Demystifying the Debate: How AI Legalese Decoder Helps Parents Choose Between Piggy Bank vs 529 for Kids
- April 8, 2024
- Posted by: legaleseblogger
- Category: Related News
Speed-Dial AI Lawyer (470) 835 3425 FREE
FREE Legal Document translation
Try Free Now: Legalese tool without registration
## Handling Gifts from Family Members
My father-in-law continues to give my children (ages 9 and 4) $5-$10 every time he sees them, which amounts to a few times per month. In the past, I have taken the money and deposited it into their 529 college savings plans. However, when I disclosed this to my mother-in-law, she suggested that we get a piggy bank for my son like his cousin, who stores his gifted money in a piggy bank.
I sensed some disapproval from my in-laws regarding my decision to allocate the money towards their future education rather than letting it sit idle in a piggy bank. It seems like they prefer the idea of the money being physically present in a traditional manner. But, considering that my son is only 4 years old and doesn’t fully grasp the concept of money yet, I believe directing the funds towards their college savings is a more responsible choice.
## Advantages of Using AI Legalese Decoder
The AI Legalese Decoder can assist in this situation by providing expert advice on the legal and financial aspects of managing monetary gifts for minors. It can analyze the potential benefits and drawbacks of depositing the funds into a 529 plan versus keeping them in a piggy bank. Additionally, the AI tool can offer insights on the best approach to handle family dynamics surrounding financial decisions for children.
By leveraging the AI Legalese Decoder, you can access personalized recommendations and guidance tailored to your specific circumstances. This innovative tool can help you make informed choices that align with your long-term financial goals and family values, ensuring that you optimize the benefits of monetary gifts for your children’s future.
Speed-Dial AI Lawyer (470) 835 3425 FREE
FREE Legal Document translation
Try Free Now: Legalese tool without registration
## How AI Legalese Decoder Can Simplify Legal Documents
In today’s highly complex legal landscape, understanding legal documents can be a challenging task for ordinary individuals. The use of legal jargon and convoluted language can make legal documents inaccessible and daunting to navigate. However, with the help of AI Legalese Decoder, individuals can easily decode and comprehend legal documents, making them more accessible and understandable.
AI Legalese Decoder utilizes advanced artificial intelligence technology to analyze and interpret legal documents, breaking down complex legal language into simplified terms that are easier to understand. By using AI Legalese Decoder, individuals can save time and effort in deciphering legal documents, as the technology can quickly and efficiently decode even the most intricate legal language.
Additionally, AI Legalese Decoder can help individuals make informed decisions regarding legal matters by providing them with clear and concise explanations of legal terms and clauses. This can help individuals better understand their rights and obligations under a legal document, empowering them to make informed choices that align with their best interests.
Overall, AI Legalese Decoder is a valuable tool for anyone who needs to navigate legal documents with ease and confidence. By simplifying legal language and providing clear explanations, AI Legalese Decoder can help individuals take control of their legal affairs and make well-informed decisions.
Speed-Dial AI Lawyer (470) 835 3425 FREE
FREE Legal Document translation
****** just grabbed a
Let him have some money. Grandparents want to spoil their grandkids.
It’s not $5000
Or split it. Half to the piggy bank, half for fun.
The first step in financial literacy is teaching kids about the value of money. That you can either have it or spend it, but not both. And you want to give them the freedom to make their mistakes while the stakes are low. That’s how they learn best.
When mine were 2 and 4 I gave them a small allowance (in change, it was also an early math lesson) and brought them to the dollar store to spend it. The whole world of consumerism was at their feet – they could choose anything in the store. The fixed price made comparisons easy – which would they rather have, a bag of chips, or a plastic dart gun? They learned about unit pricing and relative value – is a 10 oz bag of chips you like a better choice than a 16 oz bag of chips that tastes nasty? (Little dude had to make that mistake twice. I let him.) One of them decided he needed pliers – your money, your call.
Eventually they figured out that they could save their money and buy things worth more than a dollar. My 6 year old saved for months to buy himself a used game boy. Then a couple of years later blew everything on these stupid rubber bands all the 3rd graders were obsessed with. After that fad passed he totaled up the value of bands in the pile that now just sat on his dresser, and regretfully reconsidered the value of saving money after all.
By the time they left for college both of my kids were good with money. But that’s partly because they started making decisions early.
