by Rob Hetrick

Created on: June 24, 2009   Last Updated: June 25, 2009

The answer to whether you should give your children financial aid now, or make them wait to inherit, depends upon the household, the type of financial aid given, and the intended use of that financial aid by the children.

As a parent, the financial aid I am most willing and able to provide for my children is in the form of long term savings and investments toward their future. Both of my children have college savings plans that can also be used as individual retirement plans without them having to obtain a separate account in the future. I contribute a monthly amount into these accounts with the express purpose that the accumulated funds are to be used to assist them in obtaining a college education. I maintain ownership of these accounts while they are young, and once they reach an age where I feel they are responsible enough to take them over, I can transfer ownership solely to them.

If the funds are not used for college, they will still be accessible to them (through me) to help them do other things such as buy a home, attend a trade school, or start a business of their own. Additionally, since the accounts have been started for them now while they are both under 5 years old, the monthly contribution needed is very small and manageable for my wife and I. The accounts gain interest over time and based off of minimum returns, and by taking the annual rate of inflation into account, there should be enough money available to pay the majority of their expenses if they choose to go to college. I am not giving them a "free ride" or a "hand out." Instead, my Wife and I are trying to assist as much as possible while forcing them to be a joint contributor of the remaining funds needed.

The reason why we chose this plan for our children is because we believe that our children should be equal partners with us when it comes to getting the things they want or need from us. Of course we want to give them every opportunity to pursue whatever dreams and life ambitions they have, but we are not in a financial situation to be able to foot the bill 100%. By doing this, we believe we are teaching them the value of a dollar, and we are instilling in them the importance of saving for the future.

As a former Financial Adviser, I counseled many clients on the benefits of starting savings plans while they were young instead of waiting until they were fifteen years away from retirement. What many people fail to realize is that if you allow a savings program time to accumulate,

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