[Heather]

Hi! I’m pretty new here! I would appreciate your advice so much.

My question is…I have savings accounts for both of my kids; they are 15 and 13. We have been saving for them since they were little. We started off by putting thier birthday and Christmas money away when they were so little they didn’t know anything about it and recently started auto deposits for $50 every 2 weeks.  They have about $8000 each in a traditional savings accounts at a bank, I am the UTMA.

What would be a smart alternative to help grow the funds? Should we do investment accounts? HYS, IRA?

Just a little personal fyi, hubs and I are doing fine. No debt except our mortgage and we plan on paying it off within 10 years. We have a fully funded emergency fund, have healthy 401ks and hubs also has some stock though work. We plan on investing more when the house is free and clear. We are 43 and 40 years old.

[Ron]

Heads up. A kid who turns 18 can immediately demand that a UTMA account be turned over to them. If, by chance, they have become a dope head, that is the last thing you want to happen.

For that reason, I never told my kids about their accounts and I planned to get a private mailbox to receive the statements so they would never find out (the statements come in with their names on it.) But my kids grew up and never once checked the mail when it was dropped through the slot in our door so I never got a private mail box.

I never told them that I had the account but the week before they went off to university, I met them at an off campus hangout, told them mom and I had a “savings account” for them for college. I then asked them to write down all their planned expenses for clothes, gasoline, apt rent, utilities, tuition, entertainment, mad money, etc. After making sure they had not omitted anything, I authorized a monthly transfer to their checking account for the full amt. Upon graduation, I turned the remaining balance over to them. Both of them used it to make down payments on their first homes.

[Ken]

I know your question was about kids accounts but I wouldn’t be waiting 10 years until your house is paid off to start investing outside of your 401Ks.

That’s a lot of growth you’ll be missing in lieu of what is probably a low rate mortgage.

Don’t miss: I have a question about TSP funds

[Charlotte]

We put our kids’ money in custodial brokerage accounts (VTSAX) when they were around that age. They are now young adults and their money has significantly grown in value.

[Jenny]

HYS. Whenever you reach $1000, try buying etf of blue chips dividend paying stocks.

[Author]

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