- Pregnancy
- Baby & Toddler
- Parents
- Getting Pregnant
- Baby Names
- Product Reviews
-
Registry
- Community
-
More
Want a personalized experience?
Download the free app
Stay at Home Moms
EnglishMajor03
member
Okay you finance people...and anyone else who has an opinion
EnglishMajor03
member
Whenever the girls get cash we purchase savings bonds for them. We have a little stash going now so we divvied out the money and they are almost to $1000 each. I'm wondering if we should be doing something different with the money rather than bonds? I hesitate to open a college fund because DH and I don't want to contribute monthly or anything like that...but I'm not sure if you *need* to contribute??
Anyway, thoughts?
This discussion has been closed.
Re: Okay you finance people...and anyone else who has an opinion
Savings bonds are pretty good. The only problem with college funds that you would need to check on is what they are able to use the funds on. Some college funds only allow it to be used on tuition and books, not dorm expenses, food, things along that nature.
I do think it is really awesome that you have done that, and it is a great way to teach your children responsibility and management!
Yeah. Um, I wish I had almost $1000 as a toddler!
In my financial opinion STOP buying bonds- they are a HORRIBLE investment.
Look into a high yield mutal fund.
EE savings bonds are horrible investments. Right now any EE bond you buy will have a fixed interest rate of 1.1%. You could make that much money with an ING Direct savings account and you won't have your money tied up for years. I cringe anytime someone gives DD a savings bond.
I put DD's money into a 2025 target retirement mutual fund at Vanguard. It's invested in my name and it's in a regular taxable account (not a retirement or 529 account) so I can do anything with it at any time. My intention is to use the money toward college expenses but if something else comes up, I have flexibility.
$1000 is too low for a the minimum investment for many mutual funds but there are some that are available at that level. At Vanguard all the target retirement funds and the STAR fund can be purchased with a $1000 minimum.
$1K may or may not be enough to initially purchase shares of a mutual fund depending on which one you choose. I'd do some research on Vanguard and Fidelity's funds (or whomever you prefer) to find a fund that's both affordable and right for you.
I agree with this.
We have a number of investments for our kids. We choose to have some money that the kids have "access" to. DD has a lot because she modeled as a baby and DS has collected a lot from birthdays, since he is the second and doesn't need much. We looked at buying stocks, ect, but ultimately decided that having a savings account with a decent amount of money is not a bad thing for them growing up. $1,000 is hardly enough for them to run away on at 8, but it is enough if they decide they really want the next Wii or to go on the high school trip to where ever.
It is never a bad idea to teach kids about investing, but I do not think their is anything wrong with a child having a bit of savings that they can see and understand as they get a little older. This is especially true if you want them to buy their first car or something like that. It is easier for them to see their savings add up from birthdays or jobs if they already had a bit to start with. Sometimes, I think it is hard for younger kids to view stocks and mutual funds as the same.
Nothing wrong with a good mutual fund, but for most, you will need more than $1000 to open them.
This is what we do as well.
Yeah I'm not sure what I'm looking for, I guess. I didn't realize how much $ they had until we were looking to see how much Rowan had, mostly because I thought she had very little. It definitely won't be something I want them to be able to touch until they're older...as far as "rainy day" stuff we purchase those for them or they have gift cards. They can ask for high priced items for Christmas/Hanukah.
Is type of conversation something I can talk to an FC about at my bank?
I agree with a well balanced mutual fund for a good mix of risk and return. Vanguard's fees are really low and they have a huge variety to choose from. The target retirement bonds, as someone else stated, aren't a bad idea, but there are other options as well.
At this point in time, Im not really a huge fan of government bonds of any kind, and EE bonds have awful returns.