January 19, 2004

Kate Goes to College

Okay, so you may need to wait another 18 years to read the teary-eyed narrative of my baby girl going off to college, with pictures of course. Nonetheless, Ken and I need to start preparing ourselves financially -- as well as emotionally (haha) -- since it's never too early to start saving. We want to make sure our baby can afford Yale once she's accepted. ;-)

So, last month Ken and I opened two funds for Kate. One is a 529 College Saving Fund and the other is a Uniform Transfer to Minors Act Fund (UTMA). In addition to any money Kate receives as gifts from family and friends, Ken and I will also be contributing a minimum of $25 each month to each account. We're hoping she'll have a nice little nest egg for when she starts her life as a young adult.

The 529 will very obviously go to Kate's college but the UTMA can go to anything, from a new car or a first home, to a new business investment or an early retirement. An UTMA is a little like a trust fund that Kate will get full ownership of when she turns 21. Let's hope we've taught her well by then, and that she doesn't go blowing it all in one place, like the shoe department in Bloomingdale's.

Bob Bobala at Fool.com wrote a great article about how an UTMA can make your kid richer than you ever were: Turn $1,000 Into $1 Million. Gone are the days of filling pink ceramic piggy banks with spare change and giving gifts of savings bonds with low rates of return. This new generation will prove to be a group of savvy investors discussing their diverse portfolios at middle school show and tell...with a complete interactive PowerPoint presentation no doubt!
Posted by Jean-Marie at January 19, 2004 11:43 PM
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You are doning a Great Job as parents! Kate is so very blessed to have a Mom and a Dad that are taking interent in Kate's future! Keep up the good work! Posted by: Nana Carol at January 20, 2004 10:42 AM
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