Investing In Stocks Or DRIP Accounts For Kids

Are you thinking of investing in your children’s future? Well, there are ways that you can do it securely and not risk losing your funds. Just like everything else in life, your best bet lies in making sure that you have done your research. You need to look at the past performance record of any investment you wish to undertake. The performance record should be in a span of not less than 16 years. In this article we are going to look at some of the investments that you should consider.

Stocks

If you do your research well, stocks can offer the kind of investment that is inflation proof compared to other forms of investment. Stock investing is usually only considered high risk when you buy on a short term basis. For example, if you bought stocks at around 2006, then decided to sell at around 2008, most likely you lost money. On the other hand those who bought their stocks at around 2006 and are selling them now, they are definitely getting high returns. You have to remember what a stock means to you. You are buying into the ownership of the company. You have to look at it as your own business that could be affected by several factors.

It could be that it is the market that is sluggish. As soon as the market improves, you can be sure to make money. You should also buy into companies that are easy to manage, ones that you can easily tell whether they are doing well or not. That is the only way you can be sure that your research of the past performance of the company is likely to continue. They say past performance is not a guarantee of future performance. However, I consider it a good place to start when looking for red flags. Overall, by the time your children are almost ready to go to college, you should be ready to sell your stocks.

If you consult an investment advisor they may offer solid advice on which stocks to be looking at for long term growth, when your kids are older. But if you like the idea of picking them yourself then a service like StockMonitor.com would be useful. You can track your investment portfolio and get a whole suite of tools including their technical analysis stock screener which can show you companies that are in strong trends, or have sold off and may be displaying good value for money.

The other factor to keep in mind is that when it comes to investing in stocks, you have to diversify. You need to spread out your investment to multiple companies that are performing very well. There is a great likelihood that some will outperform others. You may even invest in companies that target the same market, but they appear equally strong. Over a period of ten years, it is possible for one of them to dominate the market. If you invested into both of them, you can rest assured your investment decision will pay off.

DRIPs or Dividend Re-Investment Plans Accounts

Some companies also offer DRIPs. This is where after you buy stocks, the dividends are reinvested back and your shareholding increases. They are great when you want to save for your children’s future but also teach them how to invest in stocks. When they keep seeing their shareholding increasing each year, they will appreciate the importance of investing in stocks.

Bonds

Bonds are a form of temporary shareholding. You simply buy them for a specified period of time. Unlike regular stocks where you can hold onto them for as long as you want, bonds are a form of IOU. You are lending money to a government or an institution so you can get it back with interest. They offer a lower risk but at lower interest rates. They are less favored compared to stocks.

A 529 college savings account

This is another great way to diversify the investment in your children’s future. It involves paying their college tuition using the current rates. Many States allow you to do that and the tuition fees is transferable to other colleges in other States. It is a great way for you to secure your children’s education. Many people say they have never heard of this option but is is a great way save what you have in your child’s future education.

Mutual Funds

This is a form of stock ownership that allows you to let a mutual fund organization invest on your behalf. It is worth noting they charge you extra for that service and you need to factor that in your investment. They basically invest in several companies that they consider to be performing well. They allow you to own a portion of those companies through them. If you do not have time doing your own investment research, they offer a better investment option.

Those are among the top best options that give you great control both in investment and securing your child’s education and financial future. We hope that you have learned something and you will build on that to make informed investment decisions for your children’s future.

from Kids Money Management http://www.kidsmoneymanagement.com/investing-in-stocks-or-drip-accounts-for-kids/

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Teaching Children About Money Early

Teaching children about money and how to save it is something that all parents should do. This is something that schools often ignore, and sadly, many children grow up without understanding the importance of budgeting and saving money for the future. As parents, teaching these lessons to children is like giving them a gift that they will use for the rest of their lives. Continue reading to learn how you can teach your child about money and the importance of saving.

Don’t give children everything they want

As parents, it’s easy to fall into the trap of wanting to make your children happy. This may involve rushing out to buy the latest toys, or electronics. Doing so is a sure fire way to set a child up for unrealistic expectations and frustration later in life. Teach children that life isn’t filled with instant gratification. In order to get the things they want, they must work and save up for them.

Give children an allowance

Children can’t really learn about money, if they never have any. Give children a weekly allowance. Let kids use their allowance for items such as toys, new cell phones, and extra clothing, outside of the regular clothing items that parents buy. Teach children how to work to make extra money if they need more than what they have. Let them do yard work for neighbors, or pick up extra chores around the house. Just don’t hand them money, let them earn it and save. This is a wonderful lesson that they’ll need for their future.

Have kids open up a child’s bank account

educationMost banks have special accounts available for those who are under 18 years of age. These accounts don’t carry the same fees as accounts geared toward adults do. Have children save a portion of their allowance each week. Take them to the bank to make a deposit. This teaches them to save for the future instead of spending everything they have as soon as it’s in their hands. This lesson can save the a lot of stress when they are grown and living out on their own.

While children may fuss about having to save, and budget their money for the things they want, when they are grown, they will thank you for teaching them how to handle money. Far too many people never learn how to do this. You’ll be preparing your children for the future, a future that will hopefully be a lot easier because they learned how to care for their money.

from Kids Money Management http://www.kidsmoneymanagement.com/teaching-children-about-money-early/

Getting The Correct Financial Support for Kids

Child support is a term given to the funds and other supportive elements that are provided to a child so that they can be raised properly. Usually it is used in conjunction with divorce or separation of the childs parents. For example, if the childs parents are not living in the same home, there are legal ramifications and the child should still be supported by both parents. In many cases, the parent that is no longer living with the child will need to provide funds for the child to the other parent.

