Payiing into child's savings account while in debt

Poppy1984

Hi op I don't want to offend you but reading your post and replies really made my heart sink.

I 100% understand where you are coming from and I think there is a lot of emotions around saving for our children. I myself have continued to put a small contribution into my sons savings whilst I pay off my large debt. However the difference is I have a plan to pay my debt off and an end date and my son will be 18 next year so I didn't have much time.

You have the luxury of time for saving for your little one as they are still a baby so they aren't going to need that money any time soon.

What stands out to me is that you haven't got control over your debts at the moment and forgive me if I'm picking this up wrong but maybe putting away a small amount for your baby feels like some control over the future. I actually think it's probably not going to make much difference to your debt payments whether you do or you don't save a small amount as right now you don't sound like you have a plan to pay these debts off or a zero based budget where every penny is accounted for. So it'll have little effect either way at the moment.

What would be more helpful to you would be to implement a plan, perhaps with step change or if that's not appropriate (I see you have mentioned your husband isn't keep on the idea) you can make a plan together how you will tackle these debts. A lot of people get a lot of inspiration from listening to Dave Ramsey's podcasts or watching his YouTube videos. He uses a snowball method to pay off debts.

Have you created an accurate SOA's? This can give you a very clear picture of all your debts, the interest rate for each one and how much disposable income you have available to throw at the debts. I like playing with the snowball calculator because it gives you a bit of hope that in x amount of years you could be debt free if you paid x amount a month. That way say for example you could be debt free in 6 years. Your baby will still be so young at that point and you will still have plenty of time to save for their futures but at that point you would be debt free and probably more able to put away a bit more for them so not paying into account for them for 6 years whilst paying off debt will have zero affect on how much they receive at 18 but it will be a lot less stressful for you than trying to put a small amount away now while you're drowning in debt and not knowing how to tackle it.

I started off with £30,322's of debt in Feb 2018 this is far more than I earn in a year. This debt is just mine no husband and I live on my own with my teenage son. From sticking to a budget where every penny is allocated (I really believe this is the key to getting out of debt) my debt now stands at £17,697 which yea is still high but feels much more manageable than £30,000+ I will be debt free by aug 2023 (hopefully before) so there is light at the end of the tunnel and because budgeting is so engrained in me now when I am finally debt free I will continue to stick to a budget but I will feel rich lol because my money will be mine not going to debt every month. When you don't have a budget money just gets frittered away on nothing it's easy done these days because the price of everything is so expensive.

I know this original post is about a savings account for your baby and I have taken it off topic but my advice to you is have the account open for relatives to put money into, forget about your contribution for now whether you are or you aren't putting money into it right now is a bit matter less so try and leave that where it is for now and concentrate on getting a plan together to tackle your debts.

A SOA's is a great start and if you post it on here you will get lots of advice on how you can make savings and tweak it.

List your debts and their interest rates and your minimum payments.

Look into whether you have the available funds to pay the debts yourselves or whether you need support from a debt charity once you have decided that you need a working budget one that takes into account every penny that goes in and out of your accounts and every cost that you spend money on whether it be weekly monthly yearly a one off it all needs accounted for. You can then look at what you can reduce spending on and once you have that in place all you need to do is stick to it and keep ploughing away until the debts gone then you will have the available funds to save what you want for your little one who will still be little at that point but think how great you will feel to be debt free.

Poppy

middleclassbutpoor

halp... wrote: »

middleclassbutpoor and Unicorn Cottage - thank you for the boost of inspiration. £120 a month does sound like an amazing goal to work towards. I'm currently paying the debt myself (note: not paying it off...), but very close to getting help with it. I've already contacted a debt charity but not acted on their advice yet (it's complicated). Husