Madison based TrustEgg is launching their public beta today, and was also featured on TechCrunch. TrustEgg provides parents a way to save for a child’s future that’s ultra-simple, gets a market rate of return, and is accessible to families of all income levels. A parent can set up an account for each child in minutes and start contributing immediately, and the account can be shared with grandparents, aunts & uncles, anyone.
“Children tend to be pretty big budget disrupters,” says Monica Sipes, senior wealth advisor with Exencial Wealth Advisors in Frisco, Texas. Whether you want to teach your child smart money-management strategies, help them pay for college or set them up for financial success as adults, it’s important to jump-start savings for kids early on. A rule of thumb suggests a savings target of approximately $2,000 multiplied by your child’s current age, assuming attendance at a 4-year public college (at $22,180/year), and your family aims to cover approximately 50% of college costs from savings
Most banks and credit unions offer children’s savings accounts, which parents can co-own. These accounts can help children develop the habit of saving, rather than spending, all their money, you can also do this online with trusted entities like The Children’s ISA. “It can be a really valuable tool,” says Brian Jass, advisor with Great Waters Financial in Vadnais Heights, Minnesota. Whenever his young daughter receives a gift of money, he always makes a point to encourage her to save a portion of it.
TrustEgg is a 2011 Y-Combinator graduate, and tied for first place at the 2011 WI Early Stage Symposium’s Elevator Pitch Olympics. Read the full TechCrunch article here, and sign up for their beta here.