How much $ are you making available to your kids?

[Deleted]

I was watching Suze Orman a few weeks ago and a kid called in on her "Can I afford it segment". He had something like $7k+ in his savings account. He said it was a combination of his money, gifts, and parents contributions.

His parents didn't want him to buy the item, but said Suze could decide. Suze said the money is his and he could afford it, so she approved. If parents don't like it, then they shouldn't give kids access to so much money.

What are your thoughts? DH and I were thinking $100 in general savings would be appropriate for blow money, the rest in the 529 - until the kid is old enough to start working, then they are old enough to manage their own savings.

[ijack]

damn. definitely not $7k.

[Deleted]

May 16, 2012 16:16:21 GMT -5 ijack said:

damn. definitely not $7k.

I think the little boy was 7 or 8. Can you imagine?! He also had a separate 529.

[Deleted]

The money I am saving for DD is for her bat mitzvah, wedding, and college. If she wants spending money, she'll earn it, either by an allowance or from getting a job when she is old enough.

[Deleted]

May 16, 2012 16:31:59 GMT -5 @iheartcosmos said:

The money I am saving for DD is for her bat mitzvah, wedding, and college. If she wants spending money, she'll earn it, either by an allowance or from getting a job when she is old enough.

This. V won't just have a big savings account that she has access to unless it is money she has earned or saved from birthdays, etc.

[jenn248]

Holy crap. My parents put away the the money that we received as gifts and used that towards college; out of the birthday money we got each year or for the holidays, we could only spend $20. If we wanted to buy other things, we had to pay for it out of our allowance (or money we got from working, once we were older). I can't imagine having access to $7K at that age. Hell, I probably didn't have a steady $7K in my personal accounts until I was in my mid-20s.

[cjeanette]

How old was the kid? If under 18 then how were the assets in his name?

[definitelyO]

DS gets money from relatives for his birthday every year. I let him use it right then. it's his and if he wants to spend it on legos, dinosaurs, games, etc.. he can. I don't make him save any of that money that he gets for birthdays. He is required to save a portion of his allowance but we haven't talked about what the savings acct is for or how long he should save it or if he ever gets to use it.

I think $7K is huge! but I wonder what he wants to spend it on....

[Deleted]

May 16, 2012 17:18:08 GMT -5 cjeanette said:

How old was the kid? If under 18 then how were the assets in his name?

He was 7 or 8 - under 10 for sure. The money was in his savings, which was probably Mom/Dad FBO minor, but Suze still considered it his money since it wasn't protected like a 529 is.

[locarb]

My kids have savings and a 529. The savings is to go towards big purchases like a car, house down pymt, wedding,etc...I may not even tell them about the savings. I'll just w/drawl the money as needed for said requested item. Then they'll think I gifted it to them-which I did just several yrs earlier as I saved up for them.

[slug*bug]

Wait, what? His parents said no, but said Suze Orman could decide, even though they said no?

Well, there's the first thing that wouldn't have happened at our house. The second is telling him that he had access to $7K, lol!

[cjeanette]

May 16, 2012 17:23:55 GMT -5 @jennylove said:

May 16, 2012 17:18:08 GMT -5 cjeanette said:

How old was the kid? If under 18 then how were the assets in his name?

He was 7 or 8 - under 10 for sure. The money was in his savings, which was probably Mom/Dad FBO minor, but Suze still considered it his money since it wasn't protected like a 529 is.

Actually is it protected if it has an adult name on it for his benefit. A UTMA account transfers to the child at age of majority but until that time the adult controls it. I can't legally even talk to a minor about their investment accounts.

[ilikedonuts]

When I was 14, I wanted a horse. My parents told me that I would need to spend all my money, birthday, Communion, Christmas money, that had been saved in an account if I wanted the horse. I choose the horse and they used it (along with some of theirs).

DD already has over $1k in her savings account from holidays and her baptism. I don't see why she even needs to know its there until she is buying a car or going away to college.

[EllieArroway]

We have been putting any gift money DS receives into an account for him but I have no idea when we will make it available to him. Maybe we'll let him use it to buy his first car?

DH & I are funding a 529 & separate savings for him that will be for college (and possibly a house DP depending on how much we sock away).

[Deleted]

Ditto everyone else. DS will not have a cash account he can access for any reason unless he earns the money himself. All birthday/gift money will be transferred into a 529 or some other investment account until he is 18, maybe 22. Heck, our will and trust won't give him anything until 25. Ha!

[Deleted]

$0.

[h]

My 4.5 year old has about $40 in his bank. He recently spent $20 on a Lego set. My 2 year old has probably $30 or so. Their money comes in the form of a few quarters here and there from a visiting grandparent, $5 in a b-day card, a dollar or a couple quarters in an Easter egg, etc. My oldest lives getting money.

They will be allowed to use money they earn, small gifts of money, and whatever pocket money we give them however they want. It will not amount to $7k any time soon. If a grandparent or someone like that is ever generous enough to gift them a significant sum, it will be saved for college.