As someone who had to make this decision around the same age (currently 25) I leveraged a Roth IRA and later a 401k when I had the option. The n top of some of the reasoning from others, consider the future income in the prime of his career. He may not be able to contribute directly at someone due to exceeding the income limit for Roth and will be forced to contribute to a traditional (Back door methods can still be used).
Regarding an emergency fund I’d have one but a very minor one to have post high school for emergencies like a car tow and any minor incidents where having money in his checking & savings would be used. Note this wouldn’t account for support you would be able to provide but that may be more of a hassle if he went to college a non-insignificant number of hours away. Plus it practices good habits similar to building credit and learning to pay off a credit card.
Hope this helps
Regarding an emergency fund I’d have one but a very minor one to have post high school for emergencies like a car tow and any minor incidents where having money in his checking & savings would be used. Note this wouldn’t account for support you would be able to provide but that may be more of a hassle if he went to college a non-insignificant number of hours away. Plus it practices good habits similar to building credit and learning to pay off a credit card.
Hope this helps
Statistics: Posted by Backdrop0492 — Sat Jun 15, 2024 4:59 am — Replies 29 — Views 1360