... high-school vehicle fund, ...
1) Am I completely over-thinking this? Almost being a bit excessive?
2) If this does seem like a good plan, what investment route would you consider?
Welcome to the forum, Dapper. I think you're answering your own questions just fine. My response to (1) is "Oh, yeah" and your answers to (2) can start from these ideas below.
It makes sense to start the transfer process for your GI Bill now, but only because the military services and the VA screw up the paperwork so frequently. I'd just transfer a month each to your spouse/kid(s) and then wait to see whether a bigger transfer makes sense. You or your spouse might decide to use the GI Bill a few years down the road to embark on your own bridge careers with salaries far higher than anything the GI Bill could pay for your kid(s).
https://paycheck-chronicles.military.com/2017/05/18/dont-save-gi-bill-kids/Before you plan your kid's financial life, let's back up for a minute and check the planning for your life.
What's your plan for the military? Do you need to save up for a transition fund in the next few years? (Hint: please don't tell us that you're going for 20 unless you've already served at least 16. Only 1 out of 6 servicemembers serves long enough for a pension. But we realize that you're going to add four years for your GI Bill transfer.) What's your plan after the military? What are you doing to get there?
Are you maximizing your contributions to your Roth TSP, your Roth IRA, your spouse's Roth IRA, and your spouse's Roth 401(k)? Are you saving more in taxable accounts? (I agree that latter question might not be achievable if you're still pushing to achieve the former question.) What percentage of your income are you saving/investing for your financial independence? How long will it take for you to reach FI?
Are you eligible to convert to the military's Blended Retirement System next January, and if so what have you decided?
What's the asset allocation plan for your FI investments (including the TSP)? The reason this question is relevant is because you might consider a similar AA for your kid's college fund.
If you want to build a college fund (pro tip: it's not your obligation) then you're right to want to start on the compounding now. But you could put part of those funds in a 529 (2-4 years at community college & State U) and more funds in taxable accounts (in case your kids don't go to college). Instead of plunking down $10K-$20K today it might make sense to set aside $100-$500/month for 10 years or so, but either decision will get you started toward the goal. The rest of the $10K-$20K will do much better in your retirement accounts.
I don't know what brought up the idea of braces for a kid who might not even have teeth yet, but the orthodontia tech gets better & cheaper every year. Cash flow this one. We didn't even use dental insurance-- we negotiated a cash price with a large discount for paying up front.
Teen drivers don't need their own cars because they'll use your car while they're running all of your errands for you. Seriously-- I didn't set foot in a grocery store or a Wal-Mart from the time our daughter passed her license exam until we dropped her off at the airport to go to college. She also drove to all surfing, martial arts training, and other family activities. In fact I'm having a hard time remembering any moment in the last decade when I was driving a car with my daughter in it.
Not only does that
let you drive less give them more driving practice, but it also lets your insurer offer an "occasional driver" discount to a house with more drivers than vehicles. The law varies in every state, and who knows where you'll be living 15 years from now.
But instead of taking care of your daughter's financial future, you could teach her to manage her money. Be alert to her financial training opportunities. It's as simple as showing her that it takes money to buy things. When she's 3-4 years old and you go to the grocery store, you could give her 50 cents or a buck for her to buy "one special thing".
For example, on our daughter's 8th birthday we started the "Kid 401(k) Car Fund". Her allowance went up to $8/week, but $3/week was auto-deducted to the 401(k) (and matched by parental contributions) to save for her future. It's just like a grownup's 401(k), and on her 16th birthday ("an entire lifetime away!") she'd have at least $5000 in her 401(k) for her driving expenses.
I had to reverse-engineer the matching contributions and the market returns on the spreadsheet, but every 3-6 months we'd review the progress of the Kid 401(k). It was a great teachable moment for concepts like savings goals, interest, compounding, exponential curves, and spreadsheets. Of course I'm pretty sure all she heard at first was parental "Blah blah blah" while inside she was thinking "Mustang! Pickup truck! SUV!!", but eventually some of the financial concepts got through.
Better yet, it removed all the angst & drama over teen driving and replaced them with realistic expectations. She knew that when she turned 16 years old then she'd be able to afford a car... and insurance... and maybe even some gas.
If that idea piques your interest, then check your local public library for a copy of David Owen's "The First National Bank Of Dad". We used all of his techniques to teach our daughter to manage her money as soon as she stopped putting it in her mouth.
You can read more about raising a money-smart kid at this post:
http://the-military-guide.com/raising-a-money-smart-kid/It also shares what she decided to do with the $5000 on her 16th birthday. She totally blindsided me, too.