Child’s Savings account

amother

Khaki

Wed, Nov 04 2020, 1:49 pm

amother [ OP ] wrote:

I am curious.

If someone can’t pay their mortgage, they’d first reach out to a Rav to gather money for help? Or use money they put in an account for their children that sits there? To put back later.

Does this money not count as an income?
Even to a Rav?

If you use your child's money to pay the mortgage now, how will you pay it next month? Will it save the home or will you lose it next time the mortgage is due? And then he's left with nothing.
If this really will save the home, sit him down and ask his permission.

asmileaday

Wed, Nov 04 2020, 3:23 pm

amother [ Lilac ] wrote:

We have 2 accounts for kids:

Their money - baby presents, bar mitzvah, birthday, Chanukah, earnings. I would never touch that money.

My savings for them: I put away a set amount of money monthly for each kid. That money is mine. Maybe I’ll use for yeshiva,college, weddings, support. Or whatever. That money I feel comfortable touching at any time

Where do you keep this money? My kids money is in an envelope in my room. They can count it whenever they wish. I feel like if I'd keep it in the bank they wouldn't feel like it's theirs. It would be too intangible. Any ideas? (It's under 1k each.)

BetsyTacy

Wed, Nov 04 2020, 3:33 pm

My bank, and I imagine many banks have child accounts, where one parent is on the account but the bank is technically in the chid's name, it is under his/her social security number.
They can look at the statments each month/quarter and see that the money is growing. Granted it is an absolute pittance these days, but it is still more than zero. Back in the olden days, there was actually a program to encourage savings and they would give a little something to each child account that grew during the year.

It was actually nice they had their own accounts set up already. Later, they had their private money in the savings account and it was easy to transfer from parents checking to kids checking when bankrolling them for expenses during college.

amother

Lemon

Wed, Nov 04 2020, 4:57 pm

Many people consider money given to them when a baby is born to be a gift to them so they might use it to buy a crib or groceries or to give Mom a new dress or day at a spa. I always considered it a gift for the baby and stashed it away in the kid's name, whether a savings account, bond, mutual fund or other investment doesn't matter.

amother

Lilac

Wed, Nov 04 2020, 5:10 pm

asmileaday wrote:

Their money is in bank I show them statements every so often once old enough. After my sons bar mitzvah he had a nice amount - plus he worked a bit. So we sat down together and put it in a mutual fund. I thought it was a good financial education for him.

The money I save for them is in mutual funds. I use direct deposit monthly automatically

amother

Babypink

Tue, Nov 24 2020, 11:47 pm

WHen each DC was born we opened a 529 account for college savings. Any gifts they got, including when they were born, and for various occasions during the year, went into that account. When they were around 10 or so, I don't remember exactly, we stopped putting in birthday and chanuka gift money into that account and just gave it to them.

Money that they earn is theirs to keep.

When they got bar/bat mitzvah gifts, they kept a few hundred in cash each to spend on whatever. The rest went into a savings account--they each have their own. Occasionally they ask if they can take some money from it for a large purchase, and if they have most of the money from other sources we say yes, but our general expectation is that that money will sit there untouched. I suppose when they turn 18/graduate high school/hit some other milestone we'll make the money availale to them but encourage to use it toward big ticket, meaningful purchase, not random things they want in the short term.

amother

Wed, Nov 25 2020, 2:58 pm

Thanks for all the replies!

It was baby money when they were born.
I think I’m going to invest it into stocks for them.

I guess I just saw it pointless to sit in a bank.
I believe in savings as investments in things that build interest or equity. Money that just sits is best used for immediate expenses.

I appreciate all the input and real advice!