To give or not to give DD the money…

[Youdontseehow]

That is the question!

We came into a bit of money 2 years ago - 100k. We decided to give DS and DD 40k each to get on the property ladder. DS bought a flat about 15 months ago using the whole 40k as deposit.

DD (26) is aiming to buy a flat with her BF (boyfriend) at the start of next year when both their LISAs can be accessed.

BF will have 20k so they’ve decided it’s fairer to both just put in 20k each as deposit. DD has 10k in her LISA plus the other 30k in my bank account.

She’s now asking if she can have that 30k transferred to her so she can put it in her own high interest account.

So here is our dilemma (DH and I). DD is a bit of a spendaholic. She loves buying things for others too - random gifts, flowers etc. But she has been slightly better recently eg “only” spending £100 online for clothes instead of the £200 she wanted to spend. She’s also started diarising money in/money out sort of thing.

I want to just give her the money as earlier discussed (although we thought it would all be going into property deposit) with the caveat that if she’s fritters it away, she’s getting no more from us (she knows we have significant savings ourselves). DH however doesn’t want her “wasting money on shit” and for us to keep it until she’s actually bought a flat so she can use it for fees, furnishings etc.

What do you think? would you give her the money now or keep control of it? (I’ll try to put it in a AIBU format!)

YABU - she was promised the money and she should be trusted to spend it wisely

YANBU - she’ll fritter it away so keep control over it

She’s 26 not 6! 😂

I don't know many 26 years old who could be or have been handed that significant amount of money (what a luxury), let alone spending it well or investing it etc. Could you say you can put it towards her wedding/ kids if she wants to marry/be a mother? Or use it on the property still i.e. new carpets/ flooring/ stamp duty if payable/ garden refurb when they've moved in/ make the home eco with heat pump and insulation to reduce their bills long term etc

This!! My partner and I have this as he had more deposit to put down than me. If we split up he will get all of his money back and then anything above the deposit amount in profit we would split 50/50. MIL was worried I was a gold digger.

I agree - tenants in common is definitely the way to go (if OP's DD puts in twice as much as her BF for the deposit, she takes out twice as much as him from the equity when they sell it). @Youdontseehow DD and her BF will be able to afford an even nicer flat if she puts all of her £40k into the deposit, she won't be able to fritter any of it away, and her investment will increase in value considerably more than just putting it in a high interest account.
I also think you should give her the money, but discuss this option with her to make the most of it.

Maybe request it is all put into the property with a note saying this money is her deposit so in the event they split up she hasn’t lost it? He can still put $20k in now and get a lower mortgage?

if she is like me she will waste a lot of it

I seem to have a different opinion to others but I think you only gave the money to help the kids with property … so they only get the money if they are spending it on property. You didn’t give them £40k for them to decide what they wanted to do with it.

Ask her to buy the property first and you can give the remaining to her then. The money you set aside for your children has a purpose and it’s not really her money.

It’s your choice and don’t feel bad about it. It’s an incredible privilege to be given money and she should be grateful for it. I would certainly keep hold of it until it is ready to be spent on the new property and explain why you are doing this - focus on the huge positive this is. She needs to learn patience and gratitude, if she is in any way upset about your decision!

Absolutely not.
It was for property only.
I would be telling her that.
No I don't believe she is entitled to have it sitting in her account.
She needs to mature more.

My friends daughter frittered away 50k from her grandmother over 5 years while renting with her boyfriend. Turns out she used it to "treat them".
Her parents had believed her when she told them it was invested.

It all emerged when he cheated, they broke up and she asked to move home for a bit.
She has blown a house deposit, unlike her siblings and cousins, who are all using it to help buy a place at some point.
Her boyfriend encouraged her to do it apparently, but that is no excuse.
My friend is very annoyed with her and is taking hefty rent from her as a result.
She has been told she is not living off her parents at 28 and needs to grow up.
It really doesn't take long to fritter money away on take outs, weekends away, nights out.

