child benefit - what do you spend yours on?

[PersephoneSnape]

I apend mine on (part of) the weekly food shopping for me and 3 dcs, ds2s ballet lesson and dds pocket money. does anyone tuck it away in an account or spend it on wine and handbags?

I cant see whats wrong with saving for your childs future either. I would love DS to go to uni and dont want him to start adult life in debt.

As long as its either gets spent or saved on our children it doesnt matter. I know somebody who uses it as her clothing allowance - would never do that as I dont see it as "my money" but DS's.

Saving for your child's future is saving for your own future. In that,

Now that students are expect to pay tuition fees etc they will according to some figures be leaving university with upwards of £20,000 debt.

If their parents don't help them with their university fees they may well be put off going (meaning they'll earn significantly less income over their lifetimes) or end up back living with you because they'll never be able to clear their debts and save up for a house.

If you don't save for them now then you're likely to end up stumping up for them later and for a long time. And this at a time when you'll want to think about retiring andd pensions.

One day, you might depend on your kids to support you (financially or otherwise) in your retirement. Let's hope they're in a position to do so.

We started saving for our kids university education in the year that they were born with the reasoning that it's far less painful to be saving a couple of hundred a year (£20 a month or so) in a high interest and tax free account than it would be to come up with the cost of university in another 10-15 years when we'll have other things to spend our money on.

Some people just don't take a long-term view of finances and often they end up regretting this when it's too late.

Some people don't have the opportunity to take a long term view of finances .

True vanillapumpkin, but those of us that can shouldn't be made to feel guilty about the fact. We have worked damn hard to get where we are, it hasn't been handed to us on a plate.

Agree CoV. Child Benefit is a right, like the state pension. It is also one that we have paid for through our NI contributions.

Fivecandles it is possible to do it yourself. My friend managed to graduate without debt and without her parents paying a penny. She worked two jobs for two years after A levels, lived with her parents and put her wages into a high interest account. She then worked part time whilst doing her degree and full time in the summer breaks, which is almost 5 months so quite a long time. I know it's not ideal but I really admire her for it.

Yes I agree COV. It was the patronising tone of fivecandles post I objected too.
I don't save regularly for my children but they do both have relatively healthy savings accounts. I save regularly for my pension even though I am a SAHM in the hope I won't be a burden to my children in my old age.
I don't believe that students should have to pay fees for University, but I believe the Student Loans system now is relatively fair in that you only pay back a % of the amount you earn and the interest rate is the same as inflation. I hope that my children will want to go to University as I did and I hope to be able to help them at the time, but I will expect them to help themselves and work their holidays like I did too.

Of course, some people are not in a position to think about saving but it's my view that the majority of us can't afford not to.

We are saving NOW precisely because we won't be able to afford to stump up thousands instantly on demand when our kids go to university.

TheDevil, it may be possible to graduate without debt but your example perfectly illustrates the sort of sacrifices that this would entail.

I'm full of admiration for your friend and people like her who can work two jobs and keep up with university work. I expect my kids to help fund themselves through university and I expect them to take out loans and graduate with a certain amount of debt but I also want them to be in a position to commit themselves fully to their studies and worry about these rather than making ends meet.

I also want them to have freedom of choice about which university to go to and I don't want them to feel forced to stay at home (where again I'd be paying for them anyway). For me, part of the university experience and part of growing up is about learning to live independently not having your mum cook your tea and have to watch you get completely pissed with your mates (I accept this is part of university life but I don't necessarily want to watch my kids doing it).

There's another thread about why not many state school kids apply to Oxbridge. Now while this is not a goal I necessarily have for my children I do think it's sad that many students' choice of university is limited to the ones that they can travel to from their parents' house.

There have been loads of articles recently about kids who are coming home after university because they just can't afford to get on their feet financially (there's a name for it but I can't remember it) and this causes all sorts of stress for everyone.

