Ideas on how DD can spend £22K Child Trust Fund - when it matures soon

[RaggedNature]

In about 3 months time DD will be 18 years old.

CTF will be worth approx £22k.

I will encourage her to save some of course.

But has anyone got any ideas or suggestions for positively spending it?

A car, driving lessons are two I've thought of.

(P.S. Not sure if she wants to pursue higher or further education - she seems non-plussed at the moment.)

Why does she have to spend it?

I agree it might be sensible to use some for driving lessons, if she wants to learn, but 22k is a heck of a lot for an 18 year old to have access to.

You say you'll encourage her to save some, but I think she needs independent financial advice.

Even the most sensible 18 year olds can be foolish with money, especially if encouraged by friends / partners. If she wastes the money, she'll likely regret it in 5 years time.

Give it to me

Get her an appointment with a financial advisor. That’s pretty much a deposit for a house depending on where she lives. I’d strongly encourage her not to touch it and to get a part time job to pay for things like driving lessons.

Put it in a pension - by the time she is 70 that should be a fine addition to whatever she manages to accumulate during her working life.

I’d look at starting a pension, or putting it in an isa with a view to using it a a property deposit. Or using it as a property deposit.

Now might be a good time to buy.

I'd encourage her to have one treat and invest the rest for a deposit on a house.

Sorry, Icka, I'm not being clear.

I do want her to save most of it.

However, when we chat, I want to think of some positive examples of her to spend it on, rather than frittering it away, if that makes sense ...

£22K will be what she will have access to in one go, unfortunately not much I can do about that!

Thanks for later suggestions. Just cross-posted.

Driving lessons (& car as appropriate if needed).
Otherwise nothing. Not to be frittered away.

However, when we chat, I want to think of some positive examples of her to spend it on, rather than frittering it away, if that makes sense

This is why I recommended getting independent financial advice. Instead of seeing what she could spend it on now, she needs to see the bigger impact it could have on her life in the future. Such as a house deposit or pension etc. It's difficult for an 18 year old to realise how life changing that sort of money can be. You having a chat is lovely, but could easily come across as nagging her or trying to stop her having fun.

Driving lessons then an inexpensive car. The rest saved to get a house in the future.

Driving lessons

Car/ insurance

Maybe suggest an experience if theres something shes wanted to do a for a while (obvs after covid)

If she's that inclined then a new designer piece.

Not all suggestions have yo be practical as long as shes aware and in contact with an advisor

Some very good advice from pp, you seem to want her to spend it.

Driving lessons and the rest for a house deposit.

I saved a lot of money up when I lived at home and was lucky enough to have a good deposit to put down. Best thing I ever did as it's v hard to save if you start renting

I would teach her how to invest, how her money can grow by compounding. Give her some fun money but really get her to understand how the money can work for her. The millionaire next door is a great book on how to live within your means and save and invest

If you’re in a cheap area a house deposit.

I'd suggest a house deposit

I would put the money in premium bonds and then move the max amount across to a Lifetime Isa. Save a maximum of £4000 a year and get 25% bonus so an addition £1000 if you solve the max. However, normally you can only get access to it fee free (the fee doesn't apply atm due to covid) to buy your first house or for your pension

She seriously needs to not touch it and save it for a house deposit.

Driving lessons can and should be paid for from employment.

Teach her the difference between one off capital expenses (car, deposit, round the world ticket) that she might want to fund and regular expenditure (rent, mortgage, bills, Netflix, phone data) that she will need to earn enough every month to cover. Then get her to list the capital expenses she might have/want and estimate the cost of each. Personally I would encourage her to save at least half of it to start a house deposit fund (but this might be a long time in the future).

Just make sure she’s wary and doesn’t spend it just because she wants daft things like taxis/takeaways/nights out like my closest friend who blew through 25k inheritance before she was 21😞

This is why I’ve not opened a junior isa for DD, no way do I want an 18 year old getting their hands on that kind of money!

Tell her to put the whole lot in the best savings account she can find and forget about it until she needs it either for a house deposit or life and death emergency, everything else can be paid for from earnings.

I wouldn't encourage her to spend any of it. Mine won't be. They'll be handing it straight over and I'll put it in premium bonds or shares in their name (they can control a share account if they want) and that's it. They can keep the government contribution part of it plus the interest and spend it on a holiday, if we can ever travel without restrictions!
Essentially that's her house deposit, now she needs the job to match.

If she needs something, than she will know what she needs. It can't be positive spending if you're having to ask a bunch of strangers on the internet what she should buy.

An independent advisor isn't going to be interested in £22k.
Encourage her not to spend it tbh. House deposit and driving lessons only imo.