Babies: 0 - 3 Months
cs1007
member
Best savings plan for baby?
cs1007
member
DH and I are looking to set up an account for baby...Wondering what other people are doing and if you had any recommendations...THANKS!
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Re: Best savings plan for baby?
We have a custodial savings account. There's no minimum balance, which is nice because we can transfer into it as we see fit. When we have a large enough chunk, we'll probably take it out and put it into a CD and start all over so he can have the savings account register and see his money grow without knowing he has several thousand.
I wouldn't recommend an education savings plan (529 plan). The taxing on those is funky, and when your child goes to college they will qualify for less in financial aid if they have one of those.
Exactly, because a 529 is supposed to be used for college. In theory, you don't need as much financial aid when you have money set aside for college - can't have your cake and eat it too!
Hmm. We started a 529 for DS. I guess it makes sense that it would affect fin. aid eligibility.
529s are an excellent option for a lot of families, especially those who plan to use them for college (which is what they're for).
I think every savings plan has its pros and cons, and what's right for one family isn't necessarily right for another - that's why there are so many different kinds.
(I work in university financial aid so I've seen all kinds of situations of people trying to "hide" their college fund from the feds. Doesn't work.)
Right. That is true. But so many things, like parents' income, are taken into account when you go to college that may or may not actually be used for college. If your parents aren't going to help you pay for college, it doesn't matter. They still take their income into account. I just think it's best not to have one because it could end up hurting them more than helping.
This.