Real-life MMD: Should I use my 5-year-old's £100k Prem Bond win to pay debts?

Hiccups_2

Just to throw another argument in the mix.

Childhood should be one of the happiest, carefree and memorable times of your life, so why not use some of that money for creating some good memories and enjoyment today? Sometimes it's remembering the good times that keeps people close in the future.

Similarly, a debt burdened existence where you find yourself struggling is not going to be a positive influence on your children.

Portyman

What a load of nonsense these 'moralists' talk! Get off your pedestals and join the real world...
The premium bonds were bought as a 'family'. If they'd won £25 or £50 it would have meant a nice treat or a visit to the cinema or the like...
Winning such a 'life-changing' amount was extremely unlikely and very fortunate. It's only sensible that the whole family share the good fortune, surely?
If the moralists are correct then the child should get the money now. Not wait until she's 18 (why would that make any sense?). Either it's her money and her money alone, in which case she gets it now and can do what she likes, or it's a joint family 'win' and they all share in it.
What's the sense of the whole family growing up in debt and difficulty when a simple solution is available? That's just puritanical pedantry.
As I say - ignore these miserable moaning minnies and do what's right for the whole family.
If you've told the girl 'she' won the money then a) you really shouldn't have! and b) she should understand that helping her family is a wonderful thing and much appreciated. (Unlike all these 'moralists' who would want it all to themselves!)
Go enjoy. I hope your debts aren't a £100k! :-) (I wouldn't 'count' a mortgage) and you can pay them off and still have plenty left for a better standard of living and a few treats. Keep it rational, a holiday, a few toys, nice clothes.
Ultimately, do what you feel is right in your hearts (and if that means giving 100K to a five year old, so be it! But I wouldn't.)

nashly

When i was kid my brother and i were both left £1,000 mine was in a savings account his was in premium bonds. He occasionally won £50 or £100. It wasn't shared it was his as they were his bonds, by the same token i didn't share the interest i earnt on my account; my youngest brother was born 9 months after we were left the money and received nothing. I don't know what would have happened had he been fortunate enough to win a large amount. I now have children of my own neither of whom have premium bonds but if they did and one of them won such a large sum i would encourage (strongly) the child to share it with their sibling as if luck favoured the other child and they won a large amount how would they feel. Regarding payment of debt it would depend on the debt if it was the only way to keep a roof over everyone's head then yes i would borrow some but paying off store cards or credit cards and/or going on holiday no I wouldn't. My husband believes that the money should remain with the child whose bond won it. So in a nutshell i would tell all the children that they were all bought some "tickets" when they were born and have been very lucky to win some money on one of them and wouldn't it be nice and fair to split the money between them. I would then cash in the bonds and buy a new lot but this time in my name to prevent this happening again.

EvelynBaker

It's pretty obvious to me- split 4 ways (the parents count as 1) you pay off debts with your chunk and the children get theirs when 25. Don't tell them now- wait until older and wiser.

I knew friends (including my now partner) who received chunks of inheritance when 18 and p*ssed it away- now we are saving for a deposit on a house and makes me feel sick thinking about it!

TheLurker

No you shouldn't use it or split it. If you give someone a gift it doesn't suddenly become yours or anyone elses just because it's come up trumps! The winner should decide what to do with the money when they are 18.

EvelynBaker

I just think not splitting it would cause A LOT of resentment down the line, i don't have siblings myself but have seen brothers and sisters arguing nearly to the death over who got more chips at dinner- can only imagine the sort of arguments this would cause.

jamesjenkinsyates

hldomster wrote: »

You should definitely keep it in an account for the 5 year old until they are 18. What was the point of buying them premium bonds if you were just intending on banking the money for yourself should they get a big win? If you do anything other than keep it in an account for the person who won it then you are acting completely immorally.

Agreed. This is exactly what should be done.

JonnieGlas

Firstly congratulations on the big win!

It's definitely a good problem to have - especially if you have debts.

If it were me, I'd like to think I'd split the money 5 ways and stick to that rule regardless of the size of any future win's.

Use your £40k to pay off your debts and take the kids on holiday... Don't blow £15k on a family holiday to Disney though. That would be a waste. The kids will have just as good time on a beach in Spain for 2 weeks and it'll cost about £3k. Have 5 years of those rather than 1 "trip of a life time" to Disney - £10 for a burger.

If you have an investors mind set, then I'd recommend buying a house (dont buy a flat - service charge) with the kids £60k and let the rent pay off the remaining mortgage over the next 12-15 years.

That way by the time the kids are old enough to have the money - the house should almost be paid off and you've almost doubled their money. "Happy 21st Birthday - Here's £40k." That'd be a nice start in life for anyone!

Good luck & what ever you decide, treat yourself to a night in a posh hotel and slap up diner for two!

UKParallax

It's the five year old's money, and I can't believe anyone's suggesting otherwise. If your debts are serious, you could potentially take a loan from the winnings to provide security for her, but in no way is it right to take money that belongs to her for yourself or your other kids. She may even choose to share it out with her siblings when she comes of age, but that'll be her choice then, not your choice now.

"Hey, here's a lottery ticket. But if you win, I'm keeping the winnings!" I mean, seriously...

fuzzymummy

In my opinion (and you may not all agree) your children will be happier if you aren't stressed about debts and giving them as many experiences as possible (holidays for example) and spending lots of time doing things with them can only enrich them. I'd pay the debts, enjoy a great family holiday & split the leftovers between your 3 children.