Re: How much would you spend..
As a person who has done a great deal of financial self analysis, let me tell you what I would do. Assuming that it's your baby (I can't remember from your post if it is) I would buy the baby one or two oufits, not speding over $25-$50 on them. Then I would do one of three things:
1. purchase $100-$500 worth of 10-year Tbills.
2. Open an ING or Emigrant Bank online MMA transfer $100-$500 into it.
3. Open a 529 college savings plan. I am not sure what sort of buy-in you need (some like IRA's will require $2,500 to start). If you can open one add $100-$500.
Do one or all, or a combination of these each Christmas. Principal alone for these over this time will be $1,800 (thinking until kid goes to college here if you get the drift of this post). As a somewhat recent grad school graduate let me tell you this: student debt is some of the worst debt you can have. Despite the comparatively low interest rates, it hits you at the most vulnerable time in your financial life: right after graduation from college. Give your child the gift of freedom, lower the amount of student debt that your child must have after graduation.
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