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.

I'm interested in the 'lend her the money, she can repay out of her allowance' theory. Isn't teaching them to borrow money instead of using money they have the opposite of what you should be teaching them; which is to avoid debt?

I don’t think you’re being unreasonable at all. She gets an allowance, she can save for the trainers or you lend her the money and she looses a percentage of her allowance each month to cover the cost.

I think having a long term savings plan is much better than her just flitter the cash away on the latest trend. X

She will essentially have to borrow money at some stage even just if it’s for a car or mortgage surely teaching them the implications of this early on is a good thing…

We’re talking about trainers here… the likelihood is they’ll be out of fashion next month…

Yes she might have money to one side already but if it’s in an high interest / investment acc long terms it’s better for her stay there.

She will essentially have to borrow money at some stage even just if it’s for a car or mortgage surely teaching them the implications of this early on is a good thing…

I'm not talking about cars and mortgages though. I'm talking about trainers. It's important to teach them not to borrow money for trainers etc and only but if you can afford. Which OPDD could.

I'm interested in the 'lend her the money, she can repay out of her allowance' theory
I think this is trying to make the best out of a bad situation.
Seeing that mum decided to lock dd present money away without her permission because 'she knows best' and it is causing issues i.e. the DD wants her present money solutions are being sought.

However I do believe ( without scrolling down) the DD has the trainers and will pay back the difference between what OP would have paid for trainers and what they actually cost. Fair enough.

I had my money in a bank from birthdays, savings etc as a child. I was given the option of having it at 17 to buy a car, or having it at 18 to do as I please. I’ll be doing the same for my children. They will have a current account which they will get their pocket money in but any birthday money will be going straight into their account.

If nothing else this thread has taught me never to give someone's kid money for their birthday. I used to buy gifts but when they got to 13 I would give money. I shall go back to buying gifts now, I can't imagine a 15 year old not being able to go into town with their mates and spend some birthday money. How absolutely miserable.

@elelel

If nothing else this thread has taught me never to give someone's kid money for their birthday. I used to buy gifts but when they got to 13 I would give money. I shall go back to buying gifts now, I can't imagine a 15 year old not being able to go into town with their mates and spend some birthday money. How absolutely miserable.

I agree. It’ll be vouchers or a gift card from now on. This thread’s been a real eye opener.

Our DC will be rather well off when they're older, and though still young we've thought about how to help them understand and manage money from an early age. As mentioned earlier they get to decide on which particular accounts they open, and also they decide how to split pocket money and gift money - between savings and current (or savings and piggy bank for DS who is too young for a current account).

Maybe I can only say this because money is not an issue (i.e. they're not going to go shoeless if they spend the money on something frivolous) but we feel that they need to be able to make mistakes and learn from them now, whilst the amounts are limited and we are there to be consulted. If we managed all their money for them and insisted on what happened to it, they wouldn't get to 'learn on the job' and would be unprepared for adult life.

@ArthurTudor given that the OP's daughter constantly buys clothes and wants a pair of expensive trainers her parents can hardly be on the breadline. In that context £50 is very little.
Of course if daughter doesn't socialise, or buy anything without her parents it's a lot of money. Otherwise, for most teens it's a very small amount.

If a parent can't afford £50 then tough luck, but that doesn't change the fact that it's a small amount if that's the 'only' amount given for non-parental spending.

The reason it's relevant is because OP thinks it's such a generous amount that daughter would have wanted to fund expensive trainers on it.

OK, it was a bit unfair locking her money away without discussing it with her.
£50 allowance is pretty generous but you say she isn't very good with money so now is an opportunity to teach her.

My solution would be to loan her the additional money but agree that she pays you back a set amount each month out of her allowance - just enough to make her realise the value of money. Explain about loans in the real world but that you won't be charging interest. Maybe take the opportunity to encourage her to save a small amount too as she'll be really glad of a bit of extra money if/when she goes to university.

