Here's part 4 of an article from Kiplinger's on how to make the most of a year-end bonus:
Save for your kid’s college years, either through a 529 state college-savings plan, a Coverdell education savings account or a custodial account. A single contribution of $3,000 now for a newborn could grow to about $12,000 by the time he or she starts college if your returns average 8% per year.
Open a Roth IRA for your child if he or she has earned income in 2004.
Start a charitable fund.
We have Coverdells for both kids and are also saving in a taxable account for college (it gives us more flexibility and I haven't yet figured out the confusing world of 529s). Our kids haven't earned any income, so idea #2 isn't for us. As far as the last one is concerned, we already have more than enough charities we support -- we don't need to hold our money somewhere while we decide where to give it.
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