What's the best way to save daughter's child support money?

[mc1127]

My daughter is 8 and receives $380 a month in child support. Until now, I've really relied on using that money to help pay bills/car payment, but recently my husband and I have paid off almost $7,000 in debt and I won't need to rely on my daughter's child support to pay bills. I want to start putting that money up for her to use in the future...1st car and college. Do I just put it into a savings account and let it sit, or are there other types of accounts I could put it into that would be better? I'm stupid when it comes to investing, but I would really like to start saving for her future now. What should I do with this money?

[feh]

Do a google search on 529/educational accounts. I suggest the Utah plan.

[disneysteve]

Do a google search on 529/educational accounts. I suggest the Utah plan.

For 529 and other college savings info, go to savingforcollege.com. That's the best site out there.

[kork13]

Do a google search on 529/educational accounts. I suggest the Utah plan.

I'll second the idea for a 529 plan. College is EXPENSIVE!!!! It'll take a while to save up for it. Cars, and especially first cars, can be quite inexpensive if you go for a safe but used car (like a 4-5 y/o Civic, Accord, Corolla, or Camry, for example). Plus, car loans, if necessary, are generally much more manageable than a massive collection of student loans that drags on for 10-20 years. Save for college -- your daughter will be grateful. Besides, outside of daily living expenses, I think college is one of the best/most appropriate uses for child support money (personal opinion).

[snafu]

While I like the idea of a college saving plan, it's important to read and understand the terms and conditions of a 529 plan. Withdraws are very restricted and you need to know the fees and hidden expense ratio which silently transfers money and profit to the agent. For the time being I'd open a custodial, online savings account with Ally or Capital One or something similar so that the child support contributions stay separate. Meanwhile look at low cost plans from Vanguard, Fidelity or something similar. We're happy to discuss the choices you're leaning to and their costs.

[MoneyTips4U]

I third/fourth the 529 plan. It's a great thing. If the money isn't used on your daughter it can be transferred to another beneficiary. If it is not needed at all for schooling you can withdraw it and use it as you please (after paying taxes and a minimal penalty).

Make that money work