AIBU to ask how much you save for your kids over the year compared to what you spend at Christmas

[GordonsAliveAndEatsPies]

This has been triggered by the "what do you spend on your kids at Christmas" thread, because looking at the figures I would say we spend less than the top figures on each DC but definitely save quite a lot more "on behalf" of each child when you add up pensions, Isa's and pocket money.

I am just wondering if we are unusual in our thinking? Is it about putting money in their names (which I certainly understand is something we will have to cross when time comes) or is it something else?

BTW I am aware this is a sensitive subject and we are lucky we can do this and it's certainly not meant to be goady.

I've never saved "on behalf" of DC because I wanted to control if/when they get it, but we have significant saving that they will probably benefit from at some point. I didn't want to be in a position where a DS was in, say, an abusive relationship and came into a significant sum that his partner would benefit from or would blow the lot on drugs but becaus it was saved in his name, it was his iyswim.

@happystone If my DD chose to become a plumber or hairdresser she could use the money towards buying a car or going travelling, as I said in my post. Furniture/appliances for a flat when she moves out. Towards a wedding. To buy a pram and car seat if she has a baby. Doesn’t have to be Uni.

Wow this thread is bonkers. People have 40, 50+ K saved for their children?? Crazy times.

My 18 year old has about 3K saved in bonds that family bought him over the years. That's it

I have spent more than 3K on his Christmas over the past 18 years, but not loads either. He'll inherit a house one day, or his children will and he will inherit something from my mum.

That's how it is for most people I think. Very few children have investment streams! It is very much what privilege looks like, and how it is maintained.

[quote BelleSausage]@christinarossetti19

I don’t think it is sneeriness. It’s a window on what financial literacy looks like.

Now more than ever people need to know about good personal finance. COVID has been then nail in the coffin of casual spending for a lot of people. In the same way that the 2008 crash was the death knell for unregulated pay day loans being seen as acceptable.

I wish I had been more financially aware in my 20s. I wouldn’t have had to struggle so much in my 30s.[/quote]
It doesn't matter how much you know about 'good personal finance' if you only have enough money coming in to make ends meet.

In fact, making ends meet on a low income is the very definition of good personal finance, I would say.

I don't think anyone on this thread has disclosed how much 'casual spending' they do, have they?

Inheritance is not guaranteed. Having watched all of MIL savings and family home go towards 10 years of care home fees (upward of 500k) there was nothing left by the end.

I just pay for their presents as I buy them
Out of my wage/ monthly money, that's my entire Xmas shopping which comes to about £600
I save their child benefit for their future 40 per month and let that excess build up for things like uniform
Their father pays for all their sports / school
Stuff so it works well

I do save £50 a month each for both the DC. It's there to be able to pay for driving lessons for them, as my parents didn't do that, as well as to be able to dip into for uni expenses like the deposit for their digs. Whatever is left if/when they decide to get married or start living in a house or rent a flat will be gifted to them then. They don't know about it so will be a surprise.

@christinarossetti19

No one on this thread has tired to os judgement on those just getting by. DH and I just got by for a long while with no room in our budgets for personal spending outside of bills. It is miserable.

I get that there are families with nothing. But this thread isn’t about that. This thread is about the massive over spend and showing off that seems to have become the norm at Christmas. I think that more than anything can make families with not a lot feel like shit. I know I certainly felt dreadful when DDs first Christmas rolled around and we could only afford to buy her two things. Yet I could see the piles and piles pictures on FB and Insta by friends with kids.

But things have really changed for us over the last four years. Both my DH and I have had pay rises and DH has qualified in his profession. We have no debt and quite an big spare income after bills.

But we don’t spend much of it at all. We now save £1500 a month. Because I can still feel the pinch and never want to feel it again. I would rather save up first and know I can afford something.

As I said, this thread is about spending choices for those with the money, not the poor sods who are being rung dry by the system. There should be another thread on how disgraceful the level of child poverty is in this country- the bloody government should be ashamed.

I get that there are families with nothing. But this thread isn’t about that. This thread is about the massive over spend and showing off that seems to have become the norm at Christmas.

