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AIBU?

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Original poster

To use my son's savings to pay off debt?

140 replies

Bibs2014 · 12/04/2017 22:18

What would you do?

We are £17,000 in debt due to failed IVF Sad.

DS has £1200 in the bank (not including interest) as I started saving £100 a month for him last year in a high interest account that I couldn't touch for a year.

It's now matured. Should I take the money out and clear some of the debt? It's all on 0% credit card and is manageable (at the moment).

The reason I'm thinking we should is because we want to move house so it looks better to have less debt.

Reason against is that even though I could save the money up again in the future, you never really do, do you? I already started late as I wanted to start saving from his birth and didn't start till he was 16 months so I already 'owe' him £1600 😂

OP posts:
WannaBe · 13/04/2017 08:35

"For that amount of debt £1200 really isn't much is it?" well, it's about 8% of the total debt so hardly a drop in the ocean either?

People are far too sentimental about money saved for a two year old which he doesn't even know exists.

It's not his money it's money put aside for when he's eighteen presumably but reality is that now the OP can no longer afford to have done that so she needs the money and if in the future she can afford to she can save for him then.

Wouldn't even give too much thought to paying it back tbh.

But I wouldn't move house either.

tigermoll · 13/04/2017 08:38

To the people saying "it's ok for the OP to use the money she gave to her child's saving account because a)debt comes first, b) kids don't have a" right " to savings anyway and c) he won't know any different " I'm wondering if you would feel the same in this situation:

OP's child was given a gift of £1500 by a relative on the occasion of their birth. The relative said explicitly that the money was to be saved for DC'S future. A few years later, the relative says "Actually, I need that money to pay debts I have run up. Can I have it back please? After all, my priority is now to pay what I owe, not save for your child's future."

If you are ok with OP using the money, it seems like you consider that the £1500 never really left her possession -- it was always her money, regardless of whose name it was saved under. Do you feel that way about money given to the child by someone other than their parents?

BarbaraofSeville · 13/04/2017 08:39

If the debt is at 0% until 2020 and you are on track to pay it off, I'd just keep paying it at your current rate and leave DSs savings alone.

If something changes where you need the money (job loss, getting to the end of the 0% deal and being unable to get another one) then reconsider, but I can't see being in £17k or £15.8k debt making much difference to moving unless you are right on the borderline for affordability for a mortgage for example.

Then DS still has his £1200 or it is still there for an emergency fund if you need it.

Starlight2345 · 13/04/2017 08:47

based on the fact it is interest free till 2020..I would start paying the £100 a month to your DC off the debt instead but not use the £1,200. I also would not be considering moving house at this time either unless you have to for work purposes.

Mulberry72 · 13/04/2017 08:48

I would leave the £1200 in the bank, but start using the £100 a month to pay off the debt.

happypoobum · 13/04/2017 08:48

Firstly Bibs

YANBU - I agree with PP - use the money to pay off a chunk of the debt and then divert the £100 a month to the debt until it is paid off.

Best of luck with the house move.

KidLorneRoll · 13/04/2017 08:51

If the debt is interest free, and you are managing to keep up with the min repayments then stick any extra money in a savings account, including the 1200. Rates are pitiful at the moment but something is better than nothing. And then when you come to pay off the debt, if you need to use that money then use it.

Original poster
Bibs2014 · 13/04/2017 09:07

The interest rate on DS's account is 6%.

I may save £100 a month in another high interest account for him...

Thanks everyone!

OP posts:
PippaFawcett · 13/04/2017 09:18

Bibs, that makes no sense at all. You should ALWAYS service the debt before you save.

Snowflakes1122 · 13/04/2017 09:21

I'm so sorry about your failed ivf Flowers
Personally I would use the money, it might be a small amount but you should through every penny spare at the debt to clear it as soon as you can.

KidLorneRoll · 13/04/2017 09:23

Not true about always servicing debts. If you can save at a higher rate than your debts, put the money in savings.

If the debt is on a 0% credit card, the best thing to do is simply pay the min balance each month and save separately so that when the interest free period comes to an end you can pay it all off in one go. If you have £1200 sat in a savings account for a year at 6% that is £72 of free money.

PippaFawcett · 13/04/2017 09:26

Kid, there are sensible ways to make 0 per cent interest to work for you. I use it myself for large purchases. But for most people what you describe doesn't work, which is why 0 per cent is offered in the first place - to entice and trap. And the debt spirals out of control, up to, oh I don't know, £17k worth.

