Money - has dd got a point?

[bendmeoverbackwards]

Dd is nearly 15. A few years ago she had quite a bit of money from an event plus money from relatives, birthday money etc. She used some of it to buy a laptop and a few other bits. She agreed she would save the rest and I opened a separate savings account for her where, at the time, she was earning a bit of interest.

Then interest rates dropped so I shopped around to get her a better rate. I opened a Junior Cash ISA which is paying 2.25%. However the money is locked in until she is 18.

She's now very upset that she can't access the money. She wanted some expensive trainers for Christmas, I said I would pay up to £X and she would fund the rest. However she thought she would take it out her savings and I thought it would come out of her monthly allowance from us (£50/month).

I opened the ISA partly because of the interest, and partly because I didn't want her frittering away her savings on clothes.

She says it's her money and for her to decide.

Why don’t you just buy her the trainers?

Why don’t you just buy her the trainers?

I’m guessing that you don’t know how much an “expensive” pair of trainers costs these days?

Did she agree or know that the money would be locked it?

So she didn't realise she couldn't access the money until she's 18? I don't think you should have done that without telling her.

If she was of an age to make decisions about her money - which if she bought a laptop I presume she was - did you discuss opening the ISA and the implications there of with her? Or did you just do it without her agreement?

If she agreed, then it's a lesson for her and she'll have more money at 18. If you didn't discuss it with her, she has a point, you have essentially locked her money away from her.

I think YABU I’m afraid. From the age of 11, I had access to my own Abbey National account with deposit book and I managed it entirely myself.

You’ve been high handed with money that was given to her as a present from relatives. It’s not money you have given her.

@NChgforMatrixThread

Why don’t you just buy her the trainers?

facepalm

If it was money that you’d saved for her then I’d say no, but it’s her birthday money etc, you may not like it but it is her money.

Did she know the money was tied up?
IMO it would also depend on how much the trainers were - £100 ish I would lend her the money until the ISA matures. Couple of £100 and she knew about the ISA no I wouldn’t.

Did she know you were locking it away until she was 18 when you opened the account?

It is her money, and your post doesn't indicate she fritters. The impression you've given is that she wants something that is more frivolous than practical and you don't approve, but I apologise if I've read that wrong.

How much are the trainers? And how much are the savings? I'm left with the feeling that its really quite mean to keep her savings from her for 3+ more years - that doesn't teach her money management at all.

Op as an side, why not use this opportunity to get her to learn about investing.

My dc have two Ida's.

One is 1% (where is your 2 % BTW).

That's a cash isa.

The other isa is stocks and shares and is running at 25% in a vanguard life strategy fund which basically is a bit of everything and then index tracker funds.

In this speficic case I would help her buy the trainers.

Yes you're being unreasonable. If I had given a relatives/friend's child birthday money, I'd expect them to be able to spend it on clothes/trainers if they wanted. Also 2.25% for a child ISA with no instant access sounds really rubbish anyway!

@SmallElephant

So she didn't realise she couldn't access the money until she's 18? I don't think you should have done that without telling her.

This. And be prepared that it will rankle and come up in every argument until her 18th birthday. Whereupon she’ll probably fritter it away.

Lend her the money then take it from savings at 18

No I didn't discuss the implications of the ISA. My thinking was - she had already spent some of it - absolutely fine. She gets an allowance of £50/month from us and she will hopefully get a part time job when she's a bit older. I wanted her to have a bit of money saved for her future and earn a bit of interest in the process.

Op I think she should have had some choice over the savings account.
It is one thing to agree together to save it for eg driving lessons or uni, and another thing for your mum to decide.

So, I think an apology is due.
But also as part of that maybe some planning - depends on how much money it is, but show her some of the things she might need it for at 18.

But at 15, she thought she had some money now and she doesn't. Not sure how you resolve that one.

@whatnumber

Lend her the money then take it from savings at 18

I was actually thinking of doing this.

@NChgforMatrixThread

Why don’t you just buy her the trainers?

She has a point tbh since you’re expecting her to fund it with her allowance from you anyway, you may as well buy them and tell her she can’t have her allowance one month.

Or put the savings in a different account so she can access her money. I think she has a point really, it is hers.

So, you locked her money in so that she couldn't fritter it away without telling her the terms of the account. That's pretty unfair.

Chances are she can take all the money out but she will lose the interest rate in doing so, have you told her that?

You shouldn't have locked away money gifted to her without her agreeing. DS has money locked away until he is 18, but only I add to that, and anything he earns or gets as gifts goes into his spends account along with his allowance, which he is free to do with as he pleases.

She has a point tbh since you’re expecting her to fund it with her allowance from you anyway, you may as well buy them and tell her she can’t have her allowance one month

She still wants her monthly allowance. She wanted the money for the trainers to come from her savings that she now can't access.

I agree with the others - you shouldn't have locked away her money with out talking it through with her first and her agreeing. This is her money.

It is her money, if you put it into an account that she didn't know she couldn't access until she was 18 that is extremely unfair - interest rates are poor everywhere at the moment for savers, that's just the way it is.

Did she have no choice at all about the savings account?

*"Lend her the money then take it from savings at 18"

I was actually thinking of doing this.

Good call.

I think it’s unreasonable to lock away birthday money without her agreement - the money was given to her so she could choose a gift for herself and to a teenager “save it” is going to mean “until I see something I want to buy.”

Money given specifically for her future, or which you’ve saved for her yes, fine.