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2nd Trimester
Money money money MOOONNNNEEEYYY
Who has a savings account set up for their kid already?
I started one for Olivia on the first of this month, it's like a little blue water jug (think the office water cooler) with a lid that counts the change as you put it in. I'm surprised to report that just with change I find in my car and the house, and the change I get when I make daily purchases, I've saved 50 bucks so far.
But I'm wondering if anyone has done any research (or if there's any investment bankers on here??) on the best places to put that money once I get a decent amount saved. There's like 10% interest on peer to peer lending, but is that risky?? Any opinions or experience?
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Re: Money money money MOOONNNNEEEYYY
Savings for whatever she needs it for-- my parents saved about 13k for me, with the intention of letting me have it after college to put a down payment on a house or car, whatever major purchase I needed at the time.
But I ended up needing it to bail myself out of credit card debt, then used it to pay rent on a home when I needed to move immediately for safety sake and didnt have the deposit and everything avail. I want to make sure she has the same safety net that I did-- whether its the perfect wedding dress, a quick divorce, a townhome, or an emergency credit bail out like I needed.
And yeah, I was thinking I'd try to get it to more around 1000 or so before I invest it anywhere. I'm just thinking ahead and learning about my options, I'll probably be ready by the time she's a year old or a little sooner, depending on how I'm doing financially and how much I can afford to put in the bank for her.
dont you need a social security number to start a bank account? i may be wrong, but that's what we're waiting for.
There are special funds that will mature when she is at college age. I, personally, would want that money a little more liquid in case there was an emergency.
There are some small banks now offering decent interest rates. We have a savings account in a small bank that is making better interest than a CD my uncle just put money in.
If you want to be able to change your mind as to how you invest choose a CD with a 5 year maturation or shorter and give yourself the freedom to do something different. Just make sure that your CD is going to have a higher return than a savings account (a lesson my uncle has now learned).
I recommend keeping it in something more short term (1-2 year CD) so you can change your mind or move it somewhere where it will make her more money.
PS - If we had any larger amount of money right now we would dump it into real estate. Between property value increases in the next 10-15 years and inflation that is going to be your best return!!! We bought a condo last summer for $89,000, put $10,000 in to it and it is now worth $130,000 and the rent pays for the mortgage / taxes with some left for routine maintenance. Not bad.
Buy land! They ain't makin' any more of it!
Your grandma gets an award. lol That's the most forward thinking I've ever heard of.
And you... you just get a jealous glare from me.
My parents actually have a protected farm, it can never be built on commercially. That was the best investment they ever made, we paid about 340k for the land and house, and my dad is pretty handy so he cleared the land, he and I built the barn and remodeled the house, and we invested another 15k in a tractor and did the fencing ourselves. The farm is now appraised at like 1.5 million. lol Go daddy go.
Yes, you do need a SSN to set up an acct in your childs name.
Sorry for the long reply, but I just wanted to add a note about 529 plans, in case anyone out there thinks that any of their children will ever need financial aid.
Say you save $30,000 in 529 plans to be divided between your 3 children for their college studies. So $10,000/child, but $10,000 isn?t going to sustain a 4 year program at that Ivy League, or anywhere else at this rate. Anyway, when your first born applies to Sallie Mae for tuition assistance, Sallie Mae will see that you have $30,000 in college funds and will allocate student aid dependant on that TOTAL number, whether you have plans for that other $20,000 or not. So unless you are planning on saving enough for all of your children to be student aid-free, 529?s can bite you in the butt.
As it was explained to me, saving for college via your retirement fund is the way to go. Lending agencies will look at your retirement funds as an estimate of your family?s wealth, but it is not as readily judged as your ability to afford college as a ?college fund? would be. Yes, you are charged for withdrawing money from your plan, but ultimately it can save you if student aid is ever a need. Further, it is expected that student aid will become more scarce and competitive, so it is a good idea to have a contingency plan. This is what was recommended to our family. Everyone's situation is different, so a financial advisor is definitely worth his/her weight in gold if you can find a good one!