A. If you haven’t already covered it, he needs to learn to utilize a debit card and reconcile a checking account. Set the account up in your name and his, so you can follow what’s going on in the account. If there’s an issue, this gives you easy access so that a minor incident doesn’t become a huge problem.

Right now, the best way for him to learn is to make educated, informed decisions on his own and to stand on his own two feet. You’re there for guidance at this point — not control. I’d let him use a debit card, cash, and have a few simple envelopes for expenses. Also, he needs to report back to you monthly what’s going on with the budget. What I’m talking about here isn’t control; it’s a simple, regular review and coaching session on finances. This is an exciting time in your lives. You’ve laid a foundation, and it’s time for this little one to spread his wings a bit. Together, you can make sure he’s learning and living the way a young man should!

Where do I put the money?

Q. I have a savings account for my two-year old that has $5,000 in it, and about half of that is in gold. I’m going to save for his college separately, and give this to him to help start his life after school. Is there a better place to put this other than a traditional savings account?

A. First of all, you should not invest in gold. Gold is a very volatile, very dangerous investment. I don’t have a dime invested in gold, and I would strongly suggest that you not invest in it, either. If you take a look at the life-long track record on gold it will scare you to death.

For the time being, you can leave it all in a traditional savings account. But if he’s not going to use it for many, many years you could move it into a conservative mutual fund. In fact, you started when he was at such young age, a nice, conservative mutual fund might be a really good idea.

When he gets a little older, he can start adding to it himself from the money he makes from odd jobs and chores and such. After 15 years or so, thanks to your foresight and his contributions, he’ll probably wind up with a pretty nice chunk of cash.