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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:
Original poster
kaz33 · 04/09/2009 17:12

£70K salary DH + bonus and me £13K - huge salaries

DH has only been earning this for a couple of years.

Our "extravagant lifestyle" is a 3 bed semi, 2 cars (so we can both work), no holiday last year, camping this year. I don't really buy clothes other than for work, make up etc.. I buy DH clothes on ebay. Our weaknesses are food and maybe one takeaway a month, family days out. Yes we are bad with money, DH worst than me. Yes I want to get better.

I personally have been struggling with this one so that is why I asked.

OP posts:
Lizzylou · 04/09/2009 17:15

If you thought that your DC were going to blow the money why set up the savings plans? You seem to have already decided that your sons will be wasteful with money when they are only 8 &6! You teach them about the value of money, then they won't blow it.

I think that you need to address how you spend your money and see what you can do to change your mindsets. Because that is an awful lot of debt to find yourself in despite earning good salaries.

If there is any way round it, I wouldn't take the savings.

Lonicera · 04/09/2009 17:17

I agree with sherby

SouthMum · 04/09/2009 17:18

So it sounds like you have no intention of paying their money back when you say "what exactly are they going to do with 4 grand when they are 18?" (and LOL at "blow it" - oh the irony....)

Buy a car so they can get about if want to get a job instead of going to Uni?
Pay for a deposit for a house?
Use that to pay for Uni instead (would be the sensible option)?

Suppose its not too bad if you pay it back but I am still a bit - think you should at least try and cut back on your not totally extravagant lifestyle first.

londonartemis · 04/09/2009 17:19

I really agree with Sticky Little fingers...you must not touch your children's money, because frankly, the problem is your spending, which you don't seem to be tackling with any great seriousness.
My husband and his siblings lost money left to them because their parents made them sign it over to them to help pay off family debt (ie the parents' overspending). The resentment is still there today.
Children are hugely expensive in a family and you will not be the first to have to adjust your lifestyle and spending because of the added costs.
Earlier post pointed out that they shifted 10K in a year through sensible spending. Set yourselves a challenge and try that instead of raiding the piggy banks.

vinblanc · 04/09/2009 17:19

If you have £30 - 40k debt, you will be paying a fortune on interest. I can understand that your life being very modest.

Without knowing too much about your situation, I would take about £6k out of your children's account to start reducing your debt and to save some interest. The reason for leaving £1500 is not some sentimentality towards your children, but to give you an emergency source of cash in the future.

Cut up your credit cards so that you do not accumulate further debt.

Consolidate any debt you have onto a 0% interest card, which you subsequently cut up. Set up an automated payment for the monthly minimum so that you don't get stung should you forget a payment.

Set a tight, but realistic bill for food, utilities, etc. Take out pocket money in cash and use that for discretionary spending.

Think about if you have anything you could sell.

Original poster
kaz33 · 04/09/2009 17:20

Lots of food for thought and totally agree about teaching them about the value of money and realise that we need to change.

And yes, if we had no debt and got a £13k bonus then we could pay the boys back easily.

This is how bad my partner is with money, years ago he bought a 20K new car with our money without asking me. Then presenting me with fait accompli and no although we could afford it the money could have been better spent.

OP posts:
GoAwayMrWappy · 04/09/2009 17:21

I have used my DSs savings (all put aside by us) when necessary but have subsequently paid it back. If you can do the same then I don't see an issue.

diddl · 04/09/2009 17:21

Do you really need a car each?

Thunderduck · 04/09/2009 17:22

If you haven't done so already then join the Money saving experts forum

lifeswhatyoumakeit · 04/09/2009 17:23

at posters who say OP shouldn't touch her children's savings! My parents never had any savings for us, I'm sure a lot of yours didn't either - what is so different about these children? We all managed somehow in adulthood without these savings. Get real!

Of course you should use your children's savings to reduce your debt and save interest payouts.

SouthMum · 04/09/2009 17:26

I'd have a serious talk to your partner as he sounds very immature.

If you clear this debt you are just going to run more up by the sounds of it unless he really changes his ways (and you)

Have you asked your parents if they can loan you the money?

Thunderduck · 04/09/2009 17:27

I think using the savings would be the equivalent of applying a plaster to a huge gaping wound.

The OP and her dp need to learn how to budget and keep control of their finances. It's a long term problem.

londonartemis · 04/09/2009 17:27

Didn't know about this website, Thunderduck - thanks!