My solution would be to loan her the additional money but agree that she pays you back a set amount each month out of her allowance - just enough to make her realise the value of money. Explain about loans in the real world but that you won't be charging interest. Maybe take the opportunity to encourage her to save a small amount too as she'll be really glad of a bit of extra money if/when she goes to university
They"ve already resolved it.
And why the hell should there be convo about not charging her interst. There shouldnt be a thought that there was a possibility that she could have been charged interest but kind mum is letting her off. Their are in this predicament because mum thought it would be a good idea to do as she pleases with someone elses gift money! She's not doing a favour by not charging interest!

@Iputthetrampintrampoline

Not wishing to sound unreasonable but an allowance of £50 p/m is not a great deal for a 15 yr old either, it amounts to not even a pair of jeans let alone much else. And I think you shouldnt have locked her money away either without it being mutually decided, She might be foolish with money but its her money,

How much are you spending on jeans?! £50 is at least 2 pairs worth, surely....

Not everyone wants cheap £20/25 jeans. Everyone wants a certain style or brand. Back in the day I bought myself some 501s and wouldn’t have been seen dead in M&S basics. My dd lives in branded sports leggings. I buy the £35 ones and she bought herself the £70 ones from birthday money. I’m sure op thinks that’s a waste also.

Shes a minor so no, YANBU.

“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”

Completely agree with this above, YABU

But £50 month is VERY generous monthly allowance (IMO) - does she spend it all each month? Or is she learning to put some aside, learning to save… ?

[quote sanbeiji]@ArthurTudor given that the OP's daughter constantly buys clothes and wants a pair of expensive trainers her parents can hardly be on the breadline. In that context £50 is very little.
Of course if daughter doesn't socialise, or buy anything without her parents it's a lot of money. Otherwise, for most teens it's a very small amount.

If a parent can't afford £50 then tough luck, but that doesn't change the fact that it's a small amount if that's the 'only' amount given for non-parental spending.

The reason it's relevant is because OP thinks it's such a generous amount that daughter would have wanted to fund expensive trainers on it.[/quote]
I stand by my point that £50 to spend on "whatever" is fine. It is not a small amount if you have no clothes, phone, travel, food etc to buy.

But this is MN. Where £50 to piss up against the wall on magazines and fraps from Costa is no way near enough!

My friends son had money from his mum who had passed.he was 18. He frittered the whole lot away on pretty much nothing. He's 25 now and regrets blowing every penny so much went on jumped train fines , weed and taxis everywhere.
He didn't buy anything

@elelel

If nothing else this thread has taught me never to give someone's kid money for their birthday. I used to buy gifts but when they got to 13 I would give money. I shall go back to buying gifts now, I can't imagine a 15 year old not being able to go into town with their mates and spend some birthday money. How absolutely miserable.

Me too. I used to give money for the kid to spend on whatever they wanted. But not any more.

You are absolutely right. She is still too young to realise that this money will be so much more useful for her in the future - getting on the property ladder for a start!
She has £50 allowance a month which imo is a lot so it won't take her long to buy the trainers - she must have some of the cash still?
I have a £15 year old and I can't imagine what he would need £50 a month for - it would just be frittered away. Until they are 18, we think we should be buying our children's clothes but if an expensive item, it would be 50/50. So buy the trainers for your daughter but don't give her the allowance for several months.

She still wants her £50/month, that’s the problem and won’t be happy with reducing it by £10 for many months. All along she wanted to pay the difference with her savings.

I too used to give money to my nieces and nephews as teenagers, until I realised they never actually got it.

It wasn't your money to do that with. We pay into their trust funds but that's different as it's our money however if it is their own xmas/bday money they do as they please with that.

@bendmeoverbackwards

I should add that before I opened the ISA, she had the savings in an account that used online banking. So with one click she could transfer money from savings to her current account to spend. She is really not good with money.

Time for her to learn then. You put the money in a high interest account when she was too young to decide or understand for herself which was the right thing to do.

You essentially have two choices, tell her no and she can save for the shoes and learn money doesn't come easily.

Or, can she get the money out and pay an exit fee? If she can, tell her the penalties and explain what she would have got at 18, explain the shoes will only last 6 months or so (assuming her feet are still growing) how the money could do more for her at 18 when she might want something else. Then let her decide. While you keep shielding her from the consequences of spending she won't become better at handing money. We learn through our mistakes.

I do not agree with giving her the money and taking it back later when the account opens. There is no money handling lesson with that option.