AIBU about child savings?

[pinkunicorns54]

Happy to be told I am being unreasonable just need some perspective!

We currently have a junior ISA set up for our toddler. Saving roughly £80pm - I suddenly have a sudden thought of if we are able to do this until they are 18, there will be a fair whack in there - I'm nervous about them having access to this when they are 18 and maybe not have the maturity to know how to manage this!

My DH thinks that we will be ok just instilling financial education into them when they are growing up and if they do decide to blow it on things I wouldn't want them to - then we just need to suck it up as it will be there's...

I'm of the view that we save in our names, so we have more control over it...

YABU - leave it in their name

YANBU - save it in yours!

Happy for anecdotes from people who have done similar / have grown up children!

Savings for money others had given him and account in our name for money we are saving.

I saved for mine and including them in the saving plan. Encouraged them to put away at least half of any monetary gifts they were given and then at 18 transferred the accounts over to them.The older is now 25 and still saving and has around £50k in his Issa. He has saved at least half of this himself. My younger has slightly less as he has learnt to drive and bought a car but he should have enough saved for a deposit to buy a property by the end of this year.

not every 18 year old will waste their savings as soon as they get access to it. But I believe you have to teach them about the importance of saving and include them in the actual process so they can watch their money grow. They need to learn that it takes time and some sacrifices to save a decent sum of money and once they have it to appreciate it and not squander it.

Everyone here has such different experiences, so here's mine just for comparison. We set up JISAs for DD (now 18) and DS (now 14) and started talking to them about it very early. Both of them have agreed that a house deposit is the best use of the cash. We put the savings into their names partly because our finances fluctuate a bit and if it were in my name, I'd be too tempted to raid that pot from time to time.

DD got around £25k on her birthday. She took £1k as spending money, and moved the rest to a standard stocks-and-shares ISA. On my advice, she also opened a LISA and transferred £4k to it, and will do the same with the rest until it's all there. The plan might change, if she finds that she can't live on the standard student loan -- we'll be topping it up to max.

Of course it might all go horribly wrong with DS!

Yanbu. Put as much in your name as you can.
It doesn't matter what you instill in them they can still go off the rails and waste it. And it won't really be a lesson learnt, they'll just feel awful about it and have lost opportunities. That money won't come back.

Just suppose 1 in 100 teens go off the rails a bit around the age of 18.
Are you willing to risk your hard won savings against them not being in that 1%?

Just a note to advise if you die the monies in your name form part of your estate.
If joint with spouse they will go to the survivor of the account and if they die form part of their estate. You would have to mention the specific account in your will and who is to benefit from it.

Yes; also, in a divorce, the money might also not end up going where you would like!

I'd say neither is entirely unreasonable and with the amount you're saving, it makes sense to me to have both savings for them to an amount you're comfortable with being in their control at 18 and another for later if there is something you want to make sure there are funds for.

I was given a few thousand at 18 by my grandfather and it made the transition to independence a lot easier, and so I'm trying to do similar for my kids. Sure, they might go crazy, but the damage is limited and with my oldest at 17 and having discussed it regularly, I'm not seeing signs he's preparing to blow it all.

Our only DC is about a month off getting theirs (has received the letter from the bank and been able to see the balance on their banking app since 16, as CTF is with the same bank). We started saving £100/mth (which was the max at the time) for them into it when they were a baby but never increased it when you were allowed to put more in, and I'm glad we didn't. They'll be getting just over £30K to re-invest (it was a s&s CTF but not a great performer!) as a good start towards a house deposit.

Over the years we've made their financial education a priority and they've proved themselves to be sensible with money and interested investing so we're not worried about them blowing it. I think having this money in their name helped focus their attention on it but I'm not entirely convinced (without the benefit of hindsight that this would work out ok) that I would save this much again like this. Whilst we have saved in our own names etc we definitely weren't in a position to max out of own ISA allowances every year first.

They are getting a generous amount of money (way over normal budget) from us for their 18th for 'fun' and we are funding driving lessons/parental contribution to uni out of our won income/savings, so it is easier to do a straight transfer into a ISA for the whole lot.

When my son was born my in laws wrote a cheque for a few thousand euro and we didn't know what to do with it so we opened a savings account in his name and put it in there. We can no longer touch it and he will get it when he turns 18, plus anything else that gets paid into that account in the next 17 years.

