Helping Setting Kids up for long term Financial Stability

[Anonymous]

Here's what we are doing for our kids now:
- Saving to allow them to graduate debt free
- "Match" their earned income and contribute it to ROTH IRA. This is also a good way to teach them about investing.

Plan on helping with:
- Continuing to help with ROTH IRA contributions
- Help with downpayment on their first home
- 529s for grandkids
- inheritance down the road (and cash gifts along the way)

[Anonymous]

Older one had been authorized user on my credit card for awhile, but will get his own at 18. It can be done even without income, and I already know which cards.
Once I get him on his own, I will do it for the younger one entering middle school.
Older will also get his own Robinhood account to learn about investing.
I can pay out of pocket for college but they also have small 529.
I am leaving my own Roth accounts to my kids and grandkids if Roth is still a thing. I don't have the patience to wait til they start working; time is money.
Younger one inherited quite a large sum, so not really worried about them.
There are thing I won't do though and encourage them to stay away. I hope they do less with finances/keep them simple. It's easier to avoid mistakes than to fix them.
I'm planning to watch my grandkids for free if needed.
I will be all in their financial business, and I don't think they mind. They have no interest in it.

[Anonymous]

Anonymous wrote:Here’s what we did (similar to my parents)

Encourage starting Roth upon first job

Attend college debt free (kids are at in-state public)

Build credit by adding kids as authorized users to your accounts in late HS/freshman year of college

Teach about responsible credit. Only spend what you can pay the bill for today. Always pay in full by the due date.

We thought it would be a good idea to invest in affordable properties when our kids were young so we could gift them in adulthood but our finances didn’t allow it. I don’t know how they will afford to own a home with crazy prices and interest rates.

This is a good list and exactly what we are doing, except for the inheritable property.

We also contributed to their roth ira based on earnings from their summer job. Grandparents had been socking away money for them a little each year. It was only $2500K, but we taught them to invest it.

And yes, college debt free.

Also, make sure your own retirement is well funded so that you don't have to be a financial burden on your kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Here’s what we did (similar to my parents)

Encourage starting Roth upon first job

Attend college debt free (kids are at in-state public)

Build credit by adding kids as authorized users to your accounts in late HS/freshman year of college

Teach about responsible credit. Only spend what you can pay the bill for today. Always pay in full by the due date.

We thought it would be a good idea to invest in affordable properties when our kids were young so we could gift them in adulthood but our finances didn’t allow it. I don’t know how they will afford to own a home with crazy prices and interest rates.

This is a good list and exactly what we are doing, except for the inheritable property.

We also contributed to their roth ira based on earnings from their summer job. Grandparents had been socking away money for them a little each year. It was only $2500K, but we taught them to invest it.

And yes, college debt free.

Also, make sure your own retirement is well funded so that you don't have to be a financial burden on your kids.

lol.. i wish .. it was only 2500, not 2500k.

[Anonymous]

How can I open Roth IRA for DS? Do you contribute up to the earned income and let kid keep the income as his pocket money?

[Anonymous]

Anonymous wrote:How can I open Roth IRA for DS? Do you contribute up to the earned income and let kid keep the income as his pocket money?

DP: We did 1:1 matching so he got to keep 1/2 of earned income. I thought it was important for him to contribute to help build that habit/identity. He was 100% willing to put in enough to max it out.

You can just open one up like you do any account. Vanguard and Fidelity are both good places.

[Anonymous]

The best thing my parents ever did for me (and the next generation of my family) was to sit me down when I was 19 and force me to do the paperwork to open an IRA. At that time the limit was $2000 a year and no Roth option existed. They funded it for the first six years ($12k). I had formed a habit, so I kept doing it.

30 years later that single account is worth a half a million dollars.

Do something that creates a habit. They will be thanking you forever (as I do my parents).

[Anonymous]

I'd do the roth ira. But, the most important thing to do is pay for college and grad school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:How can I open Roth IRA for DS? Do you contribute up to the earned income and let kid keep the income as his pocket money?

DP: We did 1:1 matching so he got to keep 1/2 of earned income. I thought it was important for him to contribute to help build that habit/identity. He was 100% willing to put in enough to max it out.

You can just open one up like you do any account. Vanguard and Fidelity are both good places.

Thank you.

[Anonymous]

In addition to all of the above, get some land and plant fruit and nut trees on it. Think permaculture food forrest. When the kids grow up, they will get some land with fruit bearing trees.

[Anonymous]

Anonymous wrote:In addition to all of the above, get some land and plant fruit and nut trees on it. Think permaculture food forrest. When the kids grow up, they will get some land with fruit bearing trees.

Interesting idea! Where would one do this? Who will manage the farm? How much direct involvement is this? Any links to share?

[Anonymous]

Anonymous wrote:Here’s what we did (similar to my parents)

Encourage starting Roth upon first job
What are the rules for this? Where can I find them?? Any job (like a fast food place?) or just a "real job"?

Attend college debt free (kids are at in-state public)

Build credit by adding kids as authorized users to your accounts in late HS/freshman year of college. Do you mean like adding them to our credit card accounts?

Teach about responsible credit. Only spend what you can pay the bill for today. Always pay in full by the due date.

We thought it would be a good idea to invest in affordable properties when our kids were young so we could gift them in adulthood but our finances didn’t allow it. I don’t know how they will afford to own a home with crazy prices and interest rates.

[Anonymous]

Anonymous wrote:Does a kid’s Roth IRA count as a reportable student asset on the CSS profile so that the college will “take” almost all of it over four years? Or is it handled more like the parents’ retirement assets, which are often shielded by colleges?

Is that why above poster says to start at 22?

Anyone?

[Anonymous]

Anonymous wrote:

Anonymous wrote:In addition to all of the above, get some land and plant fruit and nut trees on it. Think permaculture food forrest. When the kids grow up, they will get some land with fruit bearing trees.

Interesting idea! Where would one do this? Who will manage the farm? How much direct involvement is this? Any links to share?

I have 30 acres and planted a bunch of fruit and nut trees. Virginia forestry has a program where you can order trees through them in the fall to be delivered in the spring. I planted 80 trees to get things moving. No reason to manage it yet, the trees are babies.

[Anonymous]

Anonymous wrote:We are 1st generation of having financial flexibility.
I was a Pell Grant Kid, my spouse went to college on a ROTC scholarship.
We have saved to fund the kids college and since they were young put $20 a month into a savings account so they will have some "pocket money" when they graduate. If they need cash for a deposit for an apartment - or whatever else they might need.
My oldest is now 18 - and I am trying to figure out if there are things we can do that will further support them.
Example - does it make sense to buy an aftermarket life insurance plan as the cost is cheap now (my SIL was diagnosed with MS in her late 20s and life insurance outside of work company is very expensive)
I navigated this all myself - and made some mistakes along the way and if there is a typical resource that people use now for what the latest thinking is, I would love to help my kids in going through it together to help them get started.