Savings Accounts, 529s, Oh My!

I try to keep finance talk down to a minimum on this blog, just because everyone is at different financial points in their lives.

The other day, my wife brought up the possibility of opening Parker some sort of savings account right now, just so we can contribute a little bit of money to it each month so that’ll he have a good start of money later down the road. We were both fortunate to go to college with a least some financial stability thanks to either CDs or savings accounts/bonds setup in our names when we were much younger.

We’ve been looking into a couple options; a savings account, certificates of deposit, or perhaps another popular option, a 529 (an education savings plan designed to set aside money for future college costs). In any case, we’re just looking for a nice way to provide Parker with some financial stability when he’s ‘on his own’. Each obviously have their advantages and disadvantages, but by starting something now when Parker is so young, contributions don’t have to be as large and can be spread out over the next 18 years or so.

I think financial responsibility is an important thing to instill in children, because when you go to college, it hits reality. When you’re responsible for deciding what to purchase, paying bills, rent, etc. I don’t necessarily advocate that children (well, teenagers) should HAVE to get a job, but I’m going to encourage Parker to get a job when he’s old enough because I think it teaches a lot about financial responsibility and money management. Plus money you earn on your own in a way is more valuable.

In any case, this is a long way down the road, but obviously the earlier we get started on this, the easier it becomes and the more we can provide.

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2 responses to “Savings Accounts, 529s, Oh My!

  1. Financial Responsibility IS a very important thing. I would add that one needs to instill that at a very early age, even as young as 5 years. I wrote children’s books in a series “Finance for Kidz” for precisely that reason. Financial principles can be explained through stories that children can relate to. You can check these books out at finance4kidz dot com.

    Prakash Dheeriya, PhD
    Father, Author & Professor of Finance
    Finance for Kidz series
    finance4kidz dot com

  2. There is another……choice. A no-load mutual fund, $100 minimum investment, a financial literacy component, a free college tuition rewards program and a 5-Star rating. Goes beyond the tax benefits of any 529 or bank saving account.

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