Wonderstuff · 04/09/2009 17:29

We have always struggled with debt. When someone said there are two ways out of debt - earn more or spend less it was a bit of a lightbulb moment. It is really dull but you need to get a handle on your finances, write down everything going in and everything going out. Then go through all your bills and see which can be reduced, there are deals to be done everywhere. Work out how much you need for food, petrol and other things, either take that amount out in cash every month or write down every time you use your debit card and keep a running total. Cut up your credit cards, cancel any that are paid off so you resist the urge to order a new card.

I think the idea of keeping a grand for each child and using the rest for debt is sound. When in a couple of years you are free of debt you can then use the money saved on repayments to go into a nest egg for them.

Like someone else said the key thing is to work out why you got into debt and change something. My dh has had lots of breaks in employment everytime we spent on credit to maintain lifestyle, we also went on holidays on credit. We have made a decision not to go away unless the money is in the bank, to save for a rainy day and at the moment, dh is out of work and we have, rather than buried head in sand and hoped it would all work out, looked at what is going to go out, spent as little as possible and not used evil credit cards at all. I really feel we have turned a corner, but it is a miserable slog paying back thousands of pounds of debt.

Thunderduck · 04/09/2009 17:31

You're welcome.

It's very useful.They have sections in the forum on every possible aspect of finances including working your way out of debt and how to reduce your grocery bills.
They list discount codes, the best deals, supermarket specials, review on brands etc.

Original poster
kaz33 · 04/09/2009 17:32

No agreed it is a long term problem for the last 11 years (since I met DH).

Before then I lived within my means somehow together we aren't good for each other. We will find the money for Uni and no doubt a deposit for a house at some point in the future for them. But at the moment we need to be debt free because it is crippling us.

Thanks for all your thoughts which although you might not believe I am taking on board.

OP posts:
SouthMum · 04/09/2009 17:32

Lifeiswhatyoumakeit - my parents didn't save anything for me because they couldn't afford to at the time. OP could, because they did - thats the difference (for me anyway)

Oh and I am real by the way

pasturesnew · 04/09/2009 17:33

I can see how the debt arose etc. while your mortgage is high and the salaries have only gone up recently but would you mind telling us about childcare costs etc. please e.g. are the DC in private schools, what about before and after school?

Is there any reason over the next couple of years to think that you will have more disposable income anyway to help pay off the debt and so on, e.g. have you got a fixed rate mortgage that will come to an end and you can get a better deal, or could you or DH realistically expect a promotion, would an au pair be cheaper than current after school care etc.?

Also have you considered going back to work full-time, and if not, why not really in these circumstances? Or even to a better-paid job? The kids are in school full-time, after all.

Sometimes it can be easier / more effective to earn more than to save more.

Are you (even if subconciously) expecting your parents to bail you out ultimately and if so, maybe think about this properly - talk to them about it, talk to DH, how do you all feel about an expectation like this? I am not saying this in a judgy, "you're still a teenager drawing on the bank of Mum and Dad" way, as I can believe it might be quite possible that rich parents would rather give you wodges of money they're not using and have you come on holidays and to restaurants with them than see you struggle to juggle "a lifestyle to which you are not accustomed".

I think you should factor all these in and do some proper longer term financial planning because taking children's savings seems to be a quick fix and will not actually solve the problem if you will still be £20k in debt going into the new year.

potplant · 04/09/2009 17:34

And yes, if we had no debt and got a £13k bonus then we could pay the boys back easily.

But you're not really making it better.
For example at Christmas when you're a bit fed up with frugal living, you splash out the basis that 'when we get the bonus we can pay it back' and it goes on and on.

you need to take the advice you've been given, get some proper debt counselling.

Lizzylou · 04/09/2009 17:35

Have you "good" cars now?
Could you maybe downsize them?
Get cheaper makes/models, an older car? Smaller engine size/less insurance/more economical on fuel?

But yes, what worries me is that your boys are paying the price of your overspending, and I appreciate that you have made sacrifices/may not be being extravagant now.

SouthMum · 04/09/2009 17:36

Have you asked your parents if they can loan you the money?

WidowWadman · 04/09/2009 17:38

To me cashing in the children's savings plans is stealing from them, nothing else. Just because it was you, who gave them the money in the first place, it doesn't mean you can take it from them at will.

I pay into my daughter's CTF and one of the features about it I like is, that noone but her can access it, so there wouldn't be temptation even if I needed it.

diddl · 04/09/2009 17:39

Also, now your hubby is on 70,000 , all the extra should be going on the debt.

WidowWadman · 04/09/2009 17:40

70k salary plus 13k is more than 3 times our combined household income.

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