Managing Investments for Kids

[Zaratustra]

Hi
I read for some time here, with enjoyment, a lot of open-minded threads and ideas on education, skill learning, financial tips and walkthrough for kids at variety of ages. I learning so much from you guys :)

I am thinking of copule of possibilities for managing the savings for our kids, and I would be glad to hear another opinions and ideas.

1. The easy way, open seperate accounts for each kid/saving.
   pros: that way each child has its own money, each kid has its own interest and revenues and the investments times are seperate from each other.
   cons: managing fees can be higher. managing multiple acc. can be messy.

2. Same account as our money, but the kids money invested in other assets than ours
   pros: same account, fees as we have (pretty low), easier to handle the money
   cons: if both saving's kids and our saving has the same assets/shares - there must be a way to differ somehow the interests of our money (and targerts) with the kids money and from each other. any idea? apps? excel?

3. Same account as our money, but there is no "kids money". all money is the family money
   the logic of this, no matter what is the saving's amount they get on their adulthood, whenver they'll need money the parents almost always will help them from "parents' money" so the virtual separation of "parents" and "kids" money is wrong.
   pros: that way the managing money is easier, and the revenues are the same for all kind of "moneyis"
   cons: (?)

I found that option 2 is the preffered one, but I'm very confused about the the efficient way to manage, record, handle their money from ours, and from each kid saving
how to seperate the time-span of each kid, each presents and savings?

Thanks

[GizmoTX]

Is this money that your children have saved, or that you are saving for them?

[Zaratustra]

I am talking about amount of money that we save for them at birth until age 18-20.

[k-vette]

I am doing the same thing and use an investment account that's specific for them.  That being said, I also use ynab for budgeting.  It would be relatively easy to see how much is theirs even if the account was combined.  One account is for two kids.  I have a goal for each.  If it is surpassed, extra retirement money for me.  :)  neither kid will know about this until that age.  I'd like them to work for their own money while growing up.

[GizmoTX]

Part of your decision depends on whether the kiddie tax will apply & how concerned you are about this money being included in FAFSA calculations. Personally I'd prefer investing in retirement accounts for education rather than 529s, & never UGMA accounts.

We cared about avoiding the kiddie tax & wanted flexibility concerning schools, so we opted for irrevocable annual gifts to an educational trust, which pays its own taxes (lower than our rate) & specifies a delayed payout for any funds remaining after or instead of university graduation. Whatever the trust doesn't have to spend for DS' education eventually comes back to him, so he is directly rewarded for scholarships & internships. The trust is invested in tax friendly index funds & some stocks.