to cash in my childrens savings plans?

[kaz33]

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

You may think you can afford the lifestyle now but you couldn't afford the lifestyle when your income was less which is why you have the debt. The worry I would have is that now that your DH is earning more he probably thinks he can spend more/deserves to spend more.

I personally think you should use some of the savings to pay off some debt. It is ridiculous to be saving whilst paying huge amounts of interest on debts. When you have cleared off the debts you will be in a much better position to start saving for the children again should you choose to do so. (Have to say I am not in favour of saving lump sums for children though.)

Then you need to sit down with your husband and work out a plan to clear your debts as soon as possible. It can be done. But you both have to be on the same page. No point you cutting back if he is still spending.

Menu plan. Shop in a cheaper supermarket. Buy produce in season etc etc. You are an educated sensible person. You can do this. Look on it as a challenge. It can be boring if you think of it like that. But it would be so worthwhile.

You were very brave to air your problems here, Kaz.

It is difficult for people who are living on government taxpayer handouts to understand that other people have money problems.

We all make mistakes in our younger days. With years come wisdom. When money is involved, the problems grow very gradually, and then suddenly you realise how unsustainable your sitation is and how toxic debt can be.

I know that we have had debt problems, all for very good reasons at the time (house move with unworkable kitchen; larger car due to new child; ditto losing second income...), but then you realise that it has to stop. However, it is difficult to turn it around overnight. It didn't happen overnight and it won't be solved overnight.

You have done totally the right thing in order to focus your mind on the problem. Don't worry about judginess - when you point the finger there are four fingers pointing back at you. Just do the right thing by you and your family.

Be confident that you will get through this within a year or two, and then you will be free to live the rest of your lives.

You need to start by going through your standing orders and DDs with a fine toothcomb and work out where all your money is going every month!

Bloody hell.

You need to work out exactly what is going out I go through our bank statement and note down every direct debit and standing order. Tot it all up then work out how much you need for essential petrol. Menu plan, go to Asda/Lidl rather than Sainsburys or Waitrose. Explain budget to dh get him on board. He only needs one c.card for expenses, he should ONLY use it for expenses he needs to keep on top of it and pay it off each month. Shop around for 0% card deals, transfer as much as you can onto these.
TBH if your dh is that rubbish then I would be tempted to allocate him some spending money each month in a separate account and restrict him to that. Think of it as a 2 year spending diet. It will be hard but you can pay this back quite quickly then be able to put it behind you and live within your means. Gutting to see so much go on repayments each month.
I am quite that you managed to get into this much debt with that much money, but am in no position to judge currently trying to pay back 20K with about £500 left after direct debits...

You need to look at your monthly savings as another regular outgoing, not an optional extra at the end of the month 'if you have anything left over'. Set up a standing order to start overpaying the most expensive debt first so the money goes out at the start of the month, then you won't miss it.

Definitely look around for a better mortgage deal when your fixed rate comes to an end, you could save hundreds a month doing this (which should then going into paying down other debt, not extra cash to spend). You could always put your children's savings accounts into an offset account so that its helping reduce your mortgage interest but you still know its there for them.

If your DH gets bonuses, don't spend it before you get it. Its a bonus, so don't expect it.

YANBU to think about it but, frankly, I wouldn't. Until you can sort your attitudes to spending you are not going to be able to commit to paying it back (which you absolutely should, if you borrow it).
I am in a similar ish dilemma. I have also lived above my means in the fat years, and now part time, DS, etc, trying to pay it back will take forever. DH also has some debt so we brought debt to the marriage. I am getting a small inheritance which is from a much loved aunt, and which is specifically for a deposit on a house (think she wrote her will 20 years ago TBH!) but I could use 3/4 of it to wipe out both our debts which include credit cards at high APRs. I think I will do that and we will try to pay back what we were paying to the debts. I am aware that some months we may choose not to do this, or may have unexpected costs (car or whatever) so it may take a long time, it may never all get put back. But the only people we would be hurting would be ourselves. However that money got there, it belongs to your children and so you should borrow it, not take it. If you can't be sure it would all go back, then you must cut down your costs to save that way. If you are on a good salary that should be possible. How much do you pay in car insurance for example? If you got smaller cars would you save a lot that way? Do you have a bells and whistles sky package or freeview? Can you get PAYG mobile phones with free calls to each other?

I would leave the childrens savvings alone unless you absolutly have no other way of getting your debts paid off. At 18 they could use the money to pay towards university if they want to go. How do you know they will blow it.

even with your new calculations - you should have at least £1k left over a month - so put this towards the debt EVERY month

and in less than 3years you will have paid off your debt

if you are lucky you may get another bonus which should go ALL on debt - bonus's are money you dont normally have so dont miss

DO *NOT spend your bonus before you get it

Fucking hell. Just read how much money you have left over. Fuck me. Sort yourself out - that's ridiculous. You are really very well off.

I've just read that you have £2K left over a month. That is about as much as we have coming in a month and we have to pay all our bills out of it. DD2 is about to start uni and we are paying for her accomadation which we can just about afford as we are using some of an ISA we've got for that. No way would I spend 22K on food, clothes and treats in a month.

If you jettisoned the gym and Sky how much would you save a year?

I work at a building society and have seen this in the past with people wanting money out of childrens savings to repay debts. Most banks and building societys will not let you just cash in the policies and take the cash for yourself. Where I work, if your closing the childs account, they will only write a cheque for the balance made payable for to the child, and if the balance is going for cash, you must declare that the money is for the benefit of the child, and to use it to repay the debt would not be acceptable.

