Meet Fabric: The Easy (and Gimmick-Free) Way I’m Investing in My Kids’ Future

In partnership with Fabric by Gerber Life. Editor’s Note: We only select and work with partners that meet our quality standards, so you can rest assured we only endorse products we believe in.

Every parent knows that worrying is just part of being a parent… and worrying about my kids’ financial future is no exception. After we got over the hump of becoming parents, we realized that one of the first and best gifts we could give our boys was to set them up financially. It was important for us to take steps to budget and set aside funds so that we could give them new experiences and encourage them to be curious and try new things. But sorting through the various options, we quickly learned, was convoluting and confusing. Thankfully, Fabric by Gerber Life has made it easy with their UGMA Investment Accounts for Kids. For as little as $1/day, there’s a reason parents all over are flocking to this option to help plan for their babies’ financial future.

We like

  • Low monthly fees, including a flat fee for parents of multiple children
  • Invested funds can be used for more than educational expenses
  • Much simpler than setting up a trust
  • Penalty-free withdrawals allowed while the child is a minor*
  • Family and loved ones can contribute to the child’s fund
  • Funds are SIPC insured up to $500,000
  • Tax advantages for parents*

We don't like

  • Only offered for children under the age of 15
  • Funds in a UGMA accounts could impact the amount of Federal Student Loan Financial Aid the beneficiary would qualify for in the future

*Withdrawals are not penalized when the funds are used for something that directly benefits the child.

Fabric makes investing simple

Investing 101

While I’m not a finance person, I do really like to know what I’m talking about when it comes to money. There are quite a few ways parents can plan for their kids’ futures. From savings accounts to trusts and more, the options can feel overwhelming. We’ll just focus on two of the more popular types today: UGMA (Uniform Gift to Minors Act) accounts and 529 plans. 

I love how flexible the UGMA account is. Credit: Fabric

A UGMA account is a type of custodial account, so it is specifically designed for parents to plan for their child's future expenses such as field trips and dance lessons when they're young and their first car or college expenses when they're older. On the other hand, a 529 plan is a savings plan “designed to help pay for education.” While those can sound alike and are both tax-efficient ways to save*, they differ in what they can be used for. 529 plans unfortunately restrict you to paying for “qualified expenses,” namely education. In our day and age, where college is becoming less and less necessary for many jobs, this option makes me a little nervous. I’d rather have flexibility, which the UGMA accounts offer, or frankly both accounts to plan for different things.

In fact, UGMA accounts with Fabric are so flexible that you can even withdraw from them while your child is a minor – without penalty – so long as the funds are used in a way to directly benefit the child. For example, tuition for high school, art classes, sports equipment… you name it. And, should your child elect to go to college, the account is then usable for those expenses, as well. It is worth noting that UGMA accounts are the property of your child, so when your child reaches a certain age (between 18-21, which varies by state), the account becomes theirs to do with what they please. I’ll certainly encourage my children to hold onto it for things like their weddings, down payments on homes, and other big “life” things. 

The 10-Minute (Or Less) Test

Signing up for the account was super fast. Fabric promised a quick sign-up – and it delivered – and I set my child’s account up in less than 10 minutes. A form walked me step by step through simple questions that I knew the answers to (without having to rummage through my file cabinet). I answered some questions about my goals to select my portfolio, I answered some personal questions about my sons and I, and then I simply added funding.

This is also one of my favorite parts about using Fabric – the amount of funding is really up to you. Fabric’s contribution minimum is just $20/month, putting you in the drivers’ seat. I noticed there is even a little slider helping you decide how much to put in each month to reach a certain target over time. I loved this as a visual person – and it’s just another way the brand is making investing simpler. Plus, the fees are also incredibly low at just $3/account for one account and $5/month for multiple accounts. Yup, even if you have 17 kids (bless you), you’ll pay just $5/month for all of their UGMA accounts.

My recommended portfolio based on a few questions and goals I had entered. Credit: Fabric**

Is This Investment Worth Your Investment?

We’ve long been a fan of the way Fabric by Gerber Life is making parenting easier with their simple plans with kids in mind – and this UGMA account offering is no exception. I love how easy it is to get a head start on my kids’ future. We’ll even be asking grandparents for gifts to this account, as opposed to 20 more toys on birthdays and Christmas every year. I think they’ll be inclined to give – after all, this account is meant to help them achieve their dreams. Even at just $1/day, your child’s account can turn into $10,000 over the course of 18 years†. With a quick start up, flexibility in use, and a trusted brand, this one’s a no-brainer, parents. 

This June, Fabric wants to help you jumpstart your kids' financial future. So for a limited time, if you open a kids' investment account in 25 minutes (or less), they are giving you a bonus $25.* Click here to start investing in your kids today.

*Terms and conditions apply. Visit https://hello.meetfabric.com/ugma-countdown-promo for more details.

Fabric by Gerber Life is a brand of Western & Southern Financial Group, Inc. Western & Southern Financial Group, Inc. is the parent company of Fort Washington Investment Advisors, Inc. 

Investment advisory services tied to the Fabric by Gerber Life platform are provided by Fort Washington Investment Advisors, Inc., an SEC registered investment adviser. Registration as an investment advisor does not imply any level of skill or training. Custody, brokerage, and clearing services are provided by Apex Clearing Corporation, a registered broker-dealer and member FINRA/SIPC. As a member of the Securities Investor Protection Corporation (“SIPC”), funds are available to meet customer claims up to $500,000, including a maximum of $250,000 for cash claims. For additional information regarding SIPC coverage, including a brochure, contact SIPC at (202) 371‐8300 or visit www.sipc.org. Please consider your objectives before opening an investment account. Investments in securities involve the risk of loss. A diversified portfolio does not ensure a profit or protect against a loss.

*Fabric by Gerber Life and its affiliates do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

**Portfolio allocation is subject to change. This is for illustrative purposes only and should not be construed as investment advice.

†to see illustrative value, interact with the slider here.

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