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General Discussion => Welcome and General Discussion => Topic started by: MoonshinedStache on August 10, 2017, 11:22:31 AM

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Post by: MoonshinedStache on August 10, 2017, 11:22:31 AM
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Title: Re: Help Saving My Nephews
Post by: shadesofgreen on August 10, 2017, 11:29:57 AM
Wouldn't it just be better to open 2 savings accounts in your name or buy some bonds and hold on to them until your nephews are 18?

You might also want to look into opening a IRA or Vanguard account for them when they are 16 or 18 and possibly match the amount that they put into the accounts so that they see progress. I am not sure on the legalities of this though.
Title: Re: Help Saving My Nephews
Post by: meatface on August 10, 2017, 11:31:00 AM
Is the goal to save for them, or do you plan to instill personal finance lessons?
If the former, then why not just save money on their behalf and give it to them in the future. If the former, then you're a very nice uncle. Maybe open a joint, online savings account through Capital One?
Title: Re: Help Saving My Nephews
Post by: patchyfacialhair on August 10, 2017, 11:33:21 AM
Not a financial adviser but here are a couple options you could consider:

Savings accounts: Stupid simple, but stupid low rates.
UTMA: basically invest money for them over the years (index funds, mutual funds, etf, etc.) and this account transfers to their ownership at adulthood
529: good for school, possible tax benefits as you put money in, if they don't go to school, you can transfer the 529 to another family member in need of school money help.

Ultimately it's up to you. At the end of the day, just be a good example for them in real life so they can see what success looks like outside of their upbringing.
Title: Re: Help Saving My Nephews
Post by: Valhalla on August 10, 2017, 11:37:12 AM
Suggest helping the parents go through Financial Peace University. Might be gimmicky but it may work to help them improve their financial understanding and situation.  If that doesn't help... then nothing you can do will help much short of taking custody of the kids.
Title: Re: Help Saving My Nephews
Post by: Dicey on August 10, 2017, 11:46:26 AM
What is your goal? Are you looking to teach them about money, help pay for college or just give them a lump sum on maturity?

BTW, the third choice is the worst answer.
Title: Re: Help Saving My Nephews
Post by: honeybbq on August 10, 2017, 12:49:46 PM
I would save the money for them in a 529. It can be used for a wide variety of education expenses, not just 'college'. I would tell them about the accounts when they are old enough and can rationalize that going to school might be a good option/motivation. Otherwise, what is the money for?
Title: Re: Help Saving My Nephews
Post by: FinallyAwake on August 10, 2017, 01:41:17 PM
I've got a different perspective here.  Forget about what instrument to buy for them, and focus on spending time with them teaching them about money.  I would guess that they are getting a horrible education from their parents.  Part of the reason I like MMM so much is that my grandfather talked to me about the power of compound interest my whole childhood, and about how important it is to save money (he grew up in the great depression).  I may not have understood it at the time, but I did once I grew up.  Your nephews have plenty of time to make their own way, but they need to be getting educated from somewhere.  Buy them books for Christmas about finance, etc.

+1
Title: Re: Help Saving My Nephews
Post by: mathlete on August 10, 2017, 01:43:05 PM
I've got a different perspective here.  Forget about what instrument to buy for them, and focus on spending time with them teaching them about money.  I would guess that they are getting a horrible education from their parents.  Part of the reason I like MMM so much is that my grandfather talked to me about the power of compound interest my whole childhood, and about how important it is to save money (he grew up in the great depression).  I may not have understood it at the time, but I did once I grew up.  Your nephews have plenty of time to make their own way, but they need to be getting educated from somewhere.  Buy them books for Christmas about finance, etc.

This is a nice idea, but the kids are going to spend way more time being exposed to the parent's habits than they will be to OP's habits. You can make yourself available as a resource to kids, but ultimately, it is going to be up to the kid as to whether or not they care.

Title: Re: Help Saving My Nephews
Post by: mathlete on August 10, 2017, 01:57:28 PM
That is true, but it's a better strategy than just giving them thousands of dollars, if they are inclined to misbehave financially you might as well light it on fire.

You're probably right. But giving a gift is giving a gift. And accepting that you give up agency over how the receiver chooses to use it.

I'm really not trying to bash your idea here. It's probably the best idea. I just think it's a good idea to temper expectations about how big of an influence OP (or anyone) can have on the lives of other people's children.
Title: Re: Help Saving My Nephews
Post by: mathlete on August 10, 2017, 02:01:22 PM
OP, I applaud you for wanting to do something nice for your nephews. I'm a bit troubled by the thread title though. i.e., "Saving" your nephews rather than "Saving for" your nephews.

Maybe it was a typo, or maybe you're just being cheeky. But the phrasing still feels worth examining to me.

Sometimes adults change, but more often though, they are who they are. The parents will likely always be bad with money. And you and your SO will likely outlive your SO's parents. The kids are more likely to turn out like their parents than they are to turn out like you.

You can probably see where I'm going with this. It's probably best to detach yourself from the idea of "saving" them unless you're truly willing to go above and beyond here.

I know that the questions you probably have are more technical in nature, pertaining to 529s and such. I thought I'd offer this perspective though, because I have struggled with trying to help irresponsible family members too, and it took me a while to realize a lot of this.