I know where I work have allowed it in exceptional circumstances, but it must be wrote in a letter stating all the money will be repaid to the child, and if the child is over the age of 7yrs, they must sign also as its their money. These rules are in place as no bank or building society wants a child in 10 years time wanting to know why they allowed the parent to withdraw money that isn't their's. You are simply there to sign and act as a registered contact, but in the eyes of the law, its the child's money. The tax man wouldn't look too favourably on it either, if you they have been recieving gross interest on their accounts and then the money is used for your purpose- this is classed as tax avoidance.

YANBU- I would do the same if needs must, but I'm just trying to point out, it may not be that easy to just withdraw the money and clear your debts.

Excellent post sarahken.

OP I assume you would be calling the revenue to pay the 40% due on the interest if you do use the savings.

Sarah, I had no trouble taking money from the children's account that I had set up.

I know its already been said but WTF!!! You have 2k left over and are still crying about your debt.

Pay it off at £1k a month and you will still have some left to lead your not totally extravagant lifestyle (only a meagre £1k though, would you manage? )

Now you have revealed that you cannot be justified in taking your kids savings unless you fully intend to pay it back but I doubt you will.

People like you piss me off. You can pay your debt back easily but refuse. There are people out there who off themselves because they cannot see a way out. You have one.

Grow up you big kid

Kaz - get yourself some Alvin Hall books before you do anything.

Try deal with the debt - knock out style.

Also try save up to 3 months income. That way when you deal with your debt you will always have a fall back position and not be tempted to go into your kids savings.

GOOD LUKC

99www.google.com/products/catalog?client=safari&rls=en&q=alvin+hall+books&oe=UTF-8&um=1&ie=UT F-8&cid=10848588399962434312&ei=jhKiSpvuEMKf4gbDqCIAQ&sa=X&oi=productcatalog_result&ct=result&resn um=13#ps-sellers

oops the link is not right - anyway best of luck with it all.

Kaz, please get yourself on to MSE and the Debt Free board, be prepared for some straight talking from the guys, but as the ladies have said you can do this with some work.

DFW

Do you SoA and put it on the boards

SoA calculater

Format it for MSE and post it in a thread on the board.

Get yourself aquainted with the MSE boards they are the best.

am i the only one who thinks this is an aibu by stealth?

you read the op first post and think, poor her,she is in debt and very worried and is struggling to pay back the money and has serious money issues, and wants to raid her kids bank accounts to help not lose her house eventually etc

only to find

that the op has more disposible income then many oh here total income per month YET still cant save/pay off debt

£1k a month will pay loan off in under 3years and you still have enough money for food,clothes, gym etc

Of course this is an AIBU by stealth, and I am a bit puzzled as to the posters above ^ who are still giving advice to OP on how to deal with the debt, like OP has about a quid to survive on after bills etc. OP has a cool £2k left to play with FFS!!

Would be interesting to see the MSE consensus on having a debt and £2k 'spends' left after bills each month. Wonder if she will go all giggly and girly like she has on here with the hair twirling and the "I know I need to grow up teehee" bullshit.

ugh. this thread made me quite

Can't understand how people manage to live outwith their means in this way.

it really is not rocket science, not spending money you do not have.

I had a friend who was in a similar situation, he was making about £100k/year and his wife was spending money like it was going out of fashion, his salary dropped to 'only' £45k, and I eventually found out they had one of those evil 25 year 'are you a homeowner' loans, which leave you paying off a tiny amount of debt until you die at some usurious rate. And then he bought a brand new car and said how he'd got a great deal, but paid no attention to the rip-off finance the car company was offering him.

Unless you're living on a tiny income, or have locked into financial commitments that are no longer affordable due to unforseeable changes, such as ridiculously outsized markets, there really is no excuse for this. It is simply childish.

When we were rather less well-off than we are now, we had less than £1k/month to spend, excluding rent, but including everything else, and had £10k debt, so we accounted for everything, to see where the money was going and to make sure that outgoings did not exceed income.

Not impressed by vinblanc's comment: "It is difficult for people who are living on taxpayer handouts to understand that other people have money problems."

Earning lots but still ending up in debt is nothing to be smug about, and it certainly doesn't make you superior, rather it makes you an idiot.

typo: 'ridiculously outsized markets' should read 'ridiculously outsized markets'

argh: 'ridiculously outsized mortgages'

SomeGuy - totally agree with your last 2 paragraphs.

And having read the thread - if you've got that much money left over each month - don't touch their savings. You don't have to add to it for now - you need to drag yourselves (your DH especially by the sounds of things) into reality and sort out the debts.

We're currently paying off over 30k of debt, it's bloody slow going at the moment as neither of us are currently working (hopefully going to change as from next Friday - fingers crossed) but I wouldn't take the kids savings.

We did that many years ago when we were still extremely shit with money (but before we got into the huge debt we're in now) and it got us absolutely no where as we didn't sort out our finances properly/

Goodness, we have a car, an ('only' 3 bed according to OP) 3 bed house, a ds, and we live on 2.2 k per month after tax - the 2 k covers mortgatge, bills, clothes, food, car, savings, everything. We have no debt except mortgatge and student loans. If we couldn't afford to live we would sell car, then house, rather than get into debt. I'm allergic to it. I would consider us well off compared to most people in this country.

The average UK household income before tax is around £33000.

If you earn more than this you are 'well off'. You should not be in debt IMO (unless some awful disaster happens!). The OP earns so much above this it is ridiculous that she's not willing to pay off what she owes, for her children's sake if nothing else.