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Do we HAVE to save for our children's future? My parents didn't for me.(34 Posts)
I feel a bit guilty for not saving for my children's future, although they're only 23 months and 4.7. Do we have to? My parents didn't save anything for me, but then again I was in the days of free university courses. Has the university tuition fees situation changed everything? Or is the ridiculous cost of housing as well?
I would like to put by £50 a month each for them. I could easily make that out of what the older child's dad gives in CSA, but for the younger one, his dad says let's not bother about saving for him till we're settled in a house etc (just started saving for a deposit). So should I make up the younger one's £50 by myself or not save for the older one either until the younger one's dad is willing to chip in?
We've not got enough to save. We barely break even each month
If you save for your kids (eg. Bonds, accounts in their name), you have to sign a declaration to say that the savings are completely theirs for tax purposes.
I am in favour of making the savings clearly identifiable as theirs. I am vague about the exact amount, when asked I agreed about £1000 total but in fact it is more - in the form of savings, bonds, shares. One of the building societies (might be true of all) start sending info to kids about their accounts @ 12 & require a signature at this age too!
Youngest has a govt Trust Fund & we started saving for both DCs at the same time; eldest has more complex investments & is running £500 behind so wandering what to do about that.
I am in the camp which is to save specifically for the DCs. I am more worried about the stealth boasting that would go on if they knew... Goodness, one of the cheeky DCs came back from school with information about other parents' salaries and asked me what I earned.
The problem is money comes & money goes, just a little a month could make a big difference in the future, especially if something comes up and needs to be covered from income - my parents helped a little when I was a young adult but we're older parents ourselves & wonder about being in full employment before retirement just when our DCs might need us. Pensions are sorted & now ready to start a buffer fund for ourselves.
Me and DH talked about this and felt we needed to put money away. We have said however its for us to decide what it goes on and he won't know about it.
Oh yes and not to mention many of the jobs the parents started out in have been exported off to China so that the same parents can buy cheap DVD players and suchlike in the shops. Starting out in life is harder now than its been for anyone born post WWII.
(and no availability of iPods doesn't negate the lack of availability of jobs and housing, and things that are actually important in life).
Social Mobility is lower than it has been in 50 years, house prices are triple what they were in the 90s, University costs £50k rather than being free AND is required for almost any job with a future, decent pension schemes are closed to new entrants - many parents* have had a fucking easy ride and their kids won't have half the opportunities they did. Too bloody right these parents should be helping their kids out with money.
*Younger parents (under 30) may suffer from some of these issues themselves.
There's no expectation I don't think. My parents didn't save for me, I have no problem with that. They'll be comfortable in their dotage and I can't fault them for putting their spare cash into their pension.
I do put money aside in trusts for the kids, but not for anything specific and I don't suppose it will be a life-changing sum when they cash them in.
Notmadeofrib I agree 100%! A finance writer for the Telegrsph said the best gift a parent can give a child is to ensure that they - the parent - is financially independent and solvent. If you have money left over after that, fair enough.
I have child benefit paid into a savings ac and top it up with any birthday/xmas money he receives. Ac in my name incase of emergencies and I can access it but no need so far. Have approx £5k for him at moment do hope to keep building on that.
My 18mo DD has a normal bank account and if she gets any money for Xmas etc (or MIL's bingo winnings!) it goes straight in there. I do worry that I ought to have some more formal arrangement - ISTR my parents had life insurance for me and DB or something? I haven't a clue about any of that or if you can still do it.
She also has a £2 tin that we save any £2 coins we get, ostensibly towards a holiday somewhere far-flung when she's old enough to appreciate it.
We have a baby on the way and I don't know how it's all going to be split. I guess the £2 tin becomes 'theirs', and I match the two bank accounts on handover day. God knows!
I worry that many people prioritise saving for their kids over saving for themselves. I wonder how many of you saving for your kids have a decent amount of pension capital? One of the best gifts you can give your kids is not having to worry about you in your old age.
We are not saving for their future. Our money goes I their educational and other needs now - there's none left over.
DS has several bank accounts and a pension. He isn't even 2 yet.
The savings might be for uni, for a house, or just for driving lessons, which are all astronomically expensive now and will only get worse over time. We don't have a big income but prioritise savings for all of us to cover emergencies and big bills in the future as we know our income will never be massive!
With what we and my pils put into their CTF accounts it works out at £75 each per month.
We hope that by the time the dc are 18 they will have a pot of cash to use for study/travel etc
No idea how much they will have by then...it's 8 years aWay for ds1.
if you have a spare £50 a month I would save it in an account in your name. I'd keep that separate from general 'saving for the house deposit' money with your DP or family money (perhaps open another account and tell yourself you can't take anything out of it).
