It’s natural for parents to want to shield their children from some of this stress by investing money towards their future. However, the best strategies for investing in your child’s future might seem unclear.
Before You Start Investing for Your Child’s Future
Before pursuing investing for kids, you should have emergency savings set aside and you have confidence in your retirement funds.
If your teenager has a job like a freelance writer, lifeguard, fast food worker or something else, you can open a custodial IRA in their name and invest in assets that appreciate in value or other income-generating assets.
You can also save for your child’s future expenses without a specific plan for how those funds should be used. Uniform Transfer to Minors Act (UTMA) accounts and Uniform Gifts to Minors Act (UGMA) accounts are two beneficial types of custodial accounts that let teenagers invest.
Acorns Early acts as one type of UGMA account and you can open one any time after the birth of your child. This account offers more flexibility for how to spend money than 529 plans and most other options.
UNest allows you to invest in your child’s future goals, including their education but also other important milestones like buying a house or car, paying for a wedding, or even for securing their financial future. The company boasts five investment options, each suited to various financial needs you may have.