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?

I had one of these types of accounts with my mum and my brothers. At young ages it was mrs x for miss x and brothers. Then it became co signatories - basically no money could be got at without both signatures, mum and mine, or mum and bro on theirs. Worked really well. As did the fact that mum let small amounts out - laptops/car insurance etc.

The other thing is - my mum always commented on the differences between her children, aged 18 my eldest bro and I wud still have spent sensibly and indeed did! He used some for fees, mine for a house aged 20, whereas my mum openly admits my middle bro wud have went buck mad...holidays, designer clothes etc

So even tho ur baby is 18months it does depend on the child xx

Anony
How about you have a man ringing you saying 'look what I can do that Mum can't' and then encouraging you to spend it.
I wish I hadn't posted now, I wanted to make the point that 18 is probably not a good age, I didn't want to have to justify well founded complaints to you or anybody else.
However, next time my son is helping me lift my dh after an awkward fall, or is cooking some dinner to give me a break I'll be sure to tell him what an entitled twat you all think he is.
He has more humility in his little finger than most of you put together.

im very glad about that now i dont have to run away to cuba

I was given £18,000 when I was 18, and another £25,000 when I was 25 - I was also introduced to a financial advisor - the same financial advisor my parents used. I didn't 'blow' any of it - however, I did spend a fair bit of it travelling (on a shoestring, I might add), doing language courses and internships abroad etc. This was important to me, as I figured that wouldn't have the time to do it once I started work and no longer had 4 month long summer holidays. But I was very aware of mainly only spending the interest, and also had a job throughout university in order to increase my income.

I liked being able to make my own decisions, aged 18, and not have to ask my parents if I could go to Mexico/ the Middle East/ wherever else in the holidays. And actually, I would say that being given that some of money actually taught me how to manage money much more efficiently than if I hadn't had it.
Once I graduated, and got a good job (partly due to having been able to travel as much as I did, and do the internships etc. abroad) I would add money to my investments when I could.

When I got engaged, DH and I were able to buy a flat together. We still save money, and have set up trusts for both children.
My point is that not everybody blows money given to them at 18 on coke and champagne.

It could be £30K up her nose if you give ti to her.

We are investing for both our daughters for when they are 18. They have both known about this for ages (they are 11 and 12 now) and every so often I let them know how much we currently have for them. I think it's really important to educate children about money, and we have explained that if they 'blow' the money they won't be getting any more. It will be theirs to spend as they wish but we talk about paying for university/car/deposit for house.

I think it's a gradual process of education. When my eldest started secondary school she was given an allowance of £5 a week and this covers going out with friends and the occasional school meal. If she doesn't want to spend it on school meals then she has to make her own lunch. As she gets older her allowance will increase and it will need to cover more things so that she gets an idea of budgeting. I have also talked to her this summer about how much I earn (showing her my payslip) and where our money goes.

Our financial advisor suggested setting up a pension fund - similar investment on your behalf (as in, how much you put in etc) but it doesn't come to fruition until your child is pension age. I can't remember what it's called, but apparently it's the latest thing. (sorry, haven't read entire thread, so maybe someone else has already suggested)

I think it's a fantastic idea. With how things are these days, it's hard enough to secure your future. Imagine how much more difficult things could be for the next generation? What a great legacy to leave your child - a secure, financial old age when they might have their own children/grandchildren to want to support. Plus, stops the whole risk of an 18 yr old blowing it! pretty sure I would have totally wasted any money if I'd have received any!

I wouldn't have blown £30k when I was 18. By the time I was 18 I had good financial sense. I think what someone will or won't do with money has much more to do with their attitude towards it and level of education about it. She's so young now, you've got plenty of time to bring up a young woman with lots of financial good sense and the ability to differentiate between a sum of money for having fun with and a sum to save/buy a house with etc.

I'm loving the contrast in replies here with people saying 'no, I wouldn't give my son/daughter £x at 18/21' with other AIBUs I've seen from people in their twenties where parents are refusing to pass over control of accounts/money that's been promised to them and those posters are being told 'don't accept anything from them, move away and deal with it yourself'.

One of my friends inherited living expenses at the age of 18 as long as she stayed in education. I always thought that was a brilliant way of doing it - it was doled out (fairly generously) but she had to study to get it.

It might cost more to administer it like that but I suspect it would be worth it. I'm looking into doing it for DS

We are saving a similar amount for dd. (Is it the child benefit money - if so it is exactly the same.) Currently it is in an account under both our names (but I think I have to sign to get it out - not least because dd can't write yet!)

It's a regular saver so we are getting pretty good interest plus no tax as it is for the benefit of dd.

The plan is to give it her when she is 18 (when hopefully it will pay a year or two of university fees if she goes) but I'm not worrying too much now. I guess if she turns out to be super talented at a sport or something and needs really expensive coaching the it could go on that but I'd hope it would go on university or the start of a house deposit.

Not sure if I'll transfer it fully into her name at some point. Although not because of worry about her but because as a child I saved my pocket money in the Halifax. Originally the account was in both mine and my mum's name. Then we changed it to just mine. They de-mutualised when I was 17. Had it stayed in my mum's name I would have got about £800 worth of shares. (As I would if I had been 92 sodding days older and so 18.) I was not happy.

