Birthday money - 529 or savings?

Dochas · August 2012

Hello! Just wondering what other people would do. My son received a little bit of money for his birthday and I'm not sure if I should put it in his savings or college account. It isn't a lot of money $150. I just wonder if it would be better in a savings account that he would have access to at a younger age or put it away for education. Obviously this is not an earth shattering decision LOL. I liked these kinds of discussions though and am always interested in what others do and think.

Just some more info on our stance/position. We are not going to be able to pay for college. We opened a 529 mainly at my sister/bil's prompting because they would like to put money in one for him. I have no idea how much they will put in, certainly not huge sums of money. But she's his godmother and they are comfortable, financially speaking. We will not be contributing much to that but seeing my nephews now in college I realize that every little bit helps - literally. A couple of thousand dollars can pay living expenses. But it might also be nice to have some money in savings for a car or whatever when he's a teenager.

I would really like it if we could refrain from arguing whether or not parents have an obligation to pay for college.

Que*Syrah · August 2012

If you're not planning on contributing to his college savings, are you going to contribute to any regular savings? I ask because you mentioned the car thing. If you're not planning on making any further contributions to savings for your LO, then I would either spend it if there is anything he currently needs, or just stick it in the 529. I wouldn't put it in a separate savings account if you're not going to add to it.

notkateanymore · August 2012

If you don't think you'll be able to help with college I would save it now.

brooketini · August 2012

We put any money they receive as a gift into their own savings account. However, we also contribute monthly to their college savings funds. The way I see it, the money they receive as a gift is "theirs" to be saved for a larger purchase down the road (car, laptop, etc.). In my eyes, it is my responsibility to save for their college (not that I'm opposed to them taking out student loans- that's how I paid for my college).

Dochas · August 2012

Que_Syrah:
If you're not planning on contributing to his college savings, are you going to contribute to any regular savings? I ask because you mentioned the car thing. If you're not planning on making any further contributions to savings for your LO, then I would either spend it if there is anything he currently needs, or just stick it in the 529. I wouldn't put it in a separate savings account if you're not going to add to it.

Now that the 529 is open I would not contribute to his savings account. Any money I would put away for him would go into that. The only money that would go into regular savings would be gifts. When he's older and knows he's getting money I think we'll let him spend some, donate some, and save some. He's got about $1000 in his account now. Not sure if we'll do allowance in the future but would follow the same spend save donate philosophy with that. When he's a teenager it is very likely that he will be a kid with an after school job. I always wanted to work, so did everyone on my family. Nieces and nephews have also gone that route (voluntarily). We just all have liked having our own income. LOL. I guess I don't know what's a good balance to shoot for in his savings account. Since I do want him to be involved in "managing money" and deciding what to do with it as he grows up I don't know how much we should leave in savings. I kind of have that thousand dollar round number in mind, but even small amounts might do more in a 529.

Dochas · August 2012

There really isn't anything he needs right now. But that's a good point. We might want to keep money in his savings account in case there is something he really wants/needs later that's out of budget. It might be better to let it sit and then make small deposits to 529. Maybe the 1000 dollar balance is a good idea and the put anything more than that to 529.

lexusolsen · August 2012

We have not started a savings account for LO yet but our plan is to use a regular savings account. We would like them to be able to use the money for college, a down payment on a house, or a wedding. It won't be an enormous amount of money as we are still paying off our own student loans but I want them to be able to use the money even if they decide not to go to college.

12bailey18 · August 2012

We have a savings account for each child that we put birthday or any holiday money they receive into. We plan on getting out of debt and planning for retirement before we worry about paying for their college, so the money they receive right now just goes straight into their savings account.

jenniann87 · August 2012

We put any money that DS receives for his birthday, Christmas, etc into his savings account. My FI also has money taken out of his checks weekly and deposited into there as well.

Want a personalized experience?

Birthday money - 529 or savings?

Re: Birthday money - 529 or savings?

Choose Another Board

Search Boards