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

oh and for the record once DH gets this job (he's nearly there - just has to get through a rather easy selection day - and it's stuff he used to train people to do so we're 95% certain he'll get it) we'll have outgoings of £1800 a month (including all the debts - approx , and income of approx £500 will be on debts - including the mortgage arrears) and income of approximately the same.

If my parents said "hey look why not use the £6k we've got in savings from your grandad's estate - meants for our DS's - to pay off debts" - we'd still say no. And our debts are similar to yours, but our income will be a hell of a lot smaller. And our mortgage will be around 50% of our income (was much less when we took it out I hasten to add - but unemployment has messed that up)

INteresting website here:
www.ifs.org.uk/wheredoyoufitin/

You enetr your details and it tells you how many people are richer / poorer than you.

Apparently most poeple underestimate their wealth - they think they are poorer than they are. They compare themselves to the ultra-rich so feel poor - even if they earn more than 80% of the population.

Of course this is just for the UK - if it was a global calulator, we would ALL be in the top 15% or so.

urghh that's depressing - we're currently in the bottom 6% of the population, and (if) when DH gets this job if I include TC and CB in the annual amount we'll go up to the bottom 8%

Hooray well good luck for your DH with the job!

You are living on a truly low income, so can rightfully feel proud of yourself for managing to pay off debts as well.

sushistar that website can't be right as it puts us in the top 6% and in the words of my daughter " we are the poorest family in Dorset"

I haven't rad all the replies. My thoughts are that if you put all the money in the accounts and it does not include gifts (birthday money etc from others) then, no, it is not totally immoral.

You thought you could afford the deposits, you can't and the whole family will benefit from being debt free. But if others contributed to the accounts then I think it would be wrong as they gave the money to your sons, not you.

Hope that makes sense and I do sympathise as we are in debt too and are considering selling a child as they have no savings either!!!!!

I'm sorry you don't agree with me, Someguy. I always tagged you as a very sensible member

When I say that people don't know what it is like to have money troubles when in a different income bracket, I am serious.

First of all, different salary levels come in different tax brackets. The OP will be in the 40% marginal bracket. Add to this that she won't be in receipt of lucrative tax credits (which, frankly, baffle me). It is very easy for someone on, say, 20k, to think that someone on 80k earns 4x as much as them, but of course that is not the case at all, or even close.

Also, the nature of Mumsnet is that most members experience changes in their economic circumstances. The scenario of buying as much as you can afford when you are childless becomes very difficult when you have your first child.

I know that when we bought our first house, we did the 3.5x first income and 2.5x second income for our mortgage. We had a few childless years when we had increases, but when we had our first child our finances changed dramatically. We could just about afford the childcare with minimal maternity, but with each child, the situation got tighter.

We, as a society, do not deny parenthood to anyone. We allow those who are quite unfit to be parents, but expect those who have overextended themselves financially to wait until they are well into their thirties. And these are the parents who are likely to have the best parenting skills and unlikely to produce future asbos.

Anyway, I imagine that most of the preachers on this thread receive substantial tax credits, so it is very easy for them to get onto their soapbox. It would be interesting to see them if they stood on their own two feet.

The OP needs to be encouraged, not put down at every opportunity. It is not the past that is important, but the future. She can only start from where she is now. Cutting back on spending is scary, so the OP needs as much support as we can possibly give her.

what utter tosh vblanc - we were (once upon a time) in the higher tax bracket (albeit only just ), the OP has already told us how much money is left over each month after bills and food - it's not rocket science for the rest of us, yes even us thicko's on benefits atm, to work out that it's a hell of a lot more than most of us could ever hope to have left over each month. Infact even more left over each monnth than most of us would ever hope to have each month for all our bills and food and "spends".

and it's only by the grace of god that some of you in that top bracket now don't suddenly find yourself down the bottom with some of the rest of us.

vinblanc - I've no sympathy with someone who's so flippant about money that she doesn't even know what she earns without doublechecking, and then finds that -oops - she underestimated her earnings by over 30%.

She's raking it in, judging from the info she's giving here, and still wants to raid her kids' money, because she can't be arsed to sit down and work on her finances properly.

Frankly, I just wonder how someone with obviously so little numeracy and sense of responsibility and such an air-headed attitude actually manages to find a job which pays so much for so little hours.

(Only talking about her job here, not about her husbands. I hope he'd tell her not to be so ffin stupid if she told him about her idea.)

I think a lot of people don't know exactly what they earn.

I was in the process of applying for a new credit card yesterday - 0% interest for 12 months, rather than actually needing to get into debt. I stopped when I had no idea of what DH actually earned after tax.