Once your DCs get to 18, you should have a decent pot of money, you can then give half of that to your DC1 if they are going to uni, or if not, hold on to it and give it to them as and when they need it. however if neither particuarly need it, then you can keep hold of it and either give it as gifts when they are in late 20s, or use it towards your own retirement...
I agree with you there CC. I think it's a stage many youngsters go through in their late teens / early twenties, however they've been brought up - it's about what's important to you at that time in your life.
Re your OP, of course you are not obliged to save for any of your children, but my thinking is, if you have the money, then it seems a sensible thing to do. Of course, if you have money at the end of the month, then you could use it in other ways. So you might overpay your mortgage with it, then, when the dc get to University / buying first home / wanting to learn to drive / wedding / whatever you might think of saving for, you will have paid off your mortgage early and then have more cash available every month to help them at the time.
It's difficult when you have 2 children receiving different amounts from different Dads of course. My parents died, having set up a small savings bond for each of their grandchildren except the youngest (my dc3), so that was an easy decision for us to invest the equivelant amount of money for her when we sold their house and received some money in their will. Bit of a no brainer, as we knew they would have treated all grandchildren equally, it's just she was born too close to them dying. Much more difficult to know what's "fair" when there are 2 different Dads to take account of.
I don't think it makes you an idiot to blow a bunch of cash that someone gives you when you're 18- more 'normal'. The same 18 year olds live to regret it and openly say so later on. Have you not blown cash in your late teens and twenties that you wish you'd saved for a house or something? Teenagers are 'spontaneous' shall we say, right down to their different brains and the temptation to blow it on going out, holidays, clothes and dare I say it recreational drugs will be massive, for a lot of young people. That's why i've gradually shied away form contributing any more to DDs child trust fund. I don't assume my DC will grow up to blow their cash and will teach them carefully about money management, but I think the possibility is still there with even the best parental preparation.
My late grandmother left DS a sum of money back in 2002 when he was a toddler. I invested it for him and, now he's older, he takes an active interest in how the investment is doing and it's led to some interesting conversations. Not least that my grandmother - a highly intelligent woman born at the wrong time in the wrong social class - valued education more highly than anything else and would be thrilled if it got him through college. So it has become 'uni money'.. expectations duly set. I'm always rather dismayed when parents assume that their children will grow up to be idiots that will blow the cash they are given on crap. You have 18 years to influence their thinking.. use it wisely.
Dancing and Notinmylife: great ideas!
Cogito- yes I suppose having the real money to deal with will make those lessons in interest, savings etc a lot more immediate.
" I suppose it would be quite prudent not to say 'we're saving X for you and you can have it when you're 21, or whenever' as then they will be making all possible plans to save for themselves "
Keeping them igonorant is one way of doing it. Another way is to use the prospect of a pot of cash to have some grown-up conversations about interest, investments, savings, life expectations, money-management and so forth so that they have a chance of being financially aware and responsible when they hit adulthood. Personally, I've always favoured the latter.
If I were you I would start saving for the older child now, with a view to saving the same amount for the younger child when they get the the age of the oldest now. So you aren't being unfair by saving for one and not the other now, they will both end up getting the same.
I don't see why you need to separate monies with dc1 and dc2. Have one account for savings and put in the contribution from csa into it and top up with whatever you can afford. I would assume you don't split everyday costs, trips out, good etc evenly, you just get them what they need rather than subtracting dc1s from the csa.
That way they both get equal and you can vary payment amounts without worrying about matching. Then split it in adult hood for the dcs
I think it very much depends on circumstances
Pop £20 each month into their account for each child if you possibly can
If you carnt don't!
My parents couldn't afford to save for themselves never mind DSis and I.
DH and I do save for our four DC, only £15 a month each, which seems nothing compared to others. I think we need to up our game a bit.
I dont think you are morally obliged to save any specific amount.
The CSA thing, if there is a surplus then perhaps using that for day trips to educational places or towards "extras" she wouldnt have otherwise is still benefitting her but not simy sticking it in savings.
There are no hard rules. Its what is affordable and appropriate to your circumstance.
DD1 got £500 in the trust fund. It will be years before I could afford to make that up for DD2. If I can I will. If I cant I wont.
I opened bank accounts for my DGC the day each of them was born.
It's a bit hard to calculate if they will all receive the same amount when they are 18 because you have to take into account the cost of living and inflation.
Also I never buy expensive birthday or Christmas presents for them. just something small and then some cash . It is left up to the parents discretion if the money is saved or spent. At the moment it is being saved towards an overseas trip later in the year.
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