9 Ways to Make the Most of Your Family’s Monthly Money
Monthly child tax credit payments have arrived, providing 35 million American families with hundreds if not thousands of dollars until the end of this year.
One-year credit extension, included in the massive COVID bailout bill President Joe Biden signed in March, offers couples earning less than $ 150,000 – $ 75,000 on a single income – $ 250 per month from July to December for each child aged 6 and 17. For children under 6, the monthly payment is $ 300.
For eligible but affluent households who may not need the funds to pay off the debt or take care of most of the household, the influx of money provides an opportunity for children to learn how to manage their money.
Here are some ways to make the most of your family’s child tax credit money.
1. Buy savings bonds
Savings bonds are great gifts for children, especially younger ones who won’t be tempted to cash them anytime soon.
Bonds are basically like loans you give to the US government. They can be redeemed at any time after 12 months, but redeeming them too early can cause you to lose a significant portion of the interest or even cost you a penalty.
Series EE or I savings bonds will earn interest for up to 30 years. You can purchase them, on behalf of your child, online at TreasuryDirect.gov.
2. Offer the children a share of stocks or an investment account
The stock of a reputable company is a gift that can grow. And there’s no better way to teach kids about investing than by making them shareholders themselves.
Are your kids obsessed with Frozen? Buy them in stock at Disney. Or maybe you can’t drag them out of the computer at bedtime. You can buy them stock in Roblox, or maybe Nintendo.
And if you want to foster a long-standing passion for investing, setting up an account with a child-friendly investment service is an easy way to get them to send their spare change at work to Wall Street.
3. Give kids their own debit cards
Another great way to teach your kids about money management is to set them up with their own debit card.
You’ll want this to be a card that you’ll be overseeing – sort of a debit card with drive wheels.
A debit card for children can be controlled by parents through an app. You can set up the card to automate benefit payments, set interest rates paid by parents, or assign tasks to help your kids manage some early income.
4. Open a savings account
Piggy banks are fun, but your kids’ savings don’t do anything for them sitting on the shelf. A savings account can not only help you teach them how to bank, but it also puts the funds to work.
What you should be looking for is an online savings account which has a higher interest rate. Then, together, you can set savings goals, such as a new video game console, bike, or art supplies.
While your children are still young, you will likely need to log in as the co-owner of the account. But once they’re mature enough to take control, you can turn the management over to them.
5. Start an education savings fund
It may take a few years (or decades), but eventually your kids will thank you for setting up a college savings fund for them.
Open and contribute to a 529 education savings plan will help put them on the right track for their future – and help offset the stress of paying for higher education.
These plans are offered by the states and also offer certain tax benefits. You can either save and invest a large amount of money for your child’s higher education or prepay the tuition fees at a participating school.
6. Put together a thank you package
Have your children’s teachers worked double time over the past year to make the challenges of the pandemic a little easier for your children? Or maybe grandma and grandpa helped you babysit so you could keep working?
If someone in your child’s life deserves special mention, you can use some of the money from the children’s loan to teach a lesson in expressing gratitude.
When shopping for the right gift, stretch your dollars as much as possible online by downloading a free browser extension which automatically searches for better deals and coupons before clicking “buy”.
7. Make donations
Did your family fare well throughout the pandemic? Others have not done well, with almost 11 million children living in poverty Across the country.
Child tax credit payments are a great opportunity to teach your kids how to give to those in need.
Get your kids involved by having them help choose a charity to donate, based on their interests or age group. Your household should be able to claim these donations when you declare your taxes Next year.
8. Spend on something amusing
After all the lessons on how to responsibly spend money, how to save, and how to invest, why not give your kids some to spare for fun?
Maybe they want a new pair of running shoes or a family board game. Either way, letting your kids choose how they spend some of their money can help them feel empowered and mature.
If they already have plenty of spending money, perhaps put the funds aside to use later to book a relaxing beach vacation the whole family can enjoy after the stress of the pandemic.
9. Buy life insurance
One of the best things you can do for your children is to make sure that they are taken care of if anything happens to you.
Use your funds to buy a affordable life insurance policy will offer your family financial protection and give you some peace of mind.
A limited-term life insurance policy can provide money to pay off the mortgage and send your kids to college, if you weren’t up to it. A permanent life insurance policy can be a “cash value” that your children can use when they grow up.