Before anyone rushes to criticise, we do live within our means, but haven't always. This is why I can empathise with the OP. It is very easy to justify extravagent spending - in our case, by getting a necessary kitchen in our new house (10k - relatively modest) and a car suitable for a large family (almost 20k, but when MPVs were new on the market, ao not much second-hand availability), as well as other new house expenses. Before you know it, you are 30k in debt. The interest charges are suddenly £500 per month which is a major chunk out of your income.

We are fairly fortunate that we have always been modest in spending even during fat years, but because we are a relatively large family, it is hard to limit our outgoings. We don't get any govt handouts beyond child benefit. I find it difficult to have a reasonable debate with anyone who does, tbh. I fund, they spend.

She did know what her husband earns, it's her own salary she had no clue of and underestimated by a huge amount. That's frivolous.

Spending 10k on a kitchen isn't modest. It's a luxury.

As for government handouts, you're not the only one who's paying taxes and thereby funds the system.

and fwiw even WITH tax credits our income (including CB) will be under £2000pcm. The same amount that the OP has left each month. Family of 5, same level of debt as OP.

quite frankly I hope you don't suddenly find ourself on the dole - but it's going to be a hell of a hard fall for you.

There are many people currently seeking work, and living on government handouts who were once sitting on that little perch that you're sat on.

, and FWIW Tax Credits aren't "benefits" that are part of the welfare system, they're ermm, tax credits. You don't get tax credits unless you're paying tax.

Believe me, 10k for a 5m x 4m kitchen when it is basically non-habitable (no cooking or washing facilities) is modest.

But we did it by ourselves. No handouts.

oh gosh missed the "modest" 10k on a new kitchen

Alwayslooking,

An awful lot of people are receiving tax credits that are in excess of what they actually pay in tax. That is why it is a stupid system that I hope the next govt jettisons into space.

10k for a kitchen that you did yourself - and you still call it modest PMSL.

We had contracters - who paid VAT. Admittedly, not everyone does.

DH didn't do the work because he was earning the money pay for it, and I had look after a small baby and some toddlers.

vinblanc, as someone who currently can't even dream of saving up for a deposit, but who's renting in the private sector (without housing benefit, before you ask, but a small amount of tax credits) and has a very small galley kitchen I really can't imagine the burden and hardship you face in home-ownership.

I think you need to come and join the rest of us in the real world.

And stop being so bloody patronising - you know there are some not very bright people earning a lot of money, and some very intelligent people "scrounging" at the bottom. Lets just hope you're cushy little job doesn't fall out from underneath you or you'll have the pleasure of living on the same amount of money (or perhaps even less) that the OP has spare each month,

It's not really rocket science £5100pcm income is a hell of a lot more than £1800pcm income (and that's including the "generous" tax credits - which are frequently fucked up, the child benefit - which you and the OP both get, and a little extra that I get - well I don't at the moment as the benefits are adjusted accordingly)

WW, when we bought our first house, it was about 95% mortgage and the rest a loan from the inlaws.

When we traded up (necessity due to growing family), we had to put our moving costs and solicitor's fees onto a credit card. When we walked into the house, we realised that a lot of work was needed to make it habitable.

Every bit of debt we took on was totally justified. As a consequence now, we are very debt averse, but realise that there is a time and a place. Looking back, we are very pleased with our house purchase (we are in the same house 12 year later), and figure that it was worth the temporary pain.

Hopefully the OP will grow as a result of her experience of debt. We certainly have.

She needs our encouragement, not our condemnation.

so you didn't do the kitchen yourself - make up you're mind.

And not sure why you couldn't do it with a baby and toddlers. It's not unheard off >> (my mother always was slightly dotty though )

And just remember - when you're old and being looked after in your private nursing home, don't expect great care if you want the tax credits abolished (or indeed if you end up in hospital, even a private one). The workers are already earning peanuts - you take away their tax credits and their incentive to look after you well will me even less

This attitude to debt is what got the overall economy into deep shit in the end.

I rather keep renting than gambling like you did.

you spent 10k on the kitchen 10year ago.

fark me - we had a couple of quotes for a similar size kitchen to be completely ripped out and redone about 5yrs ago and none of them reached 5 figures. 10yrs ago I'm sure we'd have got even better prices.

And I'm afraid I disagree with "well we needed to make the house habitable" (I like the way you took a loan from the inlaws ). Guess what - this house needs to be made habitable too (a wet bathroom wall that's not supposed to be wet, and we suspect also a wet kitchen wall behind the units and tiles), actually can't be arsed to list all the stuff we need to do to the house to make it properly habitable - will take too long.

Basics are there (just ) but the rest will have to wait until we have money - not credit - to get it sorted.

and I don't buy the "we had to trade up because of growing family" - plenty of families live in houses that are "too small" for them.