Kids Pay Rent We Save it for them?

KeepOnKnitting

Or you could teach them real financial responsibility and charge them board. Full stop. No returns.

They can have it back as inheritance if you don't manage to spend it on Caribbean holidays by then.

atush

Charging your children 'rent' is a Good thing.

As the rent (i charged 50/week) is far far less than them renting an apartment/flat or room in a house and paying all their costs incl food/utilities/ It breaks them in if you were, to the realities of life.

Even if they are on a low wage, they can still save a large amount. Unless their lifestyles are out of control. In which case if you baby them by nor charging to allow them the latest phone and all sorts of going out, holidays etc then you are dong them no favors by impoverishing your retirement years to enable their overspending.

MadMat

Reading this is making me feel a little selfish, I've taken advantage of the fact that my 19 year old is finally contributing something towards his upkeep (nothing like the real cost of him still living at home) to divert a little more of my own income into my SIPP.

Is that selfish - at £30 a week for bed and board when he's earning around £200 a week after tax it seems to me he's getting a pretty good deal!

Mat

DairyQueen

iglad wrote: »

Thats what my mum did with my brother and I when wee both started working and were still at home.

She basically put our rent money into a building society and helped with a deposit on our first houses.

She never actually told us what she was doing so it came a s a welcome surprise.

The key to it all is not to tell them about it.

So, your mum effectively paid all of your living costs and decided that 'your' savings would be diverted toward a house deposit, and without any discussion.

She treated you as a dependent child.

She could, of course, have charged you zero on the condition that you saved the equivalent toward a house deposit. This would have required some consideration for your status as an adult. It would have required discussion and trust.

I'm not sure how infantilising adult children is a template for encouraging financial responsibility and discipline, nor how it informs young adults about real world costs.

Malthusian

DairyQueen wrote: »

So, your mum effectively paid all of your living costs and decided that 'your' savings would be diverted toward a house deposit, and without any discussion.

She treated you as a dependent child.

Yeah, pretty much. If you came from someone's womb and live in their house at below market rent then you are their child and dependent on them. They always had the option of living somewhere else and saving as much of their now considerably lower disposable income for whatever they wanted.

I can see why people go through this rigmarole but it seems a sub-optimal solution compared to raising a financially responsible child who is allowed to practise handling money from the age they are capable of it.

It is the same school of thought that leads to people setting up Wills with pointless and legally invalid clauses about the heir only being allowed to spend their money at 25.

It is true that far too many kids refuse to fly the nest for the sake of an easy life, but charging them below market rent isn't a solution. If you want rid of them you have to charge them market rates. A kid who has never lived independently will also struggle with the responsibilities of being a homeowner. If they refuse to leave the family home and start paying rent, then even if they do save up a deposit (in their own hands or yours) how are you going to get them to leave the family home and start paying a mortgage, plus all the other bills that come from owning your own property?

Mnd

The system my parents used was, no matter your wages. 33% was housekeeping 33% saving.33% spending. It worked fine. Taught us about money and built up a decent saved amount.

Thrugelmir

As soon as I got a paid job. My mother took 10% of my net standard wage as housekeeping. Seemed fair enough.

Though unknown to me she did put part of it into a building society account. When I told her that I was looking into buying my first property. She disclosed the existance of the account and said to use it towards the deposit. Resulting in a smaller mortgage,

schiff

It looks like I was the one to do it the other way round! I paid my keep at home, agreed with my mother; can't remember how much as it was a long long time ago! I had annual pay increments that I offered to share with my mother. Accepted for a couple of years but then I was told it wasn't needed. So I opened deposit accounts in the old Co-Operative Building Society (now Nationwide) for my mother and father with half the not needed money going each month to each of them. My mother still had the same account when she died at 83!

steampowered

Personally I would never charge my kids rent.

I would much rather my kids learn financial responsibility by managing their money themselves, hopefully saving a big chunk of it.

At that stage in their lives they need to be saving their money for uni, moving out or a house deposit.

I might feel a bit differently though if my kids were very immature and I thought they'd spend it all on fast cars and girls.

Malthusian

steampowered wrote: »

I might feel a bit differently though if my kids were very immature and I thought they'd spend it all on fast cars and girls.

If your kids were very immature and liked to spend all their money on fast cars and girls, you'd be more likely to feel "Little Johnny should pay me rent so I can get my Jag serviced and buy my mistress another necklace". Apples don't fall far from the tree.