I don't think that's strictly true from the OP. The OP asks if people save more than they spend at Christmas, and thinks £1,000 per child is extremely OTT. And I think most people would agree £1,000 sounds OTT. But is £500 OTT, say - if it includes clothes for a teenager, something for their hobbies and an expensive tech gift they wouldn't get any other time? I'm not sure it is, personally, if you don't spend much else on them the rest of the time and they have to wait till Christmas to get things more wealthy families (those who can afford to appear frugal at Christmas or birthdays because they can treat the kids all year round) take for granted?

It's really easy to save more than you spend at Christmas if you have smaller children. It is harder as they get older. That's just a fact.

Financial literacy is low, it's true. But some people are really making a conscious choice to spend instead of save - because they're valuing being able to give their kids what they need (and want) in the here and now rather than some arbitrary time in the future.

The OP is coming from a position of privilege (pensions, substantial savings etc for the DC) and doesn't necessarily seem to have considered that the reason people spend more relatively at Christmas rather than use a long-term savings plan is because they actually cannot realistically afford to do both.

We spend 'a lot' at Christmas on the kids.

They'll also receive a decent but not ridiculous trust fund when they turn 21.

I don't get how pocket money is saving for them? Obviously they can choose to save some but that is them saving for themselves.

I save £120pa for each DC. It is all I can afford right now but luckily they get another £20pm from GPs. I probably spend approx. £150pa on presents plus money on a party/outing on their birthdays. I spent much less when they were younger, though.

We saw a lot in the childrens ISAs. Partly because it is tax efficient to do so, partly with the intention that it may be used for university, starting their own business, buying a home etc. Its more than we would give at Christmas but atm they are quite young and dont have expensive taste. In any case though I think savings for those things will always outweigh what I would expect to spend buying "stuff" at Christmas.

But is £500 OTT, say - if it includes clothes for a teenager, something for their hobbies and an expensive tech gift they wouldn't get any other time?

I find this notion that children should ever own incredibly expensive stuff (when they arent buying it themselves) insane. The one that got me on the other thread was the person buying a £2,700 gaming PC for their DC. I just dont think any one needs to own something so expensive unless they are old enough to earn it themselves. For me part of the responsibility of adulthood comes with rights including to own valuable items, I don't think children deserve so many such valuable items until they have the responsibility to earn and accumulate the wealth to buy them. You don't just get such terrifically expensive items simply because you want them.

Maybe I am odd in that view.

I put my child benefit payments into my sons savings each month (£90). I save £25 a month for his Christmas presents & experiences (spend about £200 on presents for him and the other £100 goes towards santa visits, Christmas days out etc

@NoIDontWatchLoveIsland

But is £500 OTT, say - if it includes clothes for a teenager, something for their hobbies and an expensive tech gift they wouldn't get any other time?

I find this notion that children should ever own incredibly expensive stuff (when they arent buying it themselves) insane. The one that got me on the other thread was the person buying a £2,700 gaming PC for their DC. I just dont think any one needs to own something so expensive unless they are old enough to earn it themselves. For me part of the responsibility of adulthood comes with rights including to own valuable items, I don't think children deserve so many such valuable items until they have the responsibility to earn and accumulate the wealth to buy them. You don't just get such terrifically expensive items simply because you want them.

Maybe I am odd in that view.

£500 is quite a different amount to £2,700!

NoSquirrels is right inasmuch that a secondhand phone, few items of clothing and a new pair of sports shoes or whatever the teen is into, plus bits and bobs for stockings can soon add up soon adds up.

And realistically, families who are able to afford to save considerable sums of money for their children will have provided them with these items as well as, not instead of, savings.

I'm spending about £300 per dc this year. I'm maxing out their pensions and ISAs, and mentally a lot of my own investments are earmarked for them (but will remain in my name for many years). It makes sense to use those accounts due to the tax advantage.

I have spent much more on the dc for Christmas/birthdays in previous years (e.g. expensive gaming pc), but not more than I'd saved for them. I don't see the point in refusing to buy expensive gifts just for the sake of it though. If it's something they will appreciate and appropriate, and we can comfortably afford it, then that's what matters. OTOH, we have spent much less when they were younger, because they were perfectly happy with cheaper toys.

I've stopped saving in their names as I don't believe a huge lump sum at 16/18 is a great idea. We are saving in general for us which we will help them out in future.

