Aug 26, 2008

Our baby's own savings and retirement

I've been researching for a really good educational savings scheme for our little boy. Unfortunately there's very little of that in NZ.

Bank accounts
Many banks here in NZ offer savings accounts for minors. We are currently saving $50/fortnight to an online account with PSIS at 8.4% but that's under our name, hence taxed at 39%! So, I've decided to open him the same account under his name so that it will only be taxed at 19.5%. This is for his college fund. If I can find or if the Ministry of Education finally announces a tertiary savings scheme, I will immediately move the money there.

His retirement is now $1,120 after investing only $100 in addition to the $1K kickstart. Growth of $20 in less than 6 months! Yay! He's only 6 months old! The additional $20 is also from the government but that's still growth. We are not planning to regularly put money in his retirement because he's gotta learn how to do that! We just kick started it for him so that it's growing together with him.

I hope that we'd be able to teach him about proper finance management as he grows older. We have some good ideas on how to do that. I'm excited to become a financially-smart parent.

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