We've massively overstretched ourselves. Would it be ok to borrow from the DC savings? Has anyone ever done this?

[Parsnipsandginger]

We would put it all back over time. The plan is for DC to have their savings (from us) when they are 18. That's 5 years away yet
We urgently need to find £2.5k

Thoughts plse

Depends on how and why you've 'massively overstretched' yourselves and what you plan on doing about it beyond raiding the kids savings.

If it's borrow from the kids instead of sacrificing alcohol or takeaways or a holiday or the new kitchen, then no, absolutely not, tighten your bloody belts. If it's a unforeseen emergency, and you prioritise paying it back immediately by sacrificing luxuries, then maybe. Which makes it your emergency fund; you have no savings for your children.

If it's scrambling to meet regular payments, then no, make the hard choices now instead of next month. If it's a genuine one-off, then maybe.

If it's money others have given them, that they know about, or have worked for, that they manage themselves, then no, they will judge your poor financial planning and every tiny unnecessary expenditure you make before paying them back. If it's money that is invisible to them, that will be replaced without them knowing, then maybe.

And so on.

Where did the money come from? Do the kids know they have it? If it's money you put in that seems reasonable to me as long as it is for essentials and you can't cut back elsewhere.

Money from other people that the kids have put in there then I think you should let them have a say - you saybits fornwhen they are 18 and that's 5 years away - so they are old enough to have a say.

If you need money to keep a roof over your head, heating food etc then yes you’ll have to use the savings put aside for the children I suppose. Not much point them having savings if they don’t have a home or food!!

However I would look at all other possible options first. Eg selling TV from your bedroom, one off cash in hand work, borrowing from your own parents if possible. I also wouldn’t use the children’s savings for anything other than the essentials - not for holidays or swimming lessons etc.

Do the children know about the savings? If so I think you’d have to talk to them about using them.my parents often used my savings growing up or borrowed my birthday money. Thinks like that have to happen when things are hand to mouth. It’s not ideal but it’s better than loosing a home or not having food in!

thanks for all the replies. To confirm:

It's around 95% our money that we have put aside, with maybe £100ish from GPs.
The idea is to give savings to DC at 18 (alongside child trust fund) but subject to maturity/circumstances etc at the time. DC is currently 13.

DC has no idea about this money.
We would pay it back at £100 a month, plus the usual monthly amount we pay into DC savings, So we wouldn't be stopping the monthly savings for DC.
The money issue is a short term cash flow problem and relates to an unexpected inflation of general expenses we've had over the last few months. This is not COL inflation. It's things like a pair of £500 glasses (that was the cost of the lenses, we already had the frames), then DC both needed new uniform plus shoes and blazer each. The car needed repairing. We had to have a plumber out to fix a water leak and then pay for the water damage to be repaired, plus other stuff.
Tbh, it feels morally wrong to use the money and it would be an absolute last resort. It's an option, but not one that we want to utilise unless really necessary.

Recently young son's savings of £4k were sat in the bank earning little interest- our mortgage rate was nearly double the pittance he was earning. So I emptied the savings to overpay the mortgage. I'll put it back when I can plus interest.

If the OP/parents has put the money there originally then I can sort of see the argument that it's still parents' money.

But if it has come from relatives or premium bond wins etc it isn't her money.

At least she's being honest that she overstretched herself. But that makes me wonder if the money will be returned. Is this a short term issue or a long term one?

I've never been in this situation so I can see if you need a new boiler now and the money is sitting there you will want to use it. But DH said his PIL "borrowed" from his sister and never paid it back.

Of course you should. It's your money.
Btw - is this an English thing? I don't know anyone who sets up children's bank accounts. They just sort of pay as they go. If they have money spare then they will give it or lend it to their adult children as needed but no special account. Most of my friends would be considered relatively well off too ( not wealthy but kids in mid-level private schools, pets, o/s holidays , nice cars, lovely home etc.) But I am not in England so that may be the difference.

Ok I've seen your update so actually you haven't overstretched yourselves, you've had unexpected expenses. And it's your money. Well do what you think is right.

Those are all expenses that could have been anticipated and should have been planned for. You need a budget. Including an emergency fund. Only then rebuild the kids savings.

It isn't ideal but my parents did it. As long as it is for a reasonable expense (e.g. daily life necessity - food, car, house bills) not a holiday.

I don't see the problem with borrowing money from children's accounts. Ex husband and I borrowed both children's savings to put towards a deposit on a BTL property. We paid them back before they turned 18. So long as you pay it back, I don't think it matters a jot where the money came from in the first place. People are so pious on here. If you were either proposing not to pay it back, or knew that you would never be able to even with the best will in the world, that would be a different story!