We also wanted to save for him monthly but we didn't want him gaining access to a huge sum of money when he turns 18. So we now save into an investment vehicle in our own names, and the money remains ours to do what we like with even though it is intended for him eventually. It means we retain control over the money. It also means that if we were to fall on hard times we could get the money out and use it for essentials. The named beneficiary is our children rather than our son specifically, which means that if we have more children, there will be a joint pot for them rather than different children potentially having different amounts saved in their name if our financial circumstances change.

We’ve been really upfront with ours that they will get £10k when they are 18. We’ve talked to them about putting some in a LISA and thinking ahead to a house deposit. We are also saving a bit more for them which we haven’t told them about so we can give it when they might need it.

Whatever you decide you want to actively educate them about finances - real world examples where people they know (e.g. you!) screwed up are excellent.
Grab them whenever you are renewing insurance, getting the gas/electric/water bills, getting the car MoT'd, any time you're spending money that's not personal to you. I.e. when you're on the LoveHoney site :)

My DC got £10k from his ISA last year. He's still got the money in an ISA and is saving it.

If you want them to have something and not access it up they’re all sensible start a child pension.

I have an 18yo and a 17yo so I know an awful lot of dc who have got access to their CTF in the last couple of years. I know 2 who have transferred it to LISAs, and roughly 10 who have basically spent it weed. The majority have spent it on “living” so better phones than they would otherwise have, more clothes, Ibiza for 10 nights rather than 7, a trip to NY that they wouldn’t have otherwise been able to have, gaming computers and cocktails. It hasn’t helped that gap year travel has been off the cards for many, and driving lessons have been tricky. I do know a girl who bought a car (parents paid for the lessons) and she bought a brand new car. Without the money she may have stuck to a £2k car instead. It’s absolute crap that you can prevent “waste”, whatever that means to you, through financial education alone. It’s developmentally appropriate for these kids to be branching out and be pretty impulsive. There is a rough correlation between how impulsive these kids were when they were younger and how “sensible” they are being now but it isn’t really related to how well parented they are, or how affluent their family is. Nobody can guarantee “well, my 4yo would never spend money on weed” or “it’s for driving lessons/education so I’ll tell them that and they won’t buy a gaming computer.” I have 4 dc, 1 saver, 1 spender and 2 in the middle but they’ve all been raised in the same house with the same values. I wouldn’t want any of them to be burdened with the responsibility of my diligent savings at 18. A couple of grand is great to ease transition to adulthood, or even to blow on a great time but I would rather save in my own name and transfer to Lisas at 18.

Absolutely save in your name, anything else is madness.

We have decided to cap their junior ISAs at 10k each then save the rest ourselves for them so if they do blow it it’s not the end of the world!

@RoseGoldEagle

I was the Same.
And it's still hanging around my neck.

My df tried loosely to educate me re Money but I hate to say ,not well or properly.

Proper financial education is non existent.

I've seen the most pitiful financial education in action and the people giving it ,can't save themselves!

Investment education is important and should be taught properly.

People say " my neice inherited 10 grand and spent it at 18 on madconands and tattoos"...

Did that 18 year old ever have prior savings? Did she ever...save or understand investment?
Had she ever had to manage her money?

I save in a savings account in my name then I'll probably give her some at a time as and when she needs it for big thjngs like a car or uni.

I have a JSA for mine but it’s registered to a different address so with any luck he won’t find out about it until he’s financially responsible enough to access it!

Definitely don't let them have access to a large amount of money at 18 - I speak from experience!

Re the 1% absolutely but...a child who has learned money management from very age, has already infused the habit of spending and saving, understand the rudiments of investment and compound interest etc...why would that child blow it all?

This is why I got both dc bank cards and some money to manage right now.
So habits are already established!

Because:

• they're 18 and they are rebelling


• they have an unsuitable boyfriend/girlfriend who they are influenced by / are trying to impress


• their brains are still developing so they decide to have a blow out holiday instead


• they've got into drink/drugs and their previously sensible self has gone up in smoke

Teens can know all the theory and still not put it into practice. Most no doubt will be fine, but there are enough threads on here to show a significant minority are not. And you don't know when they are 4 or 14 which way any individual will go.

Loads of adults would blow a windfall too. Most adults spend spare income on having a nice time and nice things that could be saved for the future. Even people who are good savers don’t save every penny they can. Adults who have been in charge of their own saving and spending for decades can make daft and impulsive choices if they get a sudden windfall. Teens shouldn’t be held up to a higher standard. The difference is the parent has done the saving and thinks they have no right to spend in on what is important to them in the moment. If you want the right to decide what the money you have earned and set aside is to be spent on then save in your name.
How many 18 year olds aren’t used to having any money? Most of them will have been working for 2 years.