Aibu to count DDs savings in the emergency savings fund

[Gettingmoretoast]

We have an account for DD where money from her grandparents has gone into. As she is only 1, although it's in her name, we have full access to it. It's a separate account though with entirely her money and we don't touch it. I'm celebrating 'loosely' as after years of being in debt, we're not only debt free (apart from mortgage), but actually have some savings. I returned to work after mat leave 'full time' in February but used annual leave to complete a phased return until a few weeks ago and I was able to save on the nursery days we didn't need but obviously now we will be paying full time childcare and the bill will increase so I can still save, but a much lesser amount each month.
I'm very open with my sister and we've been supporting each other through our debt - savings journeys so I excitedly told her that after my pay day this month I will have officially reached my emergency savings goal so I can then focus what little savings I can now make for gradual upgrades to the house that I've been desperate to do but have ignored to focus on savings. I told her what the emergency savings was and she said she didn't think that was quite enough and I explained that if we had to, as a very last resort, we would have access to DDs savings too. She then told me that it was wrong to count her money towards my emergency savings goal because it was essentially stealing from her which I really don't agree with.
To be clear, we have sinking funds for birthdays, Christmas, annual expenses such as insurance, MOT, expected car repairs etc. So our savings are for genuine emergencies only and we would need to exhaust our own savings (which are literally 3 times larger than DDs) before we'd touch hers so we are talking some really significant emergency having happened here before we dip into them. Also, we're now paying nearly £900 a month in DDs childcare bill; we'll be able to save a lot more once we no longer have that to pay for and it is our intention to top both our emergency savings up as well as DDs savings up when we no longer have that to pay anyway so if we absolutely had to borrow the money from her, I'm certain we could repay it long before she turns 18 and will be getting it anyway. Is it really so wrong to say that in a genuine emergency I might borrow some of my daughter's money?

Firstly, well done! It sounds like you've managed a massive turnaround and that is no mean feat.

For my part, though I don't claim to be an expert I would generally assume that whoever holds access to a bank account in a child's name is technically holding that money on legal trust for that child. I'm sure that someone will correct me if that is not necessarily the case, but I think it's a useful moral guide anyway.

My rule of thumb as a parent would be to act as "trustee +" for my child, as it were. So my absolute preference would be to never touch that money receipt to invest it for them as best I could do that they have it for their own use when they become an adult.

The other thing I would carefully consider using it for is an opportunity that arose that would significantly benefit my child long-term (such as an amazing education) but isn't something that we could afford for them to do ourselves. I'd check into the legalities of it but that's something I would seriously consider if the aforementioned was then losing out on that opportunity. I'd pay it back over time too.

In terms of emergency family money, I personally wouldn't include it in my calculations, even "at the back of my mind". I'd treat it like it didn't exist for the purpose of deciding how much emergency savings I built up. So in that sense I'm with your sister.

In practice, if we were genuinely in a position where we would, for example, all lose our home if we didn't use the child's money as a stop gap (and there was no other option) I would check what was allowed and then do it on the basis that it keeps a roof over their head and that I would prioritise paying that back too. I wouldn't use it to buy us an extra month in our home if all was lost anyway, if you see what I mean.

I would also rather take out a loan than use it to mend the roof or whatever other day-to-day emergency because it's just not my money. As soon as you start expanding the categories of scenarios in which you might use it that aren'tdirectly for your child's benefit, I think you wrongly blur the lines between what's yours and what's theirs.

So, yes, there are very limited situations in which I'd use it for my child's benefit, but I don't think it's an answer to your sister's criticism to point to your child's money.

As far as I'm concerned, you have 4 months with of emergency savings (and, again, well done you!)

This is why we don't want to put savings in children's names. Its okay to say that its for them unless you hit super hard times, exhaust all of your extensive savings and face homelessness.

The amount parents spend on their DC in a lifetime is a considerable cost and likely to be higher than savings accounts.

The OP could buy pasta and tins and the family live off that for weeks to create an extra security blanket of money, or they could all eat as normal and DDs money (with GP permission) act as a family safety net. DD presumably needs food and a home as much as her parents.

I don't save separate money for my DCs (they have pocket money), as spare goes off the mortgage and into my ISA. Only when I am more secure will I look at their extra needs. At that time I can directly pay for things they need (e.g. driving lessons, Uni fees) without them choosing to spend savings on daft choices (e.g. teen holidays).

OP, put your family needs now first.

No, I personally wouldn’t think it was unreasonable to use it if it was a case of something really serious like you might end up without a home.

@Crabsy well said. I absolutely agree with you. Many mums-netters live in a different world to the one i live in.

XH wanted to do this with DS1 and DD1's money, of course it's stealing!

If the account is in her name and it’s money which has come from someone else then it is stealing. That said, your baby needs a roof over her head so if those were the stakes it would be in her interest to use the money to provide for her basic care.

If I, as an adult, found out that my parents had dipped into savings for me in a dire emergency when I was a child, I really would not be able to be angry about that.
This is with the caveat that I know my parents are good with money, and therefore it would have been a serious emergency for them to need to - parents who spent all the money on crap and then couldn’t pay rent so took my money I’d be more annoyed at.