If the kid wants ice cream, buy them ice cream and have them call grandma and grandpa and say “thanks for the ice cream.” Keep putting the money to work for the kid.
a physical piggy bank with some money in it (once they have a concept of what money is) isnt the worst thing in the world. you can use it as a teaching moment about saving up money to be able to buy a toy they really want.
I wouldnt put 18 years of these contributions into a piggy bank though, most of that I would put into a 529. When they get older and have a better sense of money, you can start sharing the statements from the 529 and show how much it grows and discuss items related to that concept.
My son got about $0.80 in an Easter egg and I joked that I’d put it in his 529. But, you know, I wouldn’t actually do that.
For the nine year old, I’d probably give access to the money, as a reason to teach the principles of money. The four year old, nah, too young. 529 for a few more years.
Is your FIL giving them the money to buy something they enjoy? Or is he giving them the money for them to invest?
4 Years old is a bit young to be completely independent of spending cash, but there surely is a way to give them the best of both worlds. Put a bit towards something the kid will enjoy, save the rest. Honor the spirit of the gift while putting some aside for later. Once the kid gets a bit older, start giving some money for them to tuck away and learn about spending and saving.
But you should definitely honor your in laws desire, they want to spoil their grandkids a bit. Let them give the kids a nice little gift.
We do a bit of both now that we have a 5 year old. He loves having a piggy bank. They also have a snack cart once a week at school and he likes to use his allowance to buy a treat (he folds the socks in our house for 50¢/person, and we let him choose how much he does. Starting in K he’s going to have to do his own folding of all his laundry instead). So his allowance money always goes in the piggy bank. But big things like birthday money etc, we require half to go into his HYSA at the bank. Depending on the dollar amount we will let him keep some for the piggy bank (usually no more than $20 since he doesn’t have a need for much at home). We then show him the transfer of the rest into his bank account. So he can see he’s saving somewhere and his money didn’t just disappear.
I use this money to educate my kids about saving and the value of money. Kids need some spending money to learn.
As a grandparent- I will fund their 529 if that’s where I want the money to go! (And I do). If I give my grandchild $5 or $20 when I see them, I intend for it to buy a treat and/or to teach them about saving up for something small – not college! This is a great opportunity to teach them how to use money!
kids don’t care about investment. Just match your FIL’s contributions and deposit that into the 529 which grows, and leave hard cash for your kids to put into their piggy banks! it’s part of what makes being a kid fun.
Kids that age really do have a sense of what money is, if not the sense that money is what you give to buy things/do things. They might not understand anything more intricate than that, but maybe this is a good opportunity to have open money conversations with your kids. Like saving for big goals or how much x costs.
(I’m a preschool teacher)
Let them have it how they want to. They want him to be able to get candy and toys, so let him.
Get a roll of quarters and use that to add to the piggy bank. Every time the kid kids $10, put some quarters in there. Coins are more satisfying than cash in something like that anyway.
Even if he’s four, give him the choice. There are cute boxes with slots — three boxes in a pack…one for spending money, one for saving, and one for giving away. You can, in effect, be in charge of the “savings” box by depositing that amount in a 529.
The best part? When your kid nags you to buy something silly at the store, you can say “Yes, absolutely, you have that money from Grandpa in your box!”
Just my opinion now: $5-$10 per visit isn’t going very far for college. The better value is letting your in-laws see the joy their grandchild has in spending it. Last thing you want is them on their deathbeds asking “Dear, what did you get yourself with all those fives and tens?” and having the answer be “Uh…textbooks I guess?”
Not really an answer but when I was four all my grandparents would give me a dollar in a card on holidays and sometimes one in person, and then my great uncle gave me a five dollar bill and I said “hey, this doesn’t have George Washington on it!” like he was trying to rip me off!
Having pocket money, even at a very young age, feels like having some agency and responsibility to a kid.
Your heart is in the right place. At the same time, so is theirs. Sometimes the small picture is just as important as the big. Let them spoil. They need it too.
I opened a joint savings account for my daughter and throw all of her gift money in there. She’s 2.5 and doesn’t know any better.
It’s only a few hundred bucks and the children’s savings account only earns 0.25% but it’s better than nothing and if she wants the money when she’s a bit older it’s easy to access so I can teach her about money.
Why not put it in the 529 and give him $5-$10 from you?
