Baby Parenting

529 college savings plans are accounts set aside by parents, grandparents or guardians to pay for the future tuition of young children. Earnings grow tax-deferred, and the minimum contributions are kept low to allow various families to be able to afford these plans (i.e. $50 a month). Further, funds are not subject to taxation when they are withdrawn, as long as they are used for approved educational purposes. (For more information, check out MainStreet’s 529 plan explainer.)

But 529 plans do have a contribution limit. So if you’re looking to give more to your child’s education (or you want to shop around before settling on a savings plan), here are some other options. Read the rest of this entry »

Whether you want to save up for a cool video game or your college education, you’re going to need a financial game plan. Check out some of these ideas that’ll get you started!
Get a Savings Account

If you’re serious about saving your dosh, keeping it in a shoe box isn’t going to cut it. It’s time to start a savings account. This account should be separate from your checking or “spending money” account. Look for a bank that offers a higher interest rate (that’s the money the bank pays you to keep your cash with them) and also make sure they don’t charge you a lot of service fees. In fact, a lot of banks don’t charge kids any service fees at all, so shop around to find the right bank for you. Read the rest of this entry »

Credit Unions

Check your local credit union for help with teaching your children about saving money. Our credit union has a “Scottie Dollar Club.” There is no minimum balance, no fees, and each time our children deposit money they receive a Scottie dollar. Then a few times a year they open a Scottie store. It has small items that children can buy with their Scottie dollars. The child also receives a register book, and the teller records the child’s deposit and brings the balance up to date. Quarterly, account holders receive a statement in the mail telling the balance and activity, if there has been any. Both of our children have an account, and they cannot wait to put money in it. Add to this some discussion of the importance of saving and using money wisely, and as they get older, the importance and benefit of interest. Your kids will have a good foundation and have a little fun getting it. Read the rest of this entry »

Most parents opt for a stakeholder account, because these products have been specifically designed for the CFT savings scheme and as mentioned above, they are the Government’s favoured option. It is worth noting though, that not all stakeholder accounts are the same and performance does vary – it is therefore worth doing a bit of research before deciding which scheme to go for.

However, while the Government may recommend stakeholder products, this does not necessarily mean that you are wrong to opt for a non-stakeholder or cash account.

If you are a cautious investor and are not happy to take the risk of investing money for your child’s future in the stock markets, then you may prefer a cash account. Read the rest of this entry »

There are three main types of CTF: stakeholder accounts, cash savings accounts and non-stakeholder accounts.

Stakeholder CTFs are the Government’s preferred option. It believes that equities will provide better returns than cash over the longer term so stakeholder schemes invest in equities in the early years and are then gradually moved into less risky assets such as cash and bonds as the child nears 18 – this is known as ‘lifestyling’. Annual management charges on stakeholder schemes are capped at 1.5%

Most stakeholder schemes invest in index trackers that are linked to the FTSE 100 or FTSE All Share (although a few invest in actively managed funds). Read the rest of this entry »

All children born on or after September 1 2002, are eligible for a child trust fund (CTF). This is a Government-backed scheme aimed at encouraging parents to save for their son or daughter’s future.

New-born children receive a voucher from the Government worth at least £250 – those from families on lower incomes receive £500. They then receive another £250 voucher at the age of 7 and the Government is currently consulting on whether to give a further voucher when the child is in secondary school. Read the rest of this entry »

Most banks and building societies offer savings accounts aimed specifically at children. Many allow easy access and unlimited withdrawals, although some may require notice, say 30 or 60 days before a withdrawal is made. Both notice and easy access products are ideal if the main purpose of the account, is to encourage a child to get into the habit of saving money they receive for birthdays and Christmas. Read the rest of this entry »

Teaching children how to look after their money at an early age will prove invaluable to them in later life – not to mention provide them with a nest egg for their first home or car.

First, though, you need to decide between the various options open to parents and other adults saving for children. Are you looking for an account into which they can deposit Christmas and birthday money and access from time to time, or you do want a longer-term savings vehicle to invest for their future? Read the rest of this entry »

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