Saving for Your Grandchildren

by Miriam Caldwell | More from this Blogger

05 Oct 2007 09:16 PM

If you are a grandparent you may want to help your grandchildren to pay for college. This is a great thing to do if you have the money. You have several options available to you. You should decide which one will work the best for you and your situation.

1) You may decide to contribute to your grandchild's 529 account. If you decide to do this then you need to the parents of your grandchild to make sure that you do not exceed the amount that the child is allowed to save each year. You may incur penalties if it goes over.

2) You may decide to open a savings account in your grandchild's name and contribute money there. This is one of the simplest ways to set this up. If you are an owner of the account then you need to make it clear that this account is intended for your child.

3) You may have one big account or several investments that you plan to cash in when your grandchild reaches college. If this is the case you need to make your intentions clear in your will. This is a very easy way to distribute the funds while you are alive, but it may cause contention between grandchildren if you were to pass away.

4) Savings bonds may seem like a good idea, but the rate of return is fairly low. Additionally the bongs take a long time to fully mature. Many people make the mistake of thinking the bonds are worth their face value in just a few years.

5) You can also offer a dollar matching or doubling program up to a certain amount each year when your grandchildren are older. This will help your grandchildren pay for college while encouraging them to work as well. You are giving them both an education and the opportunity to build character.

Related Articles: Tips for Saving and Raising Money for College

College Savings Plans

Learn more about Miriam Caldwell

Miriam is a SAHM mom of three children. She has a daughter who is seven, and two sons, four and two. She loves being a parent and spending time with her children.

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