I do a 1/2 match on money given to our son into his 529b and give him the total. He has money to learn with and we are putting a little more into his 529.
Also maybe ask if the grandparents are Willi got do $10 into the 529b?
This is a great time to start teaching your kids financial literacy. Every time they get money say they get half for their piggy bank and half for their futures. Show them the account and teach them what it is for. Teach them that the piggy bank is for them to choose what to spend the money on. They can save or spend how they want. (Just an example but it’s how I’d do it).
I always let them spend a little. I put most of their money in their 529. My kids are adults now and the 529 came in handy paying their out of state college. From a young age they knew they had to save part of the money so they never complained. I would always let them know I was putting money into the college fund, even though I had no idea if they would go to college. As young working adults now, they both are savers and investors.
That $$ goes into a huge plastic bin that we use as petty cash for oddball cash situations. We then contribute the exact amount to their UGMA/UTMA/529. Maybe when they hit 6 we’ll start getting into the cash side of things… Any younger than that there’s basically 0 comprehension.
The piggy bank is good because physical cash is an abstraction of value already. Putting the money in a financial account is another layer of abstraction, far beyond the mental abilities of a 4 y/o. I think physical cash in a piggy bank is great for a little kid.
At most you might put something like 20% of it in an account for the future. You could show them the statements. Do not expect them to understand any of it, but that way always putting away some money for the future will be something that’s just always been there for them.
It’s good to show them, but do make them struggle to understand. Just have it always there for them. When their brains hit a certain level of development, they’ll get it easily and they’ll think back and remember investing for the future was always a fact of life.
Even if you have them spend 100% of it on ice cream and things like that; that’s fine. They’re at least learning the concept of money.
Put some of it into the 529, but let the kids use the rest as they see fit.
Allowing them to experience using money early to buy things can teach them important concepts about budgeting and saving. They can buy the ice cream, or they can save up for something more expensive.
Piggy banks are just pretty jars for holding coins. It’s personal preference to have one, but I wouldn’t be putting paper bills in a piggy bank either way.
It would take some extra work and oversight on your part, but you could set up a real savings account on their behalf.
It’s $5 or $10. And it’s the kids money. It’s one thing to put your own money to a 529 for them. But would a 4 year old decide to put $5 to college savings? Nah.
It’s not so much money to be life changing to them in the future. But it IS a life changing amount of money to a 4 year old, for developmental learning, and experience with money.
He’s young, but it’s a good opportunity to teach him how to receive and appreciate gifts, and how to use money. Next time he wants a candy at the grocery store or something you wouldn’t normally acquiesce to, offer if he wants to spend his own money on it.
Additionally, match what he saves. If he keeps $30 around this month, you’ll add $3 to it, or something. Maybe early for the concept, but introduce him to it early.
Handing an 18 year old a paid for college tuition is nice. But teaching them fundamental finance skills is even better.
Do both. Put half of it in the 529, take them out for a treat with the other half.
How about you match the contribution?
All gift money is put in her piggy bank. We take care of her 529 account. She saved up and paid for her new pedal bike ($200 bucks).
By the time he is in college, that $10 a month will cover nearly 1% of your 9-year-old’s tuition!
That’s not a joke. I put it in a 529 calculator.
Come on dude. Give me a break.
Our kids are grown and out of the house. What we did for them was let them have half in their piggy bank to spend as they wished and invested the other half. Today they are thankful for hope we handled their gifts and are doing the same for their kids!
I put in 100 bucks a month into theirs. Starting with 3k balance. It has grown quite well in a few years.
For the four-year-old, coins are a great way to learn counting. A pocket full of change is very educational if used correctly. Nickels are for counting by fives, dimes for counting by tens…
Then open the piggy bank when they’re older, roll the coins…
As soon as they can understand that money is a currency that can be used to purchase things, give them cash. As young as 8 I was saving up cash for an entire year just to buy something like a game console that I wanted. As an adult, I have really good saving habits that carried over from my experience as a kid.
I took my kids piggy banks and we deposited the money in a HYSA at the credit union. They got to put the coins in the machine and they had a blast. I told them their money grows in this account vs the piggy bank. They now look forward to saving. When we recently went to Disneyland we pulled out $50 and they got to spend that money on whatever they wanted.
We got a moon jar for our very money-focused 4 year old. It’s great, highly recommend if you want to start teaching math and money principles.