What is best way to spend hard earned money for your children

[NextInLine]

What is best "bang for the buck" things you can do for your offspring's, giving that you cannot afford to do it all. Assume that, you have taken care of your own retirement saving.
- Childhood year enhancement activities such as piano lesion (could be $2000/year), swimming practice ($3K/year), tutor ($3K/year).
- Funding college tuition (4 year-college could be $60-70K pre-paid).
- Less traditional, help fund Roth IRA at a very young age 10-12 when they be able to 'work' i.e. mowing lawn, baby sitting. (like $2K/ year for 10 years, until he/she to it from there. It should give them a good head start on saving).

What have you done and how did it turn out?

 

[MichaelB]

We gave our children a debt-free college education. Aside from their upbringing, I think nothing is more valuable. Now, on occasion, when I'm feeling generous, I add to their Roth retirement accounts.

I can see helping them with their children's college bills, but they still need to first commit themselves more clearly.

 

[neihn]

We gave our children a debt-free college education.

+1

 

[euro]

I have done versions of all of those for my two youngsters and to be honest, their personalities are so different that the end result seems to be very mixed. I have no ability to declare "what works and what doesn't, based on my sample of two...

 

[eastnortheast]

+1

We gave our children a debt-free college education.

+2 My folks did it for me. We are trying to do it for our kids. Save early, save often. LOL

 

[Fedup]

OP, We've done everything and more in your post. Things turn out well so far. My kids know we are still generous with them, but they are not spoiled. One exception, we paid for room and board but not to the tune of $60k-$70k per year. Maybe half.

 

[Philliefan33]

We provided debt-free college educations to our daughters, and I think that was a very good use of our money. But they also had "enhancement activities" growing up and I think they were important.

We spent a lot of time (and money) at various athletic activities. Our philosophy was that if we weren't spending Saturday afternoon at the ball field, we would be doing something else with the kids that would cost something.

(We've been fortunate enough to be able to do all those things on your list. )

 

[NW-Bound]

+1 on education for the children, realizing that it may not work for every kid.

It is fortunate that my children found work related to their education and have been doing well.

 

[GrayHare]

I'm glad my parents did not fully fund college since that encouraged me to learn more of how the post-graduation world works. To pay for tuition and reduce borrowing I got a job in my eventual field, and was way ahead of the other grads in terms of knowing the industry. Instead prior to my college days my parents spent on family experiences, travel mostly, of which I have fond memories.

 

[kcowan]

Our kids worked all through college but we helped them out so they carried no debt. Their grandpa gave them each a used car when they graduated. Now we fund a portion of our GCs college ($10K/yr).

 

[NextInLine]

One exception, we paid for room and board but not to the tune of $60k-$70k per year. Maybe half.

In my state, tuition of 4-year prepaid college cost $60-70K not include room and board.

Has anyone tried Roth IRA? $10K with 40 years of compounding interest would worth something. But on the other hand, it makes too easy for the kids that they may not appreciate "hard-earned" money.

 

[SomedaySoon]

+1 again for the debt free education. We paid all tuition/room/board, but that was it, they had to work to pay for all other spending. Both were hired directly from college into careers in their respective fields and are doing well - especially relevant as they graduated in 2008 and 2009 when many if not all of their friends were unemployed or underemployed for years after graduation and are struggling with paying those loans back.

 

[poorcarver]

Ours got debt free educations. As for Grandchildren, of which we have none at present, I would expect to assist with educational costs as needed.

 

[skipro33]

Nothing can help your children out financially than to have them lose money they worked hard to earn. The school of hard knocks my dad called it. I honestly believe that it is the most sure way they understand the value of a buck; that every drop of sweat has a price on it, so that when they receive MY money, they'll know and understand that it was by MY sweat and to not take that lightly and squander it.

My oldest son lost a good sum of money buying a home in New Zealand because he didn't understand their banking rules on mortgages. Long story short; he is now very conservative with investments and won't be walking into anything without a lot of research ever again. From buying a car to funding his children's education, he'll make sure he understands the terms because he lost money he earned from the sweat off his own brow.

I'm sure I'll help fund my grandchildren's education if it's needed, but I sure don't want to telegraph that message and have him think they can just forego that part of their responsibility as parents. Who knows what the future will bring? Maybe I won't be able to fund in the future what I'm willing to today.

