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Family Money

Have you ever bought stocks for your kids? If you answered no, you are not alone and you are actually in the majority of parents I asked.

Don’t read me wrong, buying stocks for kids is a great way to save money for your children’s future; however, it didn’t come to mind when we started saving for our boys’ futures. We did open college saving plans. We chose Virginia529 inVEST plans because it allows us to put whatever money we can aside each month, tax-free and can be used at any university, not just those in Virginia. For more information about setting up college savings plans, read my earlier article at http://bit.ly/college-savings-plans.

Now that my eldest is 8, and writing this column has opened my eyes to buying stocks for kids, I plan to buy him a stock for his First Communion in May. It’ll be fun to help him track his stock and, as an added bonus, help teach him financial responsibility outside of his piggy bank.

We’ll let him pick his stock based on what he likes or uses so he is vested and more likely to want to learn and follow the business, but ultimately one that reflects our family’s values, rather than the stock’s long-term outlook. Perhaps he’ll choose stock in Apple, Disney, GameStop, McDonalds, Nintendo, Netflix, or Under Armour.

Coincidentally, all the parents that I asked that had bought stock for their newborns bought Disney but their children don’t follow the business yet.

If you don’t have a broker, consider buying stock through TD Ameritrade or Scottrade, or another easy buying option like Stockpile. Stockpile is one of the cheapest ways to buy small amounts of stock at $2.99 for first stock + 99 cents for each additional stock + 3% credit/debit card fee.

Another way to create investments for your kids is to pick a mutual fund and allocate money into it ($100 a month or any amount you can afford). Reinvest the dividends you earn and then buy more shares when the price goes down or fewer shares if it goes up.

No matter how you save for your children, it is an investment in their future. If your family is like mine and you would rather not acquire another toy, gently suggest to family and close friends to give a small token gift and/or a monetary gift towards their 529 plans or a Stockpile gift card. Giving your children the knowledge that their future is being financially thought of will also give them peace of mind.

Nikki Ducas is a Fredericksburg mom teaching her two young sons financial responsibility with the less is more mindset.

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