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

akbrooker

What will the children think if one of them gets £100,000 when they're eighteen? The chances of either of the other two winning that much are virtually nil.

gillyrah

Pay off your debts! If, for example, you pay off your 100K mortgage, you can save the monthly payments instead. Thus saving interest and ending up better off over all. Then set up savings accounts for each of them so that when they're older they each get a good amount for a house deposit, uni, or a car. Without the debt, you'll all be less stressed and will have plenty of money for savings AND nice things, like holidays, that you can save up for.

Don't give the money to them when they reach 18, I know someone who got through 10k in 3 months at 18 and had absolutely nothing to show for it other than a criminal record (drugs)! Wait and see what they want it for. If it's a car, buy it for them; a house deposit, put it down for them etc. If this had happened to me as a child I would never resent my parents for getting us out of debt and therefore providing us with a happier, stress free, better off existence as long as they then used what they had saved to provide me and my siblings with a trust fund or similar.

ritesh

As most have said use money to pay of debts first and split the remaining balance with the children.

My parents did this for my sister and I. Who ever one it was shared between us so we both had equal amounts.

Its all about sharing as you are a family unit. Obviously when the children do part-time/Saturday work the money should be theirs to do with as they have earned it. But in this case YOU are the one who has set-up the bonds for the children and thus you are entitled to make the decision of how that money gets split and in your case if part of the money can pay of debts this would be a priority in my eyes

You need a stable unit for it to all work so get rid of debts first!

oldmasterjds

Don't listen to anyone who tells you your actions are immoral, they're probably hiding dark secrets themselves!

Definitely don't feel bad about any decision you make, do it with all your heart and without regret.

How will you feel later in life when you are struggling to make a life for two of your children whilst your 18 year old is spending 100000 on holidays to Ibiza etc..

Sbarkia

It will benefit the whole family if the debts are paid off but the money should be repaid as soon as possible. Any money left over should be put into three separate accounts for the children. They should only have access to this at 18 at their parents' discretion for educational purposes if necessary, otherwise it should remain gathering interest until they reach 25 or earlier if they wish to buy a property. My own children inherited money from their grandparents on this basis and it was used as a deposit for their first independent homes.

POPPYOSCAR

I cannot make my mind up on this one.

What will happen in the future when the children get older?

Are all wins to be shared until a certain age and then kept by the individual after that age?

madsaintuden

I would put £20k in to three accounts to cover uni fees/training/contribute towards a deposit for a flat etc for each of the children totalling £60k. Then use £40K left to pay towards your debts - if it wont pay it all off it will make a big dent in your monthly repayments.

each child then has enough money to get them started as adults without being spoiled.

MissMills81

I presume that your goal in buying these bonds was to provide your children with an opportunity at a good start in life?

I believe that its fair enough to split the winnings between all three siblings to give them all a good start. I cant see your children having a problem with that.

It could very well be the case that paying off your debts with this cash could significantly improve you and your children's circumstances, home life and ease stress and burden. If this is the case then I think spending some of the money clearing these debts is okay however I think you must repay this debt to your children and replace the money you used with any interest lost.

I dont think that going on holiday is a good idea. Your kids would effectively be paying for the holiday as it is their money, or your daughters to be more accurate and its not a necessity like clearing off your debt may be. Clearing your debts would surely free up some income to allow you to save up for this treat?

stegs8

I think you should pay off your debts, your child will therefore have the benefits as well as the other kids as you will not be stressed or worried about it. then as others say split it 3 ways, your child should understand. Family comes first. I would be devastated if I turned 18 found out I had a load of money which my siblings didnt and that my parents had struggled with debts.

oldnewhand

Although the children are young, I wouldn't be able to live myself if I just took the money (even if it was just borrowed) so I would suggest explaining in a simple way that mummy(and daddy?) need to pay some people some money so would they mind if you used some of this lucky money that had been won by them to pay those people and you would put the money back as soon as you could. I think sharing the winnings is the fairest way, possibly reinvesting in premium bonds; but of course unless you're very lucky they'll never keep up with inflation. You need to decide at what age you want your children to take over the bonds too (unless this is already set down in terms) It would be totally immoral to just use the money without asking or paying back. They are young but if you want them to always trust you, you have to earn it.