Following up from my blog on Toddler Finance I wanted to take you through the next steps I have taken to invest for my kids.
You can read my Toddler Finance post here.
So right now I have two kids each with a bank account, a nice timeless moneybox and my eldest has a share portfolio, I really need to get onto opening one for my youngest.
The bank accounts each get $5 p/m from my personal spending as this is the amount the bank requires to get the “bonus interest”. My kids get given spare change from around the house and from their Grandmother and they pop it in their money boxes.
When the money boxes are full, we go to the bank and empty them into the coin machine and we talk about the money going into their bank account.
My eldest is nearly 4, when he was about 3, I gave him a little zip wallet and started giving him the option of putting some of his coins in his moneybox or in his wallet. So when he asks for something or we buy coffee I ask him if he brought his money with him.
I don’t always ask this or always make him pay but it is good to do every now and then to keep the conversation open.
When he asks "Why Mummy or Daddy have to go to work", we discuss the fact that we need to go to work to earn money to pay for things like our house and food and fun stuff.
Every family is going to have a different way of handling this, I think its great to have positive conversations around money.
So the money goes in the bank, but interest is crap right now and we are in it for the long term, with the $5 a month and the adhoc deposits my kids would only have a couple of hundred dollars each. They were both very lucky to be gifted some cash when they were born around $500 each ( I say around because the first born got more than the second born 😉).
This is where the investing comes in I don’t keep any more than $100 in my eldest’s account (theoretically in either of their bank accounts), I opened an investment account in my eldest’s name – I transferred all but $100 and started him off with a little share portfolio, just a couple of index type funds, I add $150 from our own savings to this each quarter and sweep the bank account on an adhoc basis for anything over $100.
He now has a little share portfolio currently valued at $2,400 – he is nearly 4, at this stage $55 a month is all we choose to put towards his savings and investments. I think it is plenty.
Now, I need to set the investment portfolio up for my youngest ASAP, it is the next thing to do on my personal finance list!
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