if I have a baby and am not working for a month or 2), but otherwise we always do it.

I do wish we were saving a bit more to move into a larger home (we own ours) but haven't sat down yet to figure that out.

(Each of my children got baby gift money which we put in a bank account for them and on each birthday we put cash presents in there. That I consider their money. The money that goes in the mutual fund is really for us to use for weddings, bar mitzvah, seminary, yeshiva, support, etc)

SRS

Thu, Mar 17 2016, 8:58 pm

Frankly I think the time to talk about setting aside money for a child in the child's name follows when other milestones are being met: A one year emergency fund, fully funding retirement accounts for a number of years running, on track to pay down a mortgage in under 30 years, and funding 529 education funds where the designee can be changed if need be. After you have taken care of your own household, then it might be time to talk about setting aside major money for children. Until that point, birthday gifts can go into a custodial account, but if one is wondering about priorities, it is "me first." Your children won't pay for your old age. You will need to do that yourself.

hoboken

Thu, Mar 17 2016, 11:27 pm

We are maxing out all retirement options and Baruch HaShem have been saving quite a lot for ourselves. I want to set my kids up with some cash the way my parents did for me. I never actually had to dip into it, so it's added to our savings now, but it was always nice to know it was there.