And it's no good comparing what university and buying a house will be like for your kids with what it was like for you. Now more kids are going to university, there are tuition fees, rent costs more than it ever did as does the cost of living generally and so does buying a house when they eventually graduate (and hopefully get a job).

I've got friends who are still in debt 10+ years after graduating and unable to buy a house. This is not what I want for my kids if I can help it. Nor do I want them to have to choose jobs etc based on worrying about debts.

This is a problem with this country. We're not trained to think about long term financial planning and so a lot of people mistakenly see parents who plan for their kids university fees as somehow giving them a luxury which they'll squander as opposed to protecting themselves and allowing their kids opportunities (the same opportunities some of them had for free in the days of grants and when you could sign on in the summer holidays etc).

I also don't like the way some people are implying that people who go on to postgraduate study are somehow being lazy or irresponsible. Yes, I don't approve of kids sponging of their parents for ever and being lazy but how would it have been if Einstein and Van Gogh's mothers had told them to sort themselves out and get a proper job!!

My parents put a bit aside for me over the years which helped me to fund my MA and PGCE. Without their help I almost certainly wouldn't have done the MA (which was valuable for me personally and for my career) and would have struggled to do the PGCE.

fivecandles, I see the prudence of your views. But I also acknowledge that some people have structured their lives or are in jobs that don't have a lot of spare cash, where saving for anything at all, is a luxury.

I would agree with your statement wholeheartedly: "This is a problem with this country. We're not trained to think about long term financial planning and so a lot of people mistakenly see parents who plan for their kids university fees as somehow giving them a luxury which they'll squander as opposed to protecting themselves and allowing their kids opportunities (the same opportunities some of them had for free in the days of grants and when you could sign on in the summer holidays etc)."

I would argue that where parents can and have made the effort to put aside something for their children at 18, that their children have the opportunity to learn and adopt a healthy attitude to money and savings. And see how money can work for them, rather than squander it at the first possible opportunity. A bit like growing up drinking wine with meals rather than binge-drinking at 18. I am not going to make a big deal to dcs about how much I am putting aside for them. As they grow up, mu play is, rather than give them a tiny amount of pocket money with them coming to me for top ups, I plan to give them a sensible sum, but then not rarely top up and encourage them to save up for luxury and big ticket items.

My parents put aside a small sum of me in a savings account, which I got to see from time to time as it was updated. I got holiday jobs and saved the bulk of it. If I suddenly got landed with a lump sum at 18, I would have bought a property or shares, would not occur to me to squander such an opportunity. It is possible to raise children with healthy attitudes to money.

Agreed, Blueshoes and while, like you, I DO acknowlege that many people are not in a position to save I think there are a lot of people who think they have no money to save not realizing that if they put £5 a week into a high interest, tax free children's account this could add up to a significant amount over time and mean they are more financially healthy later.

And for some people £5 a week might be the amount they would otherwise spend on a sandwich and a coffee that they could make for 25p.

I know people who say they have no money for x, y, z but think nothing of spending money on designer gear for their kids or toys or £50 on a facial.

fivecandles, sorry, did not mean to suggest you did not acknowledge.

In your example where people can cut corners to save, I fear that the reason why they don't is partly because saving and being financially savvy is not sexy. And so invisible. Whereas the designer gear or lifestyle coffees are so much more immediately gratifying.

My SIL thinks dh and I are richer than god (we are not) and can't understand why we have not upgraded our modest car for 5 years now. But they don't know that we have been overpaying our mortgage like the clappers in anticipation of upgrading our property at the right time.

The whole endowment and pensions crisis has dented people's confidence in long term savings/investments somewhat.

A little financial confidence helps, rather than going with the herd. As John D Rockefeller used to say that the way to make money is "to buy when blood is running in the streets". If you have built up a nice savings pot, now is the chance to pick up some cheap equities (and potentially property) and take a long term view. Worked very well for us 6 years' ago. Or like what you describe, drip-feed by way of regular investments to smoothen out the investment peaks and troughs. Or just put it into a savings account (ideally cash ISA), at the very least!

