Real Answers for Life’s Money Challenges

My first grandchild was born last month.

I dont have a lot of money and Im paying off credit card debt.

But Id like to start investing money in her future.

A grandmother holds her granddaughter.

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What are the best options?

-J.

Dear J.,

Youre a smitten new grandma.

So its not surprising that you want to give the world to your familys sweet new addition.

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Im a childless personal finance columnist.

But Im also realistic.

Dont do this for yourself.

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Think of this as an investment in her.

When your savings are sparse, one small, unexpected expected expense can throw your life into disarray.

Credit card debt only increases the risks.

Youre also not preparing for the very big and expected expense that is your own retirement.

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Who do you turn to in times of need?

For many people, family is the starting place.

Thats why so many adults are part of the sandwich generation.

Theyre raising kids of their own while also helping out their aging parents.

But lets not kid ourselves: Its a financial strain for many.

So I think everyone will benefit if you focus on your own finances first.

(And in the meantime, babysit!

The value of your experienced and trusted caregiving cannot be overstated.

(Like youd listen to that!)

Assuming you want to invest in her education, a529 savings planis often the best way.

If your son or daughter opens one on her behalf, you’re able to contribute to it.

Otherwise, you could open one and name your granddaughter as the beneficiary.

The money you invest will grow tax-free.

You dont say anything about the finances of your granddaughters parents.

But kids have a way of costingmore than their parents ever expected.

Robin Hartill is a senior editor at The Penny Hoarder and the voice behind Dear Penny.

Send your questions about saving money to[email protected].

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