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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

to cash in my childrens savings plans?

237 replies

kaz33 · 04/09/2009 14:36

We are in debt, for several years since the boys were born (8,6) we have been struggling with debt. I gave up my lucrative job and we bought a house we could not afford (only three beds but nice area)

DH just got a £20K bonus, and have just paid off over £10k. We are roughly £30k in debt but finally we are earning enough to maintain our comfortable but not totally extravagant lifestyle.

The boys have got about £7.5k in their savings plan I want to cash them in and pay off some more of our debt.

Is this totally immoral ? What would you do?

I'm not scared of harsh words

OP posts:
Lizzylou · 04/09/2009 14:39

Erm, no I really wouldn't do that.

What did you do with the reast of the bonus?

If you can pay the debt off anyway, why even think about cashing in your son's policies?

AramintaCane · 04/09/2009 14:40

I think it would be very wrong it is your debt not theirs.

Jas · 04/09/2009 14:41

In the circs you describe, no I wouldn't.

NeverLeapfrogOverAUnicorn · 04/09/2009 14:41

I think it depends how serious your financial problems are. It's all well and good your kids having savings, but if you have their savings sitting there while you lose your house, have ccjs etc then you aren't actually being a very good parent! Because while it's nice to have some money to give them when they are grown up, your first duty is to them as children!

although - If your dh just got a £20k bonus, why didn't you pay off £20k of your debts if they are so serious you are considering cashing in the kids savings?

If you had done that, you would have had a £20k debt.

And if you are earning enough to have a 'comfortable' lifestyle, you could probably look at your budget to see what could be cut in order to pay back this money.

so, in the end, I think that if you are in serious debt and in trouble and have no other way out - cash in the savings. If you have other money coming in - use that!

Lilyloo · 04/09/2009 14:43

Agree with neverleap

rubyslippers · 04/09/2009 14:44

why didn't you use more of the bonus to pay back more of the debt?

GrungeBlobPrimpants · 04/09/2009 14:45

No - your debt, you got into it and have to learn to manage it. I think the crux of the problem is for you to learn to live within your means (I mean that nicely) - prioritising, budgeting, cutting back. If you have a 'comfortable' lifestyle you should be able to do that.

pjmama · 04/09/2009 14:49

If the bailiffs were knocking at the door, then taking your children's savings as a last resort would probably be sensible. However, if you're already living "comfortably" then maybe you could tighten the belt a bit more instead?

Also it probably depends where their savings have come from? If it's money that you have put aside when times were easier, then it's maybe more acceptable than if it's money from another source like grandparents. If it was never your money in the first place, then you shouldn't spend it.

GibbonInARibbon · 04/09/2009 14:54

Would have to be in dire, dire straits to even consider this. By that I mean literally no food, no heat etc.

melmog · 04/09/2009 14:55

Agree with the others asking why you didn't pay off more of the debt with the bonus?

Also think though that looking after them now is more important than having money sat in a savings account. So if you are in serious trouble then yes, you should use it.

I may only think that as we can't afford to save for ours though. Every penny goes towards paying off debts and surviving.

My parents never saved for me or my brother either.

shinyshoes · 04/09/2009 14:57

I rthink you are being a little unreasonable.it's not their debt. Being 'comfortable' to some people at the moment is a luxury.

Do you still have luxuries? By that I mean going out, takaways, a bottle of wine here and there? If so you need to cut back on the luxuries a little more to get yourselves out of debt.

Where is the rest of the money? Couldn't that be used to pay of any debt as well?

If you've cut back as much as you can, living on the minimum, budgetting and affording only the bare essentials and then still financially struggling, the yes I probably would but only when I've exhausted all other avenues.

I'd then pay every single penny back with interest lol.

diddl · 04/09/2009 15:17

No, you shouldn´t touch your children´s money.

20,000 bonus and it wasn´t all used to pay debt.
Bought a house you can´t afford??!!

