Topic: Where to put money for newborn?

[87pickup]

Here is the deal. My wife and I just had our first child 3 months ago and we want to make it a priority to save $$ in her name. I have been trying to reasearch where is the best place to put 5k for her. Its if she wants to go to college or if she chooses not to than to get her life started when she is much older. I know interest rates suck right now for people right now but where is the best place to put it. We will be adding to it each year with our tax return but my daughter wont get it until she is atleast 18. Where should it go.

5 year cd is like 3.3% according to bankrate.com
Money market? Interest rates are variable and real low right now.
Treasury Bond? Which one EE or I and why?
529 college plan? But no guarantee on earnign interest and what if she chooses not to go to college?
Any other suggestions?

[blackdiamond]

I can't really help with the financial side, but why not put a college restriction on it since it's a great life experience even if she doesn't finish.  Maybe put a college restriction or delay her getting it for a couple years longer otherwise as encouragement.

In my family college was always just something that was expected.  I didn't even consider highschool grad anything special because it was just like any other year along the way.  When I have kids, I plan to "talk" like college is the only plan and then still support them if they make a different choice, it's not for everyone, but I want to stack the cards in that direction.

 

[Cheesemaker]

I go through Edward Jones here locally for all my financial stuff.  I see that there is one in your area.  Check them out http://www.edwardjones.com/en_US/fa/index.html&CIRN=516593  I really like my agent.  I never need an appt. to see him, and if I got any ?'s on anything, like my 401K from work, he helped me out on that too, at no cost.  

Google financial advisers for your area, and it will give you a list.  And call and see who has free consultations, and just spend a day checking a couple out, and go with the one you like.

Another thing, is who do you go through ins. with?  Alot of them do financial stuff, and if you have more than a couple portfolio's with them, you usually can get a discount on your insurance.

[87pickup [OP]]

I usually don't trust financial adviser's since 99% of the time i think they are going to sell you on whatever they are going to get the biggest fee, kickback or percentage. My wife used the same financial adviser's as the rest of her family and when her dad passed way she got some money and he sold a 17 year old on a annuity. I find out later he gets much larger commission from the annuity issuer than say a mutual fund issuer. Which she would have made more of a return on. Plus it being only 5,000 i cant imagine very many adviser's caring too much to deal with it.

[*FFC*]

I can't really help with the financial side, but why not put a college restriction on it since it's a great life experience even if she doesn't finish.  Maybe put a college restriction or delay her getting it for a couple years longer otherwise as encouragement.

In my family college was always just something that was expected.  I didn't even consider highschool grad anything special because it was just like any other year along the way.  When I have kids, I plan to "talk" like college is the only plan and then still support them if they make a different choice, it's not for everyone, but I want to stack the cards in that direction.

 

I have to agree - I'm talking with Sierra like she has no choice but to go to college. And NO putting it off either cuz we all know how that goes.

Sorry.. no financial help here

[kneedownnate]

Stocker and the mrs. did 2 things for my brother and I, and I can only imagine they did it for my little sister too;  Savings account and cd.  They'd put a little in savings each payday.  We didn't really have access to our savings accounts except to deposit our paychecks when we got old enough. 

The cd I never had access to until maybe several months or a year after graduating, at which time I foolishly rolled it over to my bank account and lived off it while between jobs. 

If I ever spawn any little devil nates I'll try and do pretty much the same, the only difference being I may set up a small 3rd account that they have access to on their own.  That way they'd have full responsibility for it, and if they wanted to buy frivelous things they'd have to learn the hard way that the money was gone when it was gone.  Then they can end up pulling weeds in neighbor's gardens for 3 hours for 25 cents like I did 

[germ]

There are several advantages and disadvantages to the options you've listed. I'm not a financial planner, but have been wrestling with the same things for my kids, and subsequently haven't done anything. My girls don't even know that school is "done" when they finish high school, they think that there is a minimum of 4 more years after that.

Because I couldn't decide what was the best, I have done nothing, and that is worse than making a minor mistake. All the options you describe are feasable, but you have to look at the tax advantages for you and the kids. I would sit down and talk to a financial planner or CPA about it, as they have all the inside info on how these work, and what would be the best for you. You are not obligated to do buisness with them, and can always just say that your going to think about it, and walk away.

The best thing that you can do is "something". Any intrest bearing account would be better than none. I would also put the carrott on the stick to encourage them to go to college. (like bd said), or make them wait another 5-6 years to have access to the money if they don't. Trust me, they will squander the money if there are not stipulations placed on it.

Erik

[87pickup [OP]]

There will definitely be stipulations as to what it can be used for like college, first house, starting a business etc. I'm not sacrificing so my children can by a escalade, clothes or any of that crap. And i will encourage my kids to go to school but it would piss me off to pay for college and they choose something useless like a religion or history degree. I have so many friends who make like 30-40k a year because they picked a degree that really doesn't get you anything. I'm all for doing what you love but sometimes what people love doesn't pay peanuts. I think i am going to ladder some Cd's that way i can get a higher yield as interest rates rise if that ever happens.