你的孩子收到生日钱

Let ThemSpend It Help ThemSave—And Set Goals Teach ThemHow to Invest YOUR WE ALTH JOURNEY—NAVIGATING LIFE’S FINANCIAL MILESTONESYour Child Receives Birthday Money How to turn gifts into financial lessons thatpay a lifetime of dividends Show Them thePower of Givingand Values When your children or grandchildren receive money for their birthday—or anyspecial occasion—it is an opportunity to start teaching them about investing andsmart financial habits. This is true whether the gift is a $20 bill folded inside abirthday card or a check for $2,000 presented as a gift for graduating from middleschool or another milestone. Here are four ways to put that gift toward teaching children financial lessons thatwill benefit them their entire lives. Private WealthManagementwilliamblair.com Help Them Save—And Set GoalsEncouraging your child to put the money aside for the Let Them Spend It Depending on how big the gift is, you may or may not becomfortable letting the child spend the full sum immediately.But giving children free rein over at least part of the giftallows you to start conversations about financial values andhow spending relates to those priorities. future can lead to conversations about the importanceof setting financial goals. Discuss how much money theyneed to save to reach specific goals and then help establishincremental steps for achieving them—whether thatinvolves getting a job and saving a portion of every paycheckor creating a budget. Questions you can use to spark conversations withyour child about money, spending, and values include: Examples of financial goals for children: How would you like to spend this money? Do you havesomething in mind such as a video game or an activity? Short-term goal: Buying a video game console in 6 months Would you like to spend it right away or wait until you havemore money saved up, so you can spend it on somethingmore expensive? Mid-term goal:Buying a first car or studying abroad in 5 or 10 years Do you know how other people in your family decidewhat to spend money on? Long-term goal:Buying a house in 20 years The best place to hold those savings will depend on thespecific need and when you will need it. For short-termgoals, you may want to set up a custodial savings account(governed by the Uniform Transfer to Minors Act, orUTMA) on their behalf—so they can see how bank accountswork. For long-term goals, consider showing them the valueof investing money and the potential to generate returnsover many years. Do you know how people earn money? Do you know whatyour family members do for work and how we earn money? Would you like to hear about ways you could use thismoney to help people who don’t have as much as you? Private WealthManagementwilliamblair.com Teach Them How to Invest What is the best type of account for investing yourchild’s money? While children cannot open their own brokerage accountuntil they turn 18, you can still put the money in an accountand invest it on their behalf. This allows you and your childto track the account’s performance over time, and it givesyou ample opportunity to explain the fundamentals ofinvesting—such as how stocks and funds work and the valueof diversification. The most likely vehicles to consider for investing a child’smoney for general purposes are: UTMA Brokerage Account– An easily established, flexibleaccount where assets can be used for any purpose thatbenefits the child once they reach the age of majority. Trust– A more formal structure that allows you to setspecific terms and conditions for how and when the moneycan be used. How detailed you get, of course, will depend on the child’sage and interest level, but even when children are young,understanding the basics of investing can help preparethem for saving and investing when they are older. Custodial Roth IRA– If your child has earned income, thisaccount allows them to begin saving for retirement early.Contributions grow tax-free, and withdrawals in retirementare tax-free as well. While it’s designed for long-termuse, contributions (but not investment earnings) can bewithdrawn at any time without penalty, which can providesome flexibility. Before you help your child invest their money, thereare a few important questions to answer. Private WealthManagementwilliamblair.com If the money is earmarked for a specific goal, such aseducation or healthcare, there are other purpose-builtvehicles to consider. Each account type comes with its ownadvantages and trade-offs, so the right choice depends onyour goals for the money. What kind of investment vehicles should you use?Individual stocks and pooled funds (whether mutual funds or exchange-traded funds) each have their own advantagesand disadvantages when it comes to being a teaching toolfor kids. What is the best type of vehicle to establish for your child?The decision typically comes down to the amount of moneyyou plan to put into the account, the degree to which youwant to restrict the child’