My Son's Money

My son, C., will be 18 months old tomorrow. He has a while before he's old enough to spend his own money. But in the mean time, he has collected a small sum of money from gifts and holidays. I would like to help grow his money until he is old enough to manage it himself.

Right now, we have his money stowed away in a simple savings account at our local bank. I see this only as a temporary measure due to the low, low interest rate that is offered. What I would like to do once he has enough is move his money into a long-term CD. He would get a much better interest rate and there would be no concern over liquidity since he won't be needing it anytime soon. Our next step would be to move his money to a money market account or fund. Again, this would allow him a better return on his money plus give him some access.

I've also thought about opening him a high interest rate online savings account like ING or HSBC Direct. I think for the sake of simplicity and accesability we will forgo this option for now. I don't know. What do you guys think?

My company offers U.S. Savings bonds through payroll deduction. I think I might start buying him bonds for his birthday and Christmas just to give him another option in his portfolio.

I know it seems like a long time before any of this will really matter. However, the past year and a half have flown by us. I don't want to wake up tomorrow and him be 18 going off to college unprepared. These are the type things I think about now. It's amazing what can change in a year and a half.

What say ye?

The Importance of an Emergency Fund

Well, I got a letter in the mail today that everyone dreads. I got a letter from the IRS telling me I owe $913 from our 2006 tax returns. I'm still not clear on where they came up with this but I believe it's from my wife and I taking payment from the state retirement funds when we moved instead of having it rolled over into an IRA. I thought we had taken care of this (as far as taxes) at that time, but apparantly I was wrong.

I'll go ahead and say it: This sucks. I've called my accountant to see if this is a mistake. With my luck, this is no mistake and I'll have to pay the money. I've just got that feeling.

I think there is two lessons to take away from this situation:

1. When in doubt, call your accountant! Even if you think it's a trivial matter, you are better off being totally sure by checking with a professional.


2. Have an emergency fund. Luckily, we've been able to build up a small emergency fund over the past few months. (Thanks economic stimulus check!) The fund is no where near what I would like it to be but a least there is enough cushion in it for us to handle an unexpected expense like this.

Anyone ever had similar experiences?

Addition to the Blog

My wife, N., edits my posts for me. As she was reading over the draft of my last post, she said my side of the story made her look like a "shrew". I explained to her that wasn't my intention and I was sorry she felt that way.

So our solution to this: she will start contributing to the blog. Not only will you get my side of our financial issues, N. will have her own stories and opinions to share. I think (and hope) this brings a much broader appeal to our blog.

Hopefully that way, you'll get both sides of the story.