My child has come into some money from a competition she won ($1,800).
Rather than let her go crazy at the toy store, what is the best way to handle this money? (We have discussed it with her and agreed that $50 is a reasonable amount of her win to spend and she will save the rest). A regular child's bank account has a very low return and I am concerned that by the time she is mature enough to spend the money wisely, it will be practically worthless due to inflation etc.
Little miss has said she would like to use it to buy a house, however her concept of the value of money is obviously not the best.
Investing small sum for a Child
loulou1 on 07/04/2017 - 13:45
Comments
as she is under 18 she is not allowed to gamble.
Does bankwest still have a higher interest savings account for kids?
You haven't given her age so not sure how much she would understand, but can't hurt to put some $ in savings (to teach reward of saving $, compound interest, even if not much, might be seen as a lot to her) and see if you can get a managed fund open (teach investing, delayed gratification, etc)sorry, she is only 7.
wow that looks quite good
Not when it used to be 10%…but I guess it is still better than the rest. Just be mindful of the annual "sweep" and all the other fine print.
http://www.productreview.com.au/p/bankwest-kids-bonus-saver.…
Bankwest has a kids savings account that rewards regular saving. Otherwise, whoever has the highest bonus rate today (Canstar keeps a table). It will at least do better than inflation.
And never says never. If you go guarantor she won't even need LMI:
http://www.realestate.com.au/property-residential+land-nsw-g…Never too young to be a property speculator in Australia!
probably not the worst idea ever. How will she meet the repayments and council rates though? I will be upping her chores around the place.
Can under 18s buy property?
Invest in Lego. I'm not even joking.
Lego and MTG cards. Can't go wrong.
but convincing little miss to leave the Lego in the packets? I envisage being woken up in the middle of the night to loud squealing as she excitedly opens things she shouldn't
As mentioned above- it's a good lesson teaching her the power of compound interest. So a savings account she can see grow is fantastic.
The problem with most of the higher interest rate investments is that many have either restrictions or lower returns on investments as low as a few thousand. Perhaps something like Acorns could be good with a 500/1250 split bank/acorns? Would need to look in to the fees- I personally don't use it so I'm not 100% sure.
When I was that young, I remember my parents used to give me $10(?) month(?) to put into a high interest kids account. I always looked forward to this and it's helped me learn about saving money and how quickly money can grow in the bank.
She does have a bank account through school where she deposits weekly depending on chores she has done. She knows exactly how much is in there.
Drip feed into First Option credit union kids account (5.15%pa if conditions met), or purchase a growth/insurance bond (tax free if you can leave it for 10 years).
catch is with bankwest is can only deposit $250 per month into the higher interest acc and after a year all the savings goes back to the low interest account then your back to only depositing the $250 again.
Put it all on black.