Money for kids

[Alexander PhiAlipson]

Money given to kids throughout their lifetime belongs to them. I put the kids' money into UGMA/UTMA investment accounts. It paid for part of their college education. One kid will even have a nice chunk of change left over. Ethics aside and just being practical, they will need that money much more later than you need it now.

Interesting. How do you set those up?

Also, I'm not certain that any amount of financial investment is going to outweigh inflation, or the impact of interest on our upcoming minivan purchase, but I'll listen to any educated opinions.

@okee - we have enough supply for 3 more kids ATM.

I-bonds are inflation indexed and tax-free if used towards education.

[SuburbanFarmer]

Money given to kids throughout their lifetime belongs to them. I put the kids' money into UGMA/UTMA investment accounts. It paid for part of their college education. One kid will even have a nice chunk of change left over. Ethics aside and just being practical, they will need that money much more later than you need it now.

Interesting. How do you set those up?

Also, I'm not certain that any amount of financial investment is going to outweigh inflation, or the impact of interest on our upcoming minivan purchase, but I'll listen to any educated opinions.

@okee - we have enough supply for 3 more kids ATM.

I-bonds are inflation indexed and tax-free if used towards education.

Sounds like a way to give money that we could collect in grants.

[Alexander PhiAlipson]

Interesting. How do you set those up?

Also, I'm not certain that any amount of financial investment is going to outweigh inflation, or the impact of interest on our upcoming minivan purchase, but I'll listen to any educated opinions.

@okee - we have enough supply for 3 more kids ATM.

I-bonds are inflation indexed and tax-free if used towards education.

Sounds like a way to give money that we could collect in grants.

The interest is tax deferred(non-extant if used for educational purposes) and inflation indexed--I've just addressed your two issues above and you're talking about collecting grants?

[SuburbanFarmer]

I-bonds are inflation indexed and tax-free if used towards education.

Sounds like a way to give money that we could collect in grants.

The interest is tax deferred(non-extant if used for educational purposes) and inflation indexed--I've just addressed your two issues above and you're talking about collecting grants?

Well, you said it's earmarked for tuition, which has been inflating WAY faster than general inflation in the economy. And why bother spending/saving on tuition, when I can just sign the kid up for grants, etc. The more 'assets' they declare on a FAFSA, the less aid they get for tuition...

This is a perfect example of the perverse incentives in education.

[Okeefenokee]

Sounds like a way to give money that we could collect in grants.

The interest is tax deferred(non-extant if used for educational purposes) and inflation indexed--I've just addressed your two issues above and you're talking about collecting grants?

Well, you said it's earmarked for tuition, which has been inflating WAY faster than general inflation in the economy. And why bother spending/saving on tuition, when I can just sign the kid up for grants, etc. The more 'assets' they declare on a FAFSA, the less aid they get for tuition...

This is a perfect example of the perverse incentives in education.

Or you could get on board with the idea that, if you want it, you should work for it.



At this point, though, Marine Corps only. The Army's done.

[SuburbanFarmer]

There is exactly a zero chance that I'd support them going into the military, unless some pretty radical changes occur in the next two decades. Especially based on some weak interpretation of puritanical work ethic.

I'm all about work ethic and success, but also working smarter, not going the long way because "you should".

[Okeefenokee]

There is exactly a zero chance that I'd support them going into the military, unless some pretty radical changes occur in the next two decades. Especially based on some weak interpretation of puritanical work ethic.

I'm all about work ethic and success, but also working smarter, not going the long way because "you should".

Yeah, I knew you wouldn't go for it. If there's anything we've learned about you, it's that you ain't the working for it type.

[Ex-California]

Sounds like a way to give money that we could collect in grants.

The interest is tax deferred(non-extant if used for educational purposes) and inflation indexed--I've just addressed your two issues above and you're talking about collecting grants?

Well, you said it's earmarked for tuition, which has been inflating WAY faster than general inflation in the economy. And why bother spending/saving on tuition, when I can just sign the kid up for grants, etc. The more 'assets' they declare on a FAFSA, the less aid they get for tuition...

This is a perfect example of the perverse incentives in education.

Past a certain parental income point there are no grants, only loans. I'm screwed either way

[Montegriffo]

Open a Pokerstars account for them and hope that by the time they're 18 your puritanical gambling laws have been abolished.

[Alexander PhiAlipson]

Past a certain parental income point there are no grants, only loans. I'm screwed either way

Even so, it's easy to "hide" significant income from interest of "your" money as "their" money simply by setting up savings accounts in their names which will generate some return without subjecting them to tax, or at least less tax it would be subjected to under your name. Every person is entitled to a standard deduction as well as a personal exemption--if a parent claims their child's personal deduction on their return, the child cannot claim it; however, the child is still entitled to a limited standard deduction and this will offset some--or even all--of that child's interest income. Then, when that child's simple savings account gets a little too big for such pettiness, that child may want to buy itself deferred tax bonds whose interest won't show until they're redeemed. Believe it or not, some children play safe bets in stocks! I know, crazy, right?