sunnyday wrote:My wife and I had our daughter three months ago and my parents gave her $100 as a birthday gift. I'm guessing she might get some more cash gifts as she grows but probably nothing much more than a hundred or so dollars a year. What would you recommend doing with the money? Am I able to open up an account in her name? It's probably not enough to bother setting up a 529 account or a brokerage account. Should I put it in a CD with my bank? Right now I'm leaning towards spending it on either her baptism or her 1st birthday party -- on catering, decorating, etc. However, if she has her own financial account it could teach her some good lessons about personal finance down the road.
When my older kids get money now (they are 5 and 3 - the 6 month old doesn't get much money) we spend it on something like a Children's Museum membership, pool pass, day at a ballpark, etc. We like to have experiences with it. I already save for their college. When they get small amounts randomly ($1 or change here and there) they save it in their bank. I make sure when we have the experience purchased with gift money that I tell them that this was from grandma or their uncle, etc.
My kids recently got $23 by crushing and selling aluminum cans and they took it to a ball game and got to buy whatever they wanted... which was cotton candy and ice cream ($23 doesn't go far). They got to choose and I helped them with how much different items cost. It was pretty fun - they got to eat junk food that I would have not bought for them (or at least not that much of it), and they learned how expensive things are, especially at ball games, and that money is finite. WIN-WIN!
An elephant for a dime is only a good deal if you need an elephant and have a dime.