 

[pacergal]

childhood activities were always funded, one per child per season--one child into sports, one into theater/dance. College agreement was we funded 100% community college, kids took out loans for rest and we paid interest while in school and assisted with payback on loans after graduation. One child we paid off loans after he paid about 1/3, other child has not completed college yet--stopped after a year, but is doing well in job and life. If she decides to go back to school, the offer still stands.

 

[Fedup]

I threw money at my kids for childhood activities. Anything they wanted they got it, but transportation was always the problem. My husband and I took turn taking them. That was hard.

 

[Redbugdave]

Nothing can help your children out financially than to have them lose money they worked hard to earn. The school of hard knocks my dad called it. I honestly believe that it is the most sure way they understand the value of a buck; that every drop of sweat has a price on it, so that when they receive MY money, they'll know and understand that it was by MY sweat and to not take that lightly and squander it.

My oldest son lost a good sum of money buying a home in New Zealand because he didn't understand their banking rules on mortgages. Long story short; he is now very conservative with investments and won't be walking into anything without a lot of research ever again. From buying a car to funding his children's education, he'll make sure he understands the terms because he lost money he earned from the sweat off his own brow.

I'm sure I'll help fund my grandchildren's education if it's needed, but I sure don't want to telegraph that message and have him think they can just forego that part of their responsibility as parents. Who knows what the future will bring? Maybe I won't be able to fund in the future what I'm willing to today.

Good points and post. I feel the same way.

 

[brewer12345]

Beyond all the stuff you have described? Easy: your time and attention. I have seen so many kids who grew up with every material thing you could imagine (up to and including a private plane), but whose parents were so focused on their career that they are fundamentally missing parts of what I would call a fully developed adult personality.


I'd say that with the possible exception of a college education, this is possibly the most expensive thing you can give them. Don't think so? Try reducing your hours worked materially and putting in less than 100% and see what it does to your earnings. Nevertheless, well worth the sacrifices.

 

[GravitySucks]

Yearly trips to Florida dog tracks. Taught them statistics.
Really - spending time with them. Reading to them and teaching them to read so that it was and is an enjoyable habit really help.

 

[mistershankly]

For those of you who paid or helped with the college education, did you have a separate account you saved in under your name... or a UTMA/UGMA... or 529, or did you pay from your own invested accounts?

Our DD's grandparents generously contribute to her savings account on birthdays and holidays, but we are struggling over saving additional money to the potentially limited options of a UTMA/UGMA or 529.

 

[Fedup]

Out of yearly income. But we had savings earmarked for college but not under 529. Only had a very small account under 529.

 

[EastWest Gal]

Debt free college, music lessons, travel. Music training has been shown to improve SAT scores and reduce problem behaviors. Now, leftover money is getting gifted in the form of a Roth IRA.

 

[Taxman59]

My parents made a gift to their grandchildren, and I matched it. This was sufficient to provide 4 years of in-state tuition (NC has great schools).

My oldest went on to grad school and finished with only $8k in debt, all to me, whereas his classmates from college were averaging about $25k and the masters classmates averaged $100+ in debt. Before heading off to college, he felt that the $$ that my parents gave was his money, and I should pay for it all . When he finished his Masters, he thanked me for the help! The middle son had some $$ left over which he used for clothes and a summer off. My youngest son, however tore up his knee in his 3rd year, and had to drop out (after the tuition had been paid for the fall semester ). He has reapplied for this fall, and the $$ may not be there to cover 2 more years. Of all three sons, he is the laziest and is going to have problems paying for the last semester or two of school.

This is a long-winded way of saying I think paying for college is the best way to go, but it obviously isn't for everyone.

I also agreed to fund a ROTH IRA with $3k for each of the boys when they had earned income. Again, the eldest gets the value, the middle appreciates it and the youngest asked if there was more! (BTW, some custodians will not open a ROTH for a minor)

 

[Fedup]

I gave my kids all of the grandparents money and more. Yes they got to spend it and enjoyed it. It's a first time they learned how to handle such large sum of money. Needless to say it was gone before freshmen year. About $7-10k. Maybe they learn that it's hard to save that money and be careful next time they get some large sum money. One can only hope. But I don't always believe one goes from point A to point B in a straight line. One needs to make mistakes along the way. How else is one going to learn?

 

[SomedaySoon]

For those of you who paid or helped with the college education, did you have a separate account you saved in under your name... or a UTMA/UGMA... or 529, or did you pay from your own invested accounts?

We threw 5K per year into NYS 501K starting from birth, it reduced our taxes. When they got to school we combined that money over the years with available cash flow, reducing discretionary spending as necessary. No regrets at all.