Sounds as if you´ll never be out of debt, and if you use your children´s money, they´ll never get it back!

LuvLee · 04/09/2009 15:49

How has the children's savings been accumulated? Was it money from you and your husband? If yes, I don't see why you shouldn't use it. The kids are only 6 and 8. Get yourself out of debt, and when you are financially stable you can start saving again.

MichKit · 04/09/2009 15:50

Where did the children get their money from?

If it was you that saved it from your salaries, then YANBU, you should pay off your debts before saving money, especially if your debt is incurring interest and interest from savings is not covering it. Plus, the interest rate on savings is shite at the moment.

If the money was paid in by other people, ex: GPS, uncles, aunts, rellies, then yes YABVVVU, and you should not touch the money as its not yours, its your children's.

bronze · 04/09/2009 15:51

Agree if its just money you've put aside then its different to if it was from relations

Blondeshavemorefun · 04/09/2009 15:57

yes you should have used ALL of bonus- that what bonus's are - money thats extra - so something you wouldnt have had so not missed and to be used for holidays/etc

what did you do with the other £10k - and wow to have a £20k bonus

but i disagree with all the others

i think you should use the children savings to try and get out of debt - as long as you repay them

so the money that you would pay each month to debt to go into their account

reason for this is that the interest you pay on your debt will be much more than the interest your children get on their money

TrillianAstra · 04/09/2009 16:00

If the children are not going to have access to their accounts until they are, say, 18 anyway, and if you are certain that you could put back the money (with appropriate interest) before that date then you should go ahead and do it.

Original poster
kaz33 · 04/09/2009 16:01

Sorry that is £20K and after tax that is £13K so actually we have paid off as much as we can out of the bonus.

The money in the savings plan is mostly money that we paid in, although we probably couldn't afford it at the time . Some of the money is the odd cheque that people have given them. So it is mostly money that we have designated as being for them IFYSWIM.

And DS1 has almost twice as much as DS2 as I stopped paying in when I stopped working full time when DS1 was 4.
So realistically I would have to top up DS2 savings or cut DS1's.

I would love to keep it and continue adding to it, but at the moment we have debts, a large mortgage and no savings. Yes we have been profilgate with money in the past and now are finally in a position to make some inroads into it.

OP posts:
Blondeshavemorefun · 04/09/2009 16:04

dam the taxman

use the money to try and cut out down the debt

do you have a monthly plan/dd that you pay each month towards the loan?

SouthMum · 04/09/2009 16:08

YABU - I am making a wild assumption here so please put me right, but I would guess that if someone is in a job that gets a £20k bonus then their basic salary must be pretty good??

Also the wording of your post is a bit....??? You say the house is "only a 3 bed" as if a 3 bed house is in someway...I dunno what the word is I am trying to find but you see what I mean. Also your lifestyle is not "totally extravagant" which suggests there are some things you could probably live without.

If it was me I'd see where I could cut back and if I HAD to use the money from the savings but pay back every single penny. However you'd still be left with a debt....

What did you do with the other £10k

Original poster
kaz33 · 04/09/2009 16:11

I think that it is a totally rational thing to do - however my worry is that we pay off debts and then accrue more of them

That is my real struggle, how do I change the pattern of the past?

Anyway, I think I will talk to DH about it. Maybe set ourselves a debt reduction target and see if we can meet it.

OP posts:
Jofo · 04/09/2009 16:11

I agree with BlondesHMF (especially about the taxman) and think that you should use the kids money. Once you are in a better financial position, then repay them. In the short term they will benefit by not having you so stressed out about debt and that can only be good for the whole family.

shakirashakira · 04/09/2009 16:11

Why are you asking us?

If you thought it was a reasonable thing to do you wouldn't need the validation of strangers.

moondog · 04/09/2009 16:13

Therein lies the superb irony of AIBU Shakira.

Jofo · 04/09/2009 16:14

I understand that the Citizens' Advice Bureau are really good at helping restructure debt etc.

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