Young Children - "Gift" Money Savings

[msudawg8087]

This kind of thread may be part of the reason why the "Social Media" post is being discussed

Our first born turned 1 this past week (sniff sniff). She's gotten some money from family members that I would like to keep in a safe spot instead of letting it accumulate in the house somewhere with the chances of something happening to it. I'm sure we'll have more to add here and there over the next few years. Relatively simple question here but what are you guys with young children doing with their "gift" money until they get old enough to appreciate it and use it? I have been contemplating just adding another savings acct through our bank but am curious as to what you guys have done.

[Long Cut]

We have simple savings accounts for both of our boys. We use that to make larger deposits they receive from events such as Christmas where there may be a few hundred combined in the deposits. Smaller amounts such as tooth fairy, birthday etc they keep in a piggy bank and spend as they see fit.
Our oldest does have a small investment account that we periodically sweep his savings into. The sole purpose is saving for a vehicle. He's thirteen and we've had this since he was about 5. Just by doing that for a few years he has enough at this point to buy a " very used" truck so in 3 more years he should be ok.

I knew if it all stayed in a simple savings he would find a way to nickel and dime it on withdrawals over a period of time and then it would be up to me to make it up on a vehicle later on.
Probably not the best way but it works for us.

[teul2]

Our 6y/o has a savings account. Mom and Granddad (who opened it) are co-signers.

[missed mallards]

Savings and investment acct.

Keep x amount in savings. Everything over goes in investment acct for college.

Might start a 3rd for that car lol

[Smoke68]

I put it in their 529 college savings accounts. Usually $50 for each kid per event. $10 and less goes to piggy bank.

[the doctor]

Short of what I require them to put in the offering at church i let em spend every penny. We get some good lessons along the way but hoarding it up ain't gonna amount to anything (maybe monetary gifts in my family are smaller than yours) and I figure what they learn from using it, spending it, earning it, etc is better than a few hundred bucks on paper.

the doc

[Smoke68]

Short of what I require them to put in the offering at church i let em spend every penny. We get some good lessons along the way but hoarding it up ain't gonna amount to anything (maybe monetary gifts in my family are smaller than yours) and I figure what they learn from using it, spending it, earning it, etc is better than a few hundred bucks on paper.

the doc

Going to give this some thought......

[fishduck]

There are lots of ways to save money for a child. My goal was to interest my child in the process. So I bought a minimal amount of Disney stock via an online brokerage account. I know Disney is a liberal company but at the time my child was enamored with all things Disney. I have added to the account monthly and the stock has appreciated. His stock is now worth a significant amount and he has learned to keep up with the stock market.

It has been a great lesson on how small investments with continued monthly additions can grow. The same principal applies to mutual funds or can be done with any stock. The key IMHO is to include the child in the process as they mature.

[msudawg8087]

Well doc really threw a wrench in there and got the wheels a turning. Some great points in there about getting them involved with it. I opened up a regular savings account through our bank just to have somewhere safe to keep it for now but you guys have really got me thinking about what to do with it when she's actually old enough to appreciate it.

[SB]

Good topic. Interesting to read different philosophies. We pretty much save 99.9% of what the children get by putting it in savings account and piggy banks. I'm a saver by nature, wanting to have a rainy day fund for when the un-expected happens. Thus the reason I want the kids to be saving and hopefully learn the difference from a "want" and a "need". I know there needs to be a happy medium in there somewhere.

It is interesting to see the difference in the amount $ each of my two kids have received. I bet the oldest has at least twice if not three times the amount of the youngest. I don't think the driving force is the difference in age of the two but the "new" wearing off of grandchildren and nieces/nephews. The oldest was the second grand child and the youngest was the fourth grand child.