To give an 18 year old 30k

[WhenSheWasBadSheWasAnOrange]

I have a huge disagreement with dh. We have set up a savings account for dd and plan to save £80-90 pounds a month for her until she is 18 (she is 19 months old now).

I have found a cash isa at a really good interest rate but the money would be in her name, we would not be able to access it until she is eighteen. Once she is eighteen the money would be hers and we would have no control over it.

With interest this money would probably add up to over £30,000. It would be there to help her get through uni, or money for a car or deposit on a house.

Dh thinks I am mad leaving dd this amount of cash when she is eighteen. He thinks there is a huge risk she will blow it on amazing holidays or a very expensive car (or god forbid drugs).

I am being stupid saving this amount of cash for dd?

We are saving for our DDs in trust accounts where I am effectively a joint account holder. Depending on what they are like when they are soon to be 18, we plan to move the money elsewhere if they look like squandering it, or otherwise letting them use it for uni fees. They will know it is for their education.

If they choose not to go to uni, it will be for something else like a deposit on a house etc.

Precisely because of your DH's reasoning, we have not added to the CTF money DD1 was given by the govt. DD2 was given a cheque for the same amount by family when she was born, so we opened an equivalent for her. They can each have their £250 plus interest to spend as they wish for their 18th birthday.

Wht don't you speak to an accountant? There are far more, and often better, ways to invest than high street products.

We have a trust for each DC with money from family in, they have been in bonds which have given a tax rebate each year which we put in ISAs when they were younger and gave them once they were uni age to give them a taste of managing money (rather than managing student debt!) The trustees can decide the age when they get it.

Can't believe how many people have blown savings or inheritance. Dickish behaviour even if you ARE 18.

I got 10k when I was 18. It's still there and more. I add to it, I 'borrow' from it. I would feel like a right twat of I'd spent my parents hard earns cash on booze.

Ps £90 a month for 18 years needs an IR of approx 4.5%. Seems quite high.

I'm just you don't trust your own DCs.

No way at 16, 18, or 20 would I have blown the money on anything other than university accommodation and a couple of cheap holidays.

I married at 22 and I would have blown it on the deposit for a house in a nicer area than the one we could afford.

Given DH and I are still together 22 years later I think that's allowed.

My feeling is that saving it in your own name is the way to go too - though I am not a financial advisor I hasten to add.
The issue for me would be that none of us know what the future will bring and while you may be in a fortunate position now to be able to save this money for your child, things change and that may not always be the case.
I can hear people jumping up and shouting "but it's the child's money" and yes - that would be the intention.
But, if you needed the money to provide food and keep a roof over your child's head, then, for me, that would be the best use rather than tuition fees for University (she may not want to go to University, a car is not essential and she can always rent if need be).

saving it in your own name could be construed as money laundering.

jut sayin'

I would not have blown it at 18 and neither would my DCs (now 18 and 20.5).

Both my DCs have Children's Bonus Bonds taken out (in their names) between 0 and 10 yo which will be worth about £2750 at 21. They have had direct access since 16 (because that's what NS&I do) but have never wanted to use it. DD intends to use it for driving lessons when she is 21 (and graduates). DS doesn't know but has no intention of touching it until final maturity at 21.

I have talked about what would happen if I were to die - they know that they'd each get £1500pcm until they graduate plus the equity in the house. They'd be sensible and there are family members that they'd expect to take advice from.

I think it helps if the DC know all the time that the money is there and what it is for and perhaps if they grow up poor and not entitled...

I 'only' blew £1k when I was 20.

For that reason all my DC's savings are in trust funds they know nothing about. The daft government accounts that let them have the money at 18 are asking for trouble so I've never added to them.

My kids will get whatever money there is in their trust funds when they are in their early / mid 20's and less likely to waste it.

Why the sad face Startailor? It's not about trust, it's knowing that most 18 year olds don't handle huge windfalls in the most sensible fashion, I think lots of anecdoctes on here confirm that. It doesn't mean they won't when they're a few years older.

Learning financial sense is all part of growing up. For most people anyway, some people never learn to manage their finances.

YANBU.

When I was 18 I inherited 100k from my grandfather. Except I didn't, because he gifted it to my sister and I in order to avoid death duties. You need to be in possession of it for a certain period (nine years I think) prior to the giftee's death and because my grandpa was in remission from cancer at the time, he wanted to do it then and there and hope he lived another nine years (which he has, very happily!).