My CB goes in the bank at the moment, but I am going to set up a savings a/c for DS and put it in there to help with uni. I don't want him in debt at the beginning of his working life, as a student loan DOES get taken into account for mortgages etc. It took ages for mine to pay off, 4 years to pay back £1750 for my PGCE, as they kept messing with the income levels that you paid at.

We don't 'need' it, but I am abroad, and still get child benefit from the UK, as I get HRP towards my pension for it. I used to laugh when I got my payslip as my child benefit was about 35% of my NI, so what they gave with one hand, they took with the other.

It should be universal, those who pay NI are funding it for everyone, and it should not be taxed, as NI is effectively a tax by another name (ie: we pledge not to raise taxes, but we'll keep sticking NI up!). My mum used to use it for lipstick money as my Dad was quite tight with money, and until I moved abroad, mine was paid by book/Post Office card account to support my local post office.

Goes straight into a seperate account which we call our 'Holiday fund' going towards our spending money for our annual holiday(which we tend to take in September)then in the weeks between our holiday and xmas,it gets spent on xmas presents.

fc - I understand what you're saying honestly I do, and tbh nothing scares more more at the minute than the thought that i'm 26 (which in the finance word of pensions etc is starting to leave things a little late) anyhow, I'm yet to get a life insurance, pension and savings. but for the next 4-5 years whilst studying I can't see me being able to - it's not a case of the expensive stuff for me it's a case of I could put £5 in a savings account for ds, or I could keep the house warm for him. when it's options like those saving unfortunately for me is on the back burner. However, I have promised myself & my dad (who I might add is very very financially savvy) that by the time I hit 30, i'll have sorted out a pension plan, savings isas etc, for me and DS. (well obv not a pension for him)

but I want to be able to send him to the uni he chooses, and be debt free after the course - even if he does have to get a little job in the holidays. i'm teaching him now that he can't have everything he wants - and will continue to do so. whilst on one hand i'd love for DS to have the materialistic stuff I never did as a child and nice holidays etc, for me, I never went without anything growing up - always lots of love etc, we didn't have the holidays but we did have a nice nest egg - so if I can do that for my DS then i'll be a very happy mummy indeed.

davidtennant's, you can only do what you can do. Of course, you have to invest in yourself and make sure you're financially stable before you can start saving for your kids.

What riles me is the people who CAN afford to save for their kids but see this as an unncessary luxury.

yes I understand - to be fair I don't understand parents who would rather spend the money on their own wardrobes than put food on the table for the children. or as a point of fact why buy designer outfits for a baby costing £70 when all they do is out grow it, be sick all over it and basically it looks the same as one for £5 from tescos! lol.

(can't you tell where I get ds's clothes from lol)

Though of course if you were to put it into an account for the child you would eventually be taxed on it as it is treated as a gift from you to the child (in the UK).

No, janin. It is tax free unless it goes over a certain amount. Is it 3 grand a year?

By fivecandles: 'What riles me is the people who CAN afford to save for their kids but see this as an unncessary luxury.'

Now that comment I totally agree with, (says she who has had only one facial in her life paid for by her Dad and step-mum for her 30th birthday and who owns no designer clothes whatsoever )

If they earn over £100 in interest on money that has come from the parents it is taxed as the parents' own money. But if you are putting it all into an account for them from day 1 that will happen.

From DirectGov.uk here:

You can give a child or invest on their behalf as much money as you like. But if you're a parent or step-parent and the money you give your child earns more than £100 interest a year, this interest will be taxed as if it were your own.

The £100 limit only applies to parents and step-parents. Grandparents and other adults who give money to children are not liable to pay the tax if the interest exceeds £100 a year.

I use it to do my monthly on line shop of nappies, wipes and other store cupboard items for the month. I hope I will be in a position to save it for them at some point.