What type of account is it that you have full access? Lots of parents get stung by opening accounts in their children's names and then finding out years later that only the child can access it.

It’s rare to see a poster with as much grace and humour as you OP fending off the obsessives - well done!
Too many people getting het up over a stranger’s affairs. Or have never been poor before.

Absolutely - if it’s an emergency you’d be entitled to use it. As pp have mentioned it’s the counting it as part of the savings goal that has got people’s backs up but if you could survive on cutbacks for 6 months I’d consider it alright.

In any case - income protection insurance is a better idea than just relying on savings…

I don't count any of my kids' savings or other accounts in our emergency pot. I track them separately in my finance sheet from all our other savings.

I get why you want to - it means you can save for other things sooner and still feel safe, but maybe it would be better to divide any savings between the two and grow both slower rather than counting on your child's savings as the ultimate back-up. It's easy to say you can repay when she's 1, but what if that emergency roof collapse happens at 10 or 15 when there is a likely a significantly bigger amount that could help and far less time to pay it back? If your goal is security, it's not really reasonable to rely on something that you know will eventually not be available to you.

I can't access my kids' savings, beyond what's in their little blue money boxes or otherwise in the house. They're all in accounts that don't allow that (and have never been counted in anything). Most kids' accounts I've seen either don't allow it or have a penalty for withdraws or after X number of withdraws, especially if it's a cash account with extra interest compared to an adult account so I'd double check the fine print on the account before counting it at all.

You've done amazingly to pay off all your debt.

Things weren't great financially for me a couple of years ago but are much more comfortable now.

It has never once occurred to me to 'borrow' money from DD's savings, not even to buy stuff for her. I have an agreement with the people who are paying into it as to what they would like it to be spent on and I will stick to that.

If you'd get into the situation where you would need your DC's money that means your finances aren't predictable enough that you can be sure that you'd be able to pay the money back.

No way would I touch it and I have no savings at all. My dc gave around £4000 altogether from a family member. I put it in junior isas so couldn't touch it even if i wanted to

I also love how many people are saying “I wouldn’t touch her savings in an emergency, I’d get a loan from the bank”.
It may come as a surprise to some people to learn that banks are only interested in lending you money when you already have money. When you’ve got nothing, and no income, they won’t touch you. And even if they will lend it to you, it can take weeks to arrange by which point you might be freezing/starving. Why do you think pawn shops and loan sharks exist?
I guess it depends on your definition of “an emergency”.

Don't include your daughter's savings in your emergency fund. The risk is you'd be dipping in and out of it and mess up her interest etc.
We have savings for children and glad I can't touch them

OP you started this thread and are getting some answers that you don't like, so now you're getting a bit narky and sarcastic. Maybe don't seek opinions from others if all you really want is people to tell you you're right.

@Gettingmoretoast

Really? So if the roof of your house caved in and you needed to use all of your savings to fix it but were a a bit shy, you'd rather take out a loan to cover that rather than borrow from your child's account with a view to repay plus interest somewhere in the next 16+ years before they are ever going to see that money anyway? Does that really not seem unnecessary to people?

By spending your child’s savings, you’re depriving her of interest. My DDs had savings that grandparents contributed to. Even when we were struggling, we didn’t steal their money.

I this is all v subjective anyway. This is on the basis that your sister doesn’t think your emergency fund is enough? If you do, then that’s all that matters.

We don’t count DDs savings in witb our main household pots, and generally wouldn’t touch them. But if it were to keep a roof over our heads in a dire emergency then of course they would be used and paid back in due course.

Of course you are being unreasonable. That's money gifted to your daughter, for your daughter. Most parents have savings accounts for their children that neither can withdraw from until they're 18 so wouldn't ever consider dipping into it. That's what savings are for, a 'hole in the roof' or a new boiler etc it's for emergency. If your daughters grandparents wanted to give you money for emergencies then they would, but they're not.

your focus should be on building up your emergency fund instead of focussing on whether you can steal your daughter’s money.

I'm losing patience with Mumsnet to be honest. You try and have a genuinely nice discussion with people and actually do enjoy hearing the different options of other people but that is clearly not what a lot of people use this forum for. I respect other people's opinions; I don't respect people attacking others or essentially calling them bad parents or thieves based on a hypothetical situation where there cannot possibly be a definite right and wrong answer. I don't think I'm in the right place. Thank you to the nicer posts (and no, not just the posts that agree.... This will come as a shock to many of you but it is actually possible to disagree without being rude but I'm losing interest in hearing from you). Night all 👋

OP flounces off. (I don't think this thread has gone the way you expected it to).

My children are 16, 18 and 20 and I still have access to all their savings accounts. No way would I take a penny and we've put a lot of it in there!

Yabu.

“Really? So if the roof of your house caved in and you needed to use all of your savings to fix it but were a a bit shy, you'd rather take out a loan to cover that rather than borrow from your child's account with a view to repay plus interest somewhere in the next 16+ years before they are ever going to see that money anyway? Does that really not seem unnecessary to people?”

That’s what insurance is for!