I'd have been sensible with the money if I'd got it. Too sensible probably.

Giving that amount of money to an 18 year old for them to spend as they wish could turn even the most sensible 18 year old head, and could have far-reaching consequences. My sisters and I each inherited a sum of money about 20 years ago. Me and my younger sister kept ours in longer-term bonds and she spent hers on a flat deposit, and mine went on a Masters and flat deposit. Other sister, though, saw it as her money to spend from the very start and couldn't rest until she had full access to it and couldn't abide the thought of making the slightest economy while she had a large sum of money in the bank. 20 years later me and my younger sister are happily ensconced in our properties while my elder sister is renting in her 40s with no assets to her name. Your daughter may well be very sensible but it's a big ask of an 18 year old to be that sensible just at the time when she is finding her independence and finding that there are lots of expensive things that one can spend money on.

We save £100 a month for DD and have done since she was born, she is now 15 months. It is currently in a 3 year fixed rate at just over 4% and I intend to keep moving the money to get the best rate. If it keeps earning 4% then it would be just over £31k when she turns 18 but I suspect over time the amount will increase that we put in each month so it will be even more than that. I have no idea at the moment when she will get the money or how she will get it but I am just happy to be saving it for her.

This calculator is a pretty handy tool for working out what you can save over time.

I have 3 dc aged 27, 23 and 18. They have all had the same financial updragging and all have totally different attitudes to money. It is not all about the financial education you give them, it is AT LEAST 50% the character of the child.
I would not give them access to large amounts at 18.

I'm amazed that only two posters have mentioned have mentioned inflation. People keep talking about £30,000 as if it would be worth what it is now but in reality will be worth about £5,000 in real terms. Saving cash over next 16 years will be pretty pointless as the government will be forced to keep interest rates below the rate of inflation so it doesn't default on its debt. you should either:

1. save up a deposit to purchase a property when prices start to rise again.
2. Invest in shares in companies in large companies that get income from abroad and will still be there in 15 years time.

Depends on your DD. A relative left me a few thousand (less than 5) which i got at 18. I spent it on some cosmetic ( but necessary imo) work as i was no longer able to have said work done on the NHS.

My mum was horrified. I am now 25. It was the best money i have ever spent.

Maybe give her half/some at 18 then a further amount at 21 ?

I think it's worth remembering, our DCs generation will have suddenly have £10/20k bills to pay at 18 - if they go to uni. Yes they can borrow the money, but we are trusting them to borrow the money and hten pay their uni fees with that, what's wrong with saying "there's a savings account for your degree fees" making it clear that's what it's for?

I don't think most would have considered spending it on something else at that age, unless they aren't going to uni, then it's going to get wasted.

But yes, bp300 is right, don't expect it to be like getting £30k now.

Had a cousin with a similar thing. She spent it within six months and ended up pregnant with a drug abuser dp.

Think it's better, despite less advantageous tax rates etc, to put it in your name.

Um can I just say that some of the people who did crazy things with stacks of money at 18 would have done them without money too.

TheDoctrineofEnnis is right - I know people who did shit like that with the sudden availability of credit cards, loans and overdrafts you get at 18, at least if it's with actual cash, then once it's gone it's gone, rather than bad debts that can distroy chances of certain careers...

Yeah, but 30, 40, 50 grand is going to enable you to do a lot more crazy shit than if you were living on minimum wage.

I have a bit of savings from inheritances and money my parents saved for my sister and I. Even when dad handed over the responsibility for looking for good interest rates and generally looking after it when I was 20, I was never tempted to go and spunk it all on mulberry handbags or naice ham. This is because a) I knew he would be pagin' Mr ragin' if he knew I'd touched it, and b) it is, and always has been, referred to as the house/wedding fund. No money, no help. I'm a very cautious person though, you don't know how your little DD will turn out.

My grandparents saved in my name and simply didn't tell me. I was handed a very healthy bank book when my partying days were over and I was about to decorate my first house :)

Easy-come, easy-go.
YABU

I think the posters saying 'she will spunk it up the wall' don't realise how tough 18 year olds will have it in 18 years time. This kind of money will make uni a possibility for the OP's dd. Frankly I'd have had the good sense to spend it on my education (or put towards those costs, as it will be in 20 years time, ie probably cost as much as or more to get through uni) at that age, or save towards a house. At 18 you are an adult and old enough to know the value of money IMO.

Presumably the OP wants to set up in DD's name as the interest rate is better, so saving in her own name is not an option. I'd personally save in DC's name but bring them up to understand exactly what the money is for.

DS is lucky enough to be set to inherit a substantial sum of money from his paternal grandmother. The money will be in a trust until he is 25, with the proviso that it can be released early under certain conditions - if it to be used for education, or to buy a house, or a small amount of the total for serious overseas travel.

I would not be comfortable with him having free access to such a large sum of money at 18. However, if at that age, he had a plan (uni, training, travel etc) we could discuss this with him and work out how best the money could be used and/or further invested.

DS is not aware of this money, and I'm keen to keep it that way until he's old enough.