In many cases, children are in need of more than monetary support, though. They are quite often experiencing the fact that their other parent has left them, even if it is only temporary. The fact that that parent is not in the same home with them any longer is quite traumatic and can be very life changing to them. In this case, it is essential for their well being that that parent makes a good deal of effort to provide the support the child needs.

Support in this form can come in many things. First of all, the parent that is living with them should provide the child with the ability to see their other parent. Now, when there are concerns about the safety of the child, this is a completely different case. Yet, in most cases, this is not the case. The parent then should provide them with ample ways to communicate and welcome their other parent into their life.

This many include conversations over the phone and in email. One great way for this to work is through the internet process of web cams. They can see and hear their parent which makes them really feel as if they are there for them. It is also important that the parent living with the child to never say negative things about the other in front of the child, no matter how harsh the settlement is.

Child support should also come in the forms of counseling. Many parents notice changes in their child when there is divorce or separation. Many blame themselves and many more will worry about this endlessly. It is essential for both parents to play a role in supporting their child in a positive way throughout the entire process. If they seem to need to an outlet and it is about the situation, it may not be wise to talk to the parents. The child may want someone else to help them. In this case, seeking the help of a professional can really make a difference.

from Kids Money Management http://www.kidsmoneymanagement.com/getting-the-correct-financial-support-for-kids/

Maintaining Credit: A Guide For Students

moneymanagementObtaining and maintaining credit is an essential part of modern life. If you are one of the many students who will apply for student loans, you need to be aware that borrowing wisely and managing your financial obligations are your responsibility. So it may be helpful to obtain a copy of your credit bureau report. It’s easy and may be offered for free. While federal student loans are generally available to students regardless of credit, private loan interest rates and fees will depend a great deal on your credit score, so keep this in mind when applying for private loans.

CAUTION! It may be tempting to use your credit card to pay your living expenses, tuition bill, or to reward yourself with a special purchase. We urge you to use your credit card(s) wisely since it is another monthly payment to make, and falling behind on a payment can adversely affect your credit rating. The bottom line? Use credit cards with great caution! Here are some other good tips regarding the use of credit cards:

  • Try to pay off your credit card debt before you enroll in order to reduce your monthly expenses.
  • Consider enrolling in a monthly payment plan instead of using your credit card for your student account.
  • Use the card for emergencies, not for routine living or as a convenience.
  • Remember that late charges and finance charges dramatically increase your credit card debt.
  • Don’t play the revolving credit card game, using a new card to pay off existing credit card debt.
  • Your credit card debt will be used to calculate your debt-to-income ratio and may make you ineligible for some private loans.
  • If you are late in making payments, it will impact your credit rating. You may be denied education or consumer loans, and later on in life, you may not be able to obtain a mortgage or even have the ability to rent an apartment if you make late credit card payments.
  • Always try to pay off the balance at the end of each month.

If you’re unsure of the status of your credit history, you can order and review your personal credit report. Credit reports will include information on your credit cards and consumer accounts, even inactive ones. Any federal student loan information will also be contained in the report.

from Kids Money Management http://www.kidsmoneymanagement.com/maintaining-credit-a-guide-for-students/

Acquaint your Kids with Money While They’re Young to Help Them Manage Money

kids-moneyIt is essential to teach your kids about money. You may think that it won’t be right for you to acquaint your kids with money. But, this is a wrong conception and some amount of exposure to money can actually help your kids grow up as a responsible human being. Money is one of the most crucial things for our living other than air and water. It helps us in obtaining all those in our life that we require starting from clothing to foods. So, it is important to learn about money form a young age.

How to acquaint your kids with money

There are some real easy ways through which you can acquaint your kids with money and these are:

1. Provide them a small allowance – You can start proving your child with a small allowance on a daily, weekly or monthly basis. Calculate how much your kid needs for a day or week or maybe a month and give them an amount slightly above than what they need. Ask them to save the extra amount.

2. Take them to the bank – You can take along your kids to the bank while going there for some work. Explain to your kids the importance and the services provided by the bank in simple terms. This may help in growing some kind of interest in your kids.

3. Gift them a piggy bank – As has been discussed in the first point, you can ask your kids to start saving. Now, in order to help your kids save money gift them a piggy bank that is cute and attractive. Talk to them about the importance of saving. You can even work on this by telling them that you don’t have the money in hand to buy them a particular thing they have been wanting. You would need to get the money from the bank or your savings account. This will help your kid in understanding the importance of saving.

4. Let them count money – In order to acquaint your kids properly with money you can let your kids count money. For example, if you find out that you have some coins in hand, you can give that to your kids and ask them to count the same and tell you the exact amount that it is amounting to.

5. Ask them to make a spending plan – In addition to ask your kids to save money, you can also ask them to make a spending plan and then spend the money only according to the spending plan. This can help your kids learn budgeting from an early age. This will also help them to better understand how the money should be used.

So, you can see that a little allowance and all of the above discussed ideas can help you in teaching your kids about money without over exposing them. This can actually help your children learn the actual value of money.

from Kids Money Management http://www.kidsmoneymanagement.com/acquaint-your-kids-with-money-while-theyre-young-to-help-them-manage-money/