Investing in your Child’s Future

As a new parent, there are many things that will cause you to worry. Your child’s future is one of them. Investing in an UGMA account and thinking about scholarships will help you relieve that stress. Investment accounts for kids can help give your child a financial head start.

What Is an UGMA Account?

UGMA stands for Uniform Gifts to Minors Act, and it’s a type of custodial account (meaning it’s managed by an adult on behalf of a minor). Minors aren’t legally allowed to enter into contracts. Generally, this means they can’t own stocks, bonds and mutual accounts. In most states, the minimum age to invest in and trade stocks is 21, and in 10 states, the minimum age is 18. A custodial account or a trust can hold investments until children come of age.

With a typical trust fund, parents would have to work with an attorney or go through court to prepare documents and appoint a trustee. An UGMA account follows a state statute’s terms, so it can be simpler to set up.

Every year thousands of high school graduates prepare to launch themselves into new lifestyles at the colleges of their choice.  This statement actually needs some rephrasing: every year thousands of high school graduates prepare to launch themselves into new lifestyles at the colleges that their financial situations allow.

Plainly put, college is expensive.  A four-year degree is not cheap, and it leaves many students heavily burdened by student loans upon graduation. 18-year-old students going into college usually do not have the money for college, and they do not start working towards degrees, their chances of landing rewarding careers are much slimmer.  The initial financial burden will almost always land on the parents, and student loan debt will land on the child after college is over with.  For some families, this is a painful and inevitable reality of college. Some students earn extra money if they teach English in China after they graduate.

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The simple idea that any kid can go to any college he or she desires is basically a facade because many are simply unaffordable.  Many students choose cheaper schools since there are less costs to worry about, and common scholarships are often to competitive to provide aid for high school graduates to just go wherever they desire.  There are some ways to combat this combination issue of college choice and onslaught of debt.  If you have a child getting ready to enter college, suggest that he or she looks into unique scholarship opportunities that could help alleviate the financial strain that paying for college often leaves on both parents and child.

A unique scholarship, or weird scholarship, is exactly what it sounds like.  It is a scholarship that applies to someone who fits a unique description.  So instead of a scholarship that applies to a “standout, driven, and resourceful student pursuing engineering with a GPA above a 3.5,” a weird scholarship may apply to a student who has three fingers on one hand or is deaf in one ear.

There are various types of these scholarships available across the country that only consider applicants who fit a corresponding unique description which are far more attainable that the all encompassing scholarships that sort through thousands of applicants.  The advantage of applying for these scholarships is the lack of competition.  Instead of getting weeded out among thousands of applicants fighting for a “young scholar” award of some sort, your child can be at the forefront of the competition in a scholarship race that is less than a tenth of the size.

The secret to finding these weird scholarships lies in searching what makes you, or your child, unique; it can literally be anything that comes to mind.  Simply searching for a scholarship pertaining to only people who are between the heights of 5’10” and 6’0″ can literally produce scholarship opportunities that match that description.  The only way to discover these scholarships is to diligently search them out.

One such example of a unique scholarship, which I would search for myself, is a scholarship for individuals with red hair.  After searching online for a scholarship pertaining to redheads, a website popped up with that exact opportunity.  I found a scholarship that applies specifically to myself with a much smaller number of potential applicants as compared to the large, nationwide scholarships open to almost anyone.

With a quick Google search, I was able to find an opportunity that fit my own traits perfectly.  Next time you, or your child, are looking for financial aid, be sure to capitalize on the unique characteristics that you possess.  These characteristics could be the difference between crippling debt from student loans or leaving college with a clean slate.