What do you do with kids' birthday money?

[elessar78]

Do you put it in a separate bank account? Just put it into the general bank account? They're still too young to know any differently

I feel we save at sufficient levels so putting in the birthday money in a separate account seems superfluous or at the very least symbolic. Which I'm not against symbolism.

But do I just chalk it up to the cost of raising a kid and just pocket it? Or is that "un-ethical"

I KNOW I'm overthinking this, as I do about a great many thing. But wanted to get others' thoughts on the matter.

[feh]

Open a savings account for the child.

[kork13]

Yeah, I'd just open up a savings account for junior, and use it as an opportunity to teach your child about money, saving, & preparedness. Get them set up with online access so that (down the line) they can see their money is there. In all likelihood, the amount is fairly insignificant to the household finances, so I'd just let them keep it and use it as a teaching tool.

[cooliemae]

My DW and I put any money our son gets into his 529 plan and we'll probably continue to do this until he gets old enough to comprehend better the concept of money. We do have savings account open in his name as well and regularly contribute money to it so that when/if we start giving him an allowance we'll have a stash of cash to pull from.

[disneysteve]

When she was an infant, I don't remember what we did. Once she was old enough to care, we would take her to the store to buy a present with that money. Ultimately we opened a bank account as she got older and the money got bigger. Now she's 17 and between gifts and work, she's got over $9,000 in her savings account so she's doing just fine.

[Baby_nurse]

All of my kids have had their own bank accounts from the time they could write their names. Birthday money was divided up between their savings account, for long term, and their piggy banks for wants.

[MonkeyMama]

I think it depends on the dollar amount, gifter, etc. As my family tends to think as the gifts "for the kids" at parent's discretion. Others seemed to be horrified by that mentality.

At some point we had to open savings accounts since they get small checks in their name. Initially we could deposit to our own accounts, but at some point our credit union insisted they had to open their own accounts. Which would not have been my first choice (they were only like 1 or 2). But I suppose it has also erased any doubt. Any checks go to their savings accounts. Cash goes into their piggy banks. I don't think anyone gave them cash before they were 4 or 5. At 5 they were given a piggy bank and an allowance. & they do sometimes save up and add to their savings accounts (or decide to deposit cash gifts).

We have one generous benefactor, for whom we do whatever they want us to do. Most of it is being saved up and invested, for college. They entrust us to invest the money.

[twest]

Our son has two accounts - one for college and one for his own savings. We do receive birthday money from grandparents and great-grandparents that want it to be used for college. In this case it goes to his mutual fund. With all other birthday money and allowance he earns it goes into his kitty cash account.

[JoeP]

If the gift is small, they get to use it for purchases we approve. Larger ones go into their 529 or savings account.

[SeanH]

How about some variation of savings bonds at TreasuryDirect?

My parents saved any childhood money and it turned out to be sufficient to buy me a used car when I left for college.

[snafu]

Our DSs had savings accounts from nearly day one. Grandparents and godparents always sent generous money and a small [cost] toy for every birthday and life event with the express intention of helping to fund college. When there was enough, we opened Index Mutual Funds for each boy and continued to add matching sums when they earned small amounts over the years. They are both currently in college and nearly cash flowing their costs. [I can hardly believe it]

[snafu]

double post

[Thrif-t]

We opened up Savings Accounts when the kids were born to stash their baby gift money. Added to it the birthday, Christmas and other celebratory monies. As they got older they had to put half the gift amount in their account and they could spend or save the other in their piggy bank.

[TBH]

Cash gifts (like the $5 his aunt sends him in holiday cards) go into his piggy bank for him to spend on wants.

Checks go into his 529, and generally he doesn't even know about them.

[rinamontella]

Just open an account in kiddy bank then saving the money for every birthday.