We did due to bank cock up when moving house. We would have lost our house we were buying otherwise, it was around £7k, I’ve increased my monthly Direct debit to the savings to pay it back, outs a fund for college do not needed for another 7 years.

It's your money so of course you can use it.

But it sounds as if you need some better saving plans anyway, without this glitch.

Not sure how old you are, but saving monthly for your child when they reach 18 is all well and good, but you should also have enough saved to cover non-expected outgoings - and (I know some will disagree) - £2.5k is not a lot of money to have saved.

It looks as if you are putting the cart before the horse- saving for your child yet not managing your own savings. £500 etc for new glasses should be affordable out of a rainy day pot.

Your child needs help to manage their own money because when they are a little bit older they can get weekend work and save for themselves. It's not your role to provide savings.

I'd also query your idea of a trust fund and if you mean the real thing? We discussed one with our FA (to try to minimise Inheritance Tax for out DCs) and it's really only worth it for very large amounts of money as it grows slowly and there is a lot of red tape about accessing it.

Exactly what @Stravaig says.

Your budgeting is not there.

You need a rainy day pot where you save each month for yourselves, for the unexpected.

If you can't do this, you are living beyond your means and need to rein in your everyday outgoings or increase your incomes.

I would borrow the money as it is needed now.

But maybe stop paying extra into a savings account for them each month seeing as you are financially stretched? Just repay what you owe, don't feel the need to build up their savings when you are barely managing to break even. Things will get easier financially in time, but maybe you can't afford it right now?

Other than the leak and perhaps the car repair, the rest of those expenses should have been anticipated. In essence you are over stretching yourself. If you can’t afford the necessities of everyday life such as school uniform and new glasses, you perhaps need to consider if putting money into savings for a child is affordable. It is difficult s to see how you will manage to pay back monies taken from DC’s savings if you currently are not able to anticipate everyday expenses especially predictable expenses such as school uniform and glasses.

You have not mentioned whose name the savings are in. If they are in DC’s name, I personally would not be touching them. I would however have a break from putting money into their savings until I was able to afford everyday expenses and I had a buffer for emergencies such as the leak. Unless your circumstances change, the amount you have been saving is just not affordable as it is impacting on being able to afford everyday expenses.

We had to have a plumber out to fix a water leak and then pay for the water damage to be repaired, plus other stuff.

Are you not covered for this on your house insurance?

Reading your update in more detail, you say your expenses are not cost of living.
No, not food etc, but they are basics that we all expect.

-New glasses (£500 for lenses sounds excessive and I wonder if you shopped around?)
-Car repairs - to be expected with a car
-Repairs to the house- ongoing and might be covered by insurance
-No uniforms and shoes - you must know your child will need these!

Sorry but you are making excuses for not saving. All of the above are essentials.

You need to create a spreadsheet and claw back your expenditure so you are saving something every month- whether it's £100 or more.

Definitely. My parents borrowed ours at times when things were tough. Why would you borrow with interest when you could borrow from your children's savings interest free? They won't miss it anyway, so long as you pay it back!

You need to start putting more money aside for emergencies and less money into a fund for the kids. You can still put money aside for them but it’s just silly to do that if you can’t afford glasses and school uniforms. It’s just not practical if you do t have it and if you have a savings fund for emergencies then you won’t feel guilt about using it.

Borrow it. Martin Lewis says it’s like the airplane mask situation - you look after yourself first. I borrowed from my kids’ savings when they were about 6 and 9 in order to buy our house. I don’t regret it. They have enjoyed living in the house too and without their contributions (though they didn’t know it) we couldn’t have done it otherwise.

@Parsnipsandginger nobody is obligated to give anyone anything, not even your kids.

this money isn’t theirs, it’s yours. You’re choosing to save money give to them in a few years time.

you need access to money now and can make up any shortfall by the time you want to have it ready to give away.

use it. You need it. Your kids will benefit from you using it now too.

We used our daughter's savings to put into our house deposit years ago. We've paid back everything and contribute monthly, so by the time she's 18, she'll have about 10,000. No need to tell her! We just thought a secure roof over her head was more important.

School uniform, glasses and car repairs are pretty predictable expenses. What have you "massively overstretched" yourself on - the mortgage?

Yes our parents borrowed ours for emergency repairs when when moved house. It was all paid back.

We were considering it when we bought the house but didn’t need to in the end. We have borrowed money from each of them to buy bonds. The bond pays back in 5 years. However we pay them back monthly so at the end if something went wrong and the bond doesn’t pay out they have their money back. If it does go to plan they’ll have twice their money.

Those extra spends are not that unusual. There will be more like that. I can't see how you are going to pay it back. There will be something else next month.