She might be very grateful to you for holding onto it, in a few years.

I’d personally remind her that the offer to both of them was £40k towards a house deposit. If she wants it still, she can have it as a house deposit. I would then ensure she seeks the correct legal aid to ring fence her deposit and ensure that the house doesn’t complete before it is in place.

That's a good idea. Or maybe parents could have set up a family trust and both houses owned by the trust. With the trust being dissolved on the parents death and houses then distributed. That provides protection from any potential partners, including the chance of the parents themselves remarrying in future.

It's actually 80 when you add them together. Not everyone gets that amount landed on them, and what a privilege to be able to help your children. Most would need it themselves.

If she really is going to waste it, she will. She can borrow against the house or sell it and get the money out. You can't control adult children. Just how often you pick up after their bad choices.

My friend gave money to her two kids for deposits - one bought a flat in London the other, a house up North - she gave them different amounts - the London flat cost more, the difference will be resolved in the will. I think that's the way I'd do it too. Our kids will not be given money to do with as they please (unless we are dead) they will be helped with a deposit, but that is it. They are expected to know who to save and be sensible with money.

I'd say she should have learned by now before it involved £20k to play with.

She’s a grown woman. You should give her the money. If she fritters it away, don’t give her any more as you say.

This all the way and get her to ring-fence it if she can if she gets married. Hopefully your son does the same.

Same. And to everyone saying that's controlling her, banks have had accounts that you save in that can only use for property, scholarships have certain uses, willed money can have codicils its just life. OP has clear conditions and these should be adhered to in the 1st instance. They are actually not unusual. Going forward. You can't control what happens after house is bought, but at least you have done your best. Actually your daughter doesn't sound that bad with money.

Yes. Or stipulate in your will she gets it then if she doesn't rebuild.

Think the issue is the sharing with her boyfriend.

Has she run through the figures to see the difference in the amount of interest they'll be paying over the term of the mortgage between £90k and £110k as well as possibly receiving a better rate of interest? Could you do this with both of them present? The boyfriend will benefit from the savings created by a larger deposit too and it may make him more comfortable to have (ring fenced) uneven contributions to the deposit.

FWIW, I wouldn't be handing over the extra either. You've offered a house deposit, not free cash. TBH the fact she doesn't want to start with as low a mortgage as is available to her, shows OP is likely correct about her financial literacy.
She can choose to use all, some or none of the 40k on her deposit. Any leftover remains yours, although I would keep it separate to be given later should you want/choose to. I like the PPs suggestion of offering to pay the remainder into a personal pension for her though, and would consider that. I would also be keeping in mind that if everything goes wrong with the BF, the 20k you've held back could be used towards buying him out of the flat.

Sorry wrong thread

As you asked for thoughts :)

I wouldn't give her the 10k for the deposit now. It's for the deposit and not needed now. You can keep the interest on it.

Regards the 20k, I think she is slightly mistaken that 20k is going to earn much interest.

It would be better off going into a longer term investment like a global index tracker or putting a lump sum into a pension.

I'd give it but in stages. Just build in a pause for her so she doesn't go wild. Maybe give her 5k as cash savings, 5k as a gift when she moves in to help with furnishing costs, and suggest 10k to go into long term investment in stocks and shares in a global tracker.

10k in say 33 years at a rate of 5.8% which accounts for inflation (its been more like an average of 9-10% average growth in global trackers over last 20+ years), would give her 65k in future days money. So if they have decided to upsize their property and have a larger mortgage it would be a very welcome amount to pay off the mortgage. I'd even be tempted to hold onto 10k and do that for her if you think she will spend the money.

When money is gone, its gone and I think its difficult to comprehend the implications of this when you are young. Especially given that she hasn't saved the first 10k herself - I'd question how giving a large lump sum now without a purpose is going to teach the value of money - its a nice idea but she may not share your values. And IMHO learning the value of money comes from earning it then budgeting and saving your money that you earned which is a work in progress.

She’s 26. Time to let go.