[TJ Tweedle]

Hello everyone! My wife and I are currently in BS2 and really working on getting our finances in order. I’ll start by saying we know very little about investing.

What is the best “hands off” 10-15 year investment option for kid’s savings accounts?

Currently, we have separate savings accounts for our three children but we are wanting to invest that money instead of letting it sit and lose value.

Before anyone says we should put this money towards BS2 instead of saving for a “college fund”, a good portion of their savings is gift money from birthdays/holidays; therefore it is not ours to spend.

It wouldn’t need to be accessed until they leave home for college or whatever direction they choose at that time.

Thanks for your advice!

[Kim]

If they aren’t going to access it either a 529 plan or a high yield savings account.

[Michele]

On steps one through 3 you dint invest for kids on 4-6 you’ll invest in either a 529 or ESA…

[Christine]

Look at a 529 account for college or school related expenses that you can invest in an S&P 500 index fund. Just let it sit until you get closer to needing it then decide if you should invest it elsewhere if the stock market is volatile at that time.

[Carol]

Baby Step your way to Financial Peace Dave Ramsey’s way:

1 – Do whatever it takes to get $1,000 saved up in a separate savings account as a starter emergency fund. Sell something, mow some lawns, clean houses, walk dogs, babysit, rake leaves…

2. Make a list of all your debts (except your home mortgage) in order from smallest amount owed to largest.

Temporarily stop all retirement investing, stop putting anything into savings, stop going to restaurants and out to the movies. If you have more than $1,000 in regular savings pull all the extra out to pay on debt. Be INTENSE with your money.

Pay minimum balances on all but the smallest debt. On that one throw everything extra you can at it to get it gone.

Here’s where the snowball starts. Take what you were paying on that first debt and add it to the second debt payment. It will be paid off much faster now. Continue like this, rolling old payments into the next debt on the list. Throw everything from side jobs, overtime, and raises onto the debt.

3- Keep that intensity once the debts are paid off just a little bit longer, so you can build up your starter emergency fund to a fully funded emergency fund, which is 3-6 months worth of expenses. Your monthly expenses are smaller now that your debts are paid off!

You will do baby steps 4-5-6 simultaneously. You won’t be as intense, so you can build some fun back into your financial life. Instead you will be INTENTIONAL.

4- Start putting 15% of your household income (gross) into retirement. If your household gross is $80k, that’s $1,000 per month. Choose Roth 401k or TSP with a match if you have it at work. If not, do regular 401k or TSP up to the match then go get a Roth IRA for the rest.

Invest across 4 types of mutual funds with long, strong historical growth performance: growth stocks, growth & income, aggressive growth, and international.

5- Invest for kids college, if you have kids and if you want to (529 in Mutual Funds or an ESA)

6- Everything extra goes towards paying off your house early. With no consumer debt and a fully funded emergency fund, you should be able to knock years off your mortgage.

7- Build wealth, so you can give and live generously.

[Liz]

Can open the 529 with gift money, actually people can just add money there for gifts. A savings account or money market account with Ally bank will be fine too, that is where if keep my son’s money that is not mine to spend.

[Randi]

How much is it? My kids have regular savings accounts that their gifted and earned money goes into. It’s not enough to make a difference in the market. 12yo has like $500. 17yo has $5k but is saving for his next car.

We started investing for them with our money in steps 4-6….not step 2. I’d wait.

[Barbara]

You put their money in high yield savings accounts. I think they can earn 4% right now. It’s better then putting it in the market and losing some of it. Also won’t they want to use it to buy their first car? It is their money anyways. You can’t put it into roths or anything because they don’t have incomes. You can put them in 529’s as well. Just remember you don’t put any of your own money in these accounts to keep with the baby steps. Do not contribute to them at all. Birthday and gift money from family is fine.

[Author]

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