BarbaraofSeville · 13/04/2017 09:26

Bibs, that makes no sense at all. You should ALWAYS service the debt before you save

Only if the interest charged on the debt is higher than the interest earned on savings or if you are someone who is unable to save because they have to spend every penny they have. The OP is paying her debt off and it sounds like it will all be gone before the interest free period ends.

I am probably £20k+ in debt, but I don't give a shit because it is making me money as it's all at 0%, I've had quidco cashback and M&S vouchers from credit card applications and I have savings offsetting all the debt that pays 3-5% interest. Why on earth would I pay it off?

PurpleDaisies · 13/04/2017 09:28

While that's definitely true kid sometimes people would struggle not to spend a large amount of money intended for paying off debt and sometimes the safest option is to get rid of the debt asap.

KidLorneRoll · 13/04/2017 09:31

Pippa, for the OP it's clearly already working.

The debt, for a one-off purchase is on a 0% card, which she has stated she is able to keep up with the payments on - presumably she has a DD set up to pay off the min balance every month.

The question is whether she should continue to keep the money in savings or pay off the debt, and if she can put that money into a 6% savings account. Seeing as she has the debt under control, then it would be daft to pay off a small % of the debt when that money could be working for her. If there was any question that she couldn't afford the min payments then of course the answer is different.

MarcelineQueen · 13/04/2017 09:41

I wouldn't personally. We save for the kids and would only use it if we lost our jobs/became desperate/roof fell in etc. basically if we've got literally nothing else left then we will use that. Savings are important.

It sounds like you're already servicing the debt do is keep things as they are.

I would t move house though, unless you were downsizing. Sounds like it would put too much financial pressure on the family.

BarbarianMum · 13/04/2017 09:43

I think you start saving for your children once you've cleared your own debts and put together some savings for yourself. And if your ds is likely to be an only (sorry Flowers) then there will be plenty of opportunities to save for him later on.

PippaFawcett · 13/04/2017 09:44

I disagree that it is working for the OP. Her latest update is that she is going to continue to save £100 a month for her son, rather than put that towards her debt. Your advice is fine for financially savvy people who can make 0 per cent work for them, but for the vast majority of people it is not wise. I certainly couldn't find £17k by 2020 so she needs to figure about better ways to manage her money.

AyeAmarok · 13/04/2017 09:44

I wouldn't. His savings aren't enough to make a difference to the debt. It's two months worth of payments; totally pointless.

Leave it where it is.

horizontilting · 13/04/2017 10:21

Sorry to hear about your situation, Bibs. It must be very hard to be juggling dealing with the stress of debt and the IVF having failed and always wanting to do the best you can by your son.

Can I suggest you post on this ongoing thread: www.mumsnet.com/Talk/legal_money_matters/2465435-Drowning-in-debt-and-cannot-talk-to-people-in-Real-Life-A-problem-shared-is-a-problem-brought-into-perspective-come-and-join-the-lens

There is very good advice from very knowledgeable people, a lovely atmosphere of ongoing support and they will be able to advise how best to resolve your situation.

ChocolateSherberts2017 · 13/04/2017 10:26

Put the £1200 into a long term fixed notice account or premium bonds and that way the temptation to use the money will be gone. Lock the money away and find other ways to reduce the debt.

orzal · 13/04/2017 10:36

PippaFawcett the OP has said she is paying of debt at £500 per month which is enough to pay off by 2020 on 0%.

OP I would use your son's savings and then when the £17000 is paid off you can use the monthly payments on the loan to save for your son.

KidLorneRoll · 13/04/2017 10:54

Pippa, the OP is already saving towards paying off the debt.

There is no point in paying off a 0% debt before you have to, as long as you plan to pay the debt off when then the interest free period ends.

GabsAlot · 13/04/2017 10:58

it wont look better to the mortgage lenders to have less

my dsis only had 5k in debt when they wanted to move they wanted it cleared before they approved it

unless u get rid of that debt u prob wont be able to move

Wando1986 · 13/04/2017 10:59

He's a bloody toddler it's not his money. It's money put aside for him, in the future. The future might not be there if they dont pay off such a stupid amount of debt. Pay off the debt OP and stop being so daft with money. How did you expect to pay off £17k with another baby if the IVF had worked?! Jesus.

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