Loanio

Are you investing for your child?

Having children is not cheap by any means these days, especially when you consider the long term basis. The older your children get, the more they will end up costing you, especially when you consider education costs which are rising with every passing year. It may seem easy to put saving and investing for your child’s future off, since higher education is so far away when your kids are young, but it is absolutely vital that you start saving now if you want to make sure that your children have everything they need in life, even far into the future. Surveys are luckily beginning to suggest that as a whole, we are beginning to realize how important it is to save ahead of time for the future. Saving and investing for the future of your children is a necessary parental responsibility. Here is some basic information on how to save for your children, and a look at some of the available financial products that may help you with this process.

* Bank Accounts –

The first step that many parents take toward saving for the futures of their children is to open a savings account on the behalf of each child, making small cash deposits over time. Most banks have accounts that are designed specifically to tailor to children, often offering a higher interest rate and other incentives like savings club memberships for kids, piggy banks, badges and other toys. Even if you are not sure how often you will be able to make deposits, it is still a good idea to set a deposit account up as soon as possible so that it is there any time you want to put money aside. It is surprising how quickly this money can add up if you are diligent about depositing it.

* Tax –

Children are subject to income taxes on their bank accounts just as adults are. They do receive a tax allowance, and they will not be taxed on the interest as long as their total income does not exceed this allowance over the span of the financial year. This only applies to savings accrued by relative or friend gifts so the money that you deposit will be naturally subject to the tax amount.

* Trust Funds for Children –

Trust funds are a unique way for parents to invest money into their children’s futures, creating a fund that belongs to the child but only after they reach a certain age. Most trusts last until the child turns 18, meaning as soon as they reach adulthood they will have access to a savings fund of money that will help them with purchases like buying a car, going to school and so on. Money can be invested into these funds every year, and you can choose between savings funds, shares funds and stakeholder funds depending on your needs and the needs of your family.

There are lots of other possibilities when it comes to savings methods for your children, including bonds, savings accounts, trust funds, investments, shares and stocks. Some are not designed specifically for children, but all can benefit the child as long as you are willing to manage them on the behalf of your children until they are old enough to handle the management their own selves.

Photo Credits: 1

Originally posted 2008-12-18 05:17:37. Republished by Blog Post Promoter

• Teach Teens to Save Money /caption] One of the biggest reasons why having a teenage child can be difficult is because teenagers tend to spend money easily and freely without any real regard for what goes into earning that money in the first place. Teenagers tend to spend a great deal of money on clothes,......
• To Borrow or Not to Borrow against a 401K Question - Because of the credit crunch, is this a good time to consider borrowing against a 401(k) savings as a means of paying off other loans? My current 401(k) planning investment return is 5 percent, and the interest I will be paying on it is 9 percent. [/caption] Answer......
• Do You Ask Yourself, How Do I Plan for Retirement? /caption] Don't you think that every working man and working woman is entitled to enjoying a secure and comfortable retirement once they are no longer working? Due to the fact that we have taken so many strides in health care and in medicine, many people are living longer and healthier......
• Setting Goals for Good Personal Finance /caption] Setting goals is an important part of your personal finance plan. Goals can be divided into four unique categories that are relatively general in nature. These categories are short term goals, intermediate term goals, long term goals and life goals. Short Term Personal Finance Goals - These short term......
• Save Money by Managing Your Money /caption] There are plenty of ways for you to save money simply by managing it. It does not necessarily mean that you have to be frugal, but rather you simply have to be wise in the decisions that you make. Too many people these days are finding that they were......

• How we paid down our debt and saved money at the same time..it can be done! I have been reading a lot of posts at different financial websites lately about the trouble people are having paying off their credit card debt while trying to save a little extra money for themselves. First of all, anyone doing their best to pay off credit card should be commended,......
• How To Give Your Kids An Allowance I accidentally found myself watching one of those wife swapping shows (which honestly sounds like something that shouldn't be on TV) the other day and the parents were debating allowances. Since then a few blogs have starting talking about allowances and what's right and what's wrong with it. Like most......
• Should You Pay for Your Child's College Education? Paying for college for yourself or for a child can drop you into debt faster than many other things. Aside from huge disasters like medical emergencies or a home fire, more people get into higher debt by paying for college than any other reason. The best advice for long term......
• How To Use Variable Annuities the Right Way First things first:  variable annuities are poor investments for most people (with a few important exceptions I'll get to in a moment).  They are usually expensive, complicated, illiquid, and hard to understand for all but the most sophisticated of investors.  Unfortunately, the target of a variable annuity sales pitch is usually a......
• Teach your teen the basics of money management Photo Credit: stock.xchng This article is part of the Money Matters for All Ages group writing project being conducted by the M-Network and other blogging friends. See the bottom of this article for the full list of participants and links to their articles. Please check back daily as I......