I grew up in an upper middle class family. I always got a ton of gifts more my birthdays and Christmas, was able to try different sports, go to college, and will soon be attending grad school. All because my parents worked their butts off to give me those things. And I will be forever grateful for the things they did for me. But I am trying to also learn from their mistakes.
While my parents have always made good money, they’ve never been able to fully dedicate themselves to saving for themselves. They’ve also spent a good portion of life living at their means, and not below it, even before sending me off to higher education. It’s put a lot of stress on them and I don’t want to repeat that. I’ve already got some money invest myself ($2,500 into a Roth IRA and $1,500 into the S&P 500 at 23 years old). I’m trying to set myself up for success, but also want to set my future kid up for success as well.
Due to some personal reasons, I’m not feeling up for getting married or starting a traditional family in my lifetime. However, I do want to have a kid, be it through foster care/adoption or through other means. And I want to make sure that kid has a decent running start once they turn 18. If I can play my cards right, I am going to buy myself a house that will allow me to live well under my means and invest in both myself and my child. I’ll be more aggressive saving for myself, but I want to put at least $100 away for my future child every single month for 18 years, and then give that child the money on their 18th birthday. And I want to make sure I’m yielding as much money from that account as possible once those 18 years are up.
Would it be better to put that money in a HYSA for them to have at their disposal once they turn 18, or put it into an investment and gift them the account once those 18 years have passed, if that’s possible? And is this even a good idea in the first place?