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Trying To Save For A Childs Future

December 6th, 2006 at 01:16 am

I have always wanted to give my daughter a good head start. Financially, hubby and I started getting stock for her when she was about 4.

When she was 16 we signed her up with her own checking and savings account as well as her first CC. The CC we signed her up for was set at a very low max(250). We taught her how to use credit responsibly. She had a job working at the local supermarket, making a decent salary for a 16 yo. After she had that CC for a while we had the max increase to 1000.00 and we also encourage her to get more CC cards. DD was able to get an Amex,Discover card and a Visa. All with pretty good credit limits.

I have also kept an eye on her FICO which is 785 and that is b/c she doesn't have longevity with credit. It should go higher when she is about 25. Right now, I think it is still pretty good for someone of her age(21).

Last January I had read a few articles in the financial journals stating that one of the best moves for a young person financially would be to get started with a Roth IRA at a very early age. I did some research and I found that T.Rowe Price would let you open an account with as little as 50.00 so long as you made it in automatic payments from a checking account. T. Rowe Price also has a very low expense ratio which also attracted me. The other option I had in mind was Vanguard but they wouldn't let you open with just 50.00. We put in 75.00 and she puts in 75.00 to total 150.00 every month. I have also set her up with an Emmigrant savings account 50.00 per month gets put in there and that hopefully will serve as her future emergency fund. She has another savings account that she saves her money in to buy herself things. I think I have covered pretty much everything that is in the works for her.Oh, one more thing, she has an insurance policy(SBLI) I got this for her when she was 2 or 3. I know this is the wrong kind of insurance, whole not term but she has had it for so long I am not going to get rid of it now. I hope this gives her a good start when she wonders out on her own.

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