@PontiacBandit yes that's my approach.i save a nominal amount in their names but most just gets saved in our accounts but is earmarked for them . I don't want them blowing it all at 18! (Hopefully they will be sensible and we use pocket money to try and teach them to save...)

realistically, families who are able to afford to save considerable sums of money for their children will have provided them with these items as well as, not instead of, savings

This is the crux of it that I think people are sometimes blind to because of their own (relative) privilege, quite honestly.

The person spending £2,700 on a gaming PC is probably wealthy.

The person spending £500 on a £250 iPhone that's 4 models past being cool, a pair of branded trainers at £80 (instead of the £40 they could more usually afford if it wasn't "Christmas"); the Playstation game @ £45 and the remaining £125 on lower cost items like pyjamas, pants, pens and board games and stocking gifts, food treats etc - are they wealthy?

I highly doubt anyone who's spending the best part of three grand on one computer for a minor doesn't also have lots of cash already allocated for the same minor in the future. I do not necessarily feel the same about the parent of the teen with the not-latest iPhone etc. Maybe it is reckless not to save half that £500 every year. But childhood is short and the effects of "going without" can be long-lived.

It's not as simple as save more money because that's "best". Not when there's not so much going around in the first place.

We save a lot more for the DC than we spend on them at Xmas.
£100 pcm per child in their CTF/ISAs. Plus the grandparents put in a bit too each month.
At Xmas we spend approximately £100-£150 on each DC.
Couldn’t imagine it being the other way round. And no they definitely don’t ‘go without’ the rest of the year.
The money we save in their names is earmarked primarily for tuition fees. If they decide not to go to university then it will hopefully be spent on a first car/house deposit/business venture/travel.
I do understand the notion that they might piss it up the wall at 18 on booze and drugs but I sincerely hope not lol.
And yes I do realise how lucky we are to spare the money each month.

At Xmas we spend approximately £100-£150 on each DC
Couldn’t imagine it being the other way round. And no they definitely don’t ‘go without’ the rest of the year.

But... how old are they? £100-£150 is loads when they're under 10. And potentially not enough when they're teens.

And of course they don't "go without" the rest of the year. That's the thing. If you can save £1,200 per child per year for their future, AND they have grandparents who contribute (and presumably also buy fairly generous Christmas gifts?), then you're lucky not to have to worry about money in any big sense so you're not rationing the in-between times and saying no to everything the rest of the year.

It's so hard to understand the other side of it, I think, if you're used to thinking "saving and spending wisely" is the best plan. But for some people it actually isn't, not really. If I had only £50 'spare' after bills & essentials every month, I'd not be saving it until my DC were 18. I'd be saving it for Christmas, birthdays and holidays.

"But childhood is short and the effects of "going without" can be long-lived."

Yes, this in buckets.

It's unlikely that the children with investments streams and pensions in their name will be avoiding going to school on PE days because their trainers are crap, or pretending that their phone is broken because they don't have one or have a crappy Nokia etc.

Equally unlikely that their parents will be experiencing the shame and guilt that comes from not being able to provide your children with what you'd like to in order for them to fit in.

"If I had only £50 'spare' after bills & essentials every month, I'd not be saving it until my DC were 18. I'd be saving it for Christmas, birthdays and holidays."

Yes, and birthday/Xmas presents would be (are) MP3 player/phone/trainers/decent clothes/headphones/books/clothes/toiletries/room decorated etc all that families with more disposable income buy for their children as a matter of course or children buy themselves from generous pocket money.

[quote GordonsAliveAndEatsPies]@snog yes we have since birth. We are lucky that our dd8 has about £40k so far and dd5 £28k across different investment vehicles. New one on the way so just getting ready to sort out a new stream for him too. But then my parents did the same for me and DS so it wouldn't have occured for us to do any different.

However, it's just so interesting to see people's mindsets as so many people seem to splash out for Christmas but you wonder if they would think about a long term savings plan. I even saw one thread where someone just wanted to know the going rate for pocket money and so many posters came back with none because "they don't need it" or "we spend enough".[/quote]
What types of investments do you use?

We have a small savings account for us all (me,DH and DS). Very small, rainy day type.

We spoil him throughout the year and on occasions - we tend to pretty much live in the now.

I had him at 39. We live in a forever home (mortgaged for another twenty years) and both have pensions and both sets of our parents are alive - so I hope our lack of savings and spending on a nice life in the here and now will be compensated by some inheritance and equity when we downsize 😬

I appreciate that we are very lucky anyway.