My grandparents are well off (obviously) but my immediate family (mum, dad) are not. That amount of money was mind-blowing and life-changing, as I'm sure it would be to most people. I put it into a long term savings bond and didn't access it for four years at which time I purchased a property with a small mortgage. I didn't blow it, any of it. None of it. Not a penny. I kep three grand back to buy furniture and white goods, that was it.

If you believe that you can and will raise your child to value and understand money then I see no reason at all why you shouldn't do this. The assumption that she'll blow it on nail varnish and parties is insulting. However, what you need to be aware of is once you've given it to her it becomes her money to do with as she sees fit... And if she disappoints you with regards to how she chooses to spend it then that's a risk you'll have to take.

BTW, unless you have loads of other money, it is completely bonkers to pay tuition fees rather than taking a cheap, government-backed, write-off-able-unless-you-reach-the-qualifying-salary-before-30-years loan.

I wouldnt if I were you.Dd1 has savings in the child trust fund.Shes 4 and has 1500 we have saved now.I was saving it all in there until someone on here said what if she goes mad at 18 and blows it all?

So now I am putting 20 a month in an isa and 10 in the child trust fund.One she can have at 18 for uni/car/getting pissed and the other I will give her for a flat deposit whenever she is ready.

My cousin got left 100k at the age of 18. A rich grandad. It changed him from being a studious, sensible lad to being a party loving cocaine addict. He spent the lot in 3 years. His best mate died of a drugs overdose during that time and we weren't sure whether he would survive. He lived on champagne and cocaine and one night stands.
He turned his life around but it was close.

Also I do think realistically you cant guarntee raising a money savvyvchild.I had a mortgage at 18 that I began saving a deposit for from 14, whereas my brother lets a fiver burn a hole in his pocket.Best to be on safe side!

nickel how exactly?????????????????????????

We have one this sort of thing for our DC's and have no concerns about them wasting it. Eldest is 20 and not wasting any money as he needs it for Uni etc. I guess they would know that if they did waste it we wouldn't help them in the future. Tax wise it is an effective way to save.

I had a similar gift when I was about 25, it was very, very, useful. My DH and I both worked and could afford a deposit, mortgage, house etc but to have extra cash made everything much better.

I inherited 18k when I was 14. My father (a bank manager at the time) took me to see a financial advisor who scared the shit out of me made me realise what a Serious Thing it was. I was involved in the decision how to invest it, it was explained to me that the interest earned each month was my pocket money and that I could choose to take the whole lot, or restrict my 'take home' and automatically put the rest of the interest onto the capital. With hindsight, it was probably just a mate of my Dad's, and they probably wouldn't have let me invest stupidly, but it so worked. It was always referred to as 'the investment', and although I blew my other (minuscule) savings at university, it remained in tact. By the time I bought my house at 21, I had 30k.

Have you thought about saving through premium bonds OP? They are in your name but with your child as the named recipient. There is no interest, but the money is safe and your bonds are entered into a prize draw every month, with a chance to win anything from £25 to a million every month. It's sort of like a savings lottery. Obviously the more bonds you buy the better your chances of winning. You can buy them in £100 blocks whenever you want, up to a maximum holding of £30k. Your child will not automatically get these at 18, they will still be in your control to give some at a time whenever you want. We generally win between £25 and £75 a month, some months nothing then other months £100, if that makes sense. The prizes are broken down on the website.

My neighbour's daughter spent her inheritance on drink & then rehab.

Other problem is that if they use it for a deposit will they be as motivated to choose a sensible career & work hard or will the cushion mean they take life easy. Both my cousins inherited houses & neither got on with their careers, my db & I got nothing & have done far better, settled, partners etc.

you could put the money in a pension - that way it wouldn't be touched and would possibly give them a lot more at 65

We have put £100/month into a CTF (yeah, I know probably stupid) for DS so he will have a pretty hefty amount when he reaches 18 as well. We plan to give him a big incentive to reinvest - something along the lines of continuing to save for him if he reinvests the vast majority of it. Intend to include him in financial planning meetings in the year or so leading up to his 18th birthday.

Bear in mind that due to inflation, in 16 or 17 years' time, £30k probably won't be worth anything like it is now - it might pay for one year's university fees, or a small car. It probably wouldn't make a dent in the deposit needed to buy a house. Less than 16 years ago, you could buy a whole house for £30k in some areas (we bought one for £17.5k in 1997). Maybe it would pay for a gap year?

Really you just have to try to bring up your DCs with a responsible attitude to money - possibly easier said than done.

i still want to know how im money laundering

You're not, Sock.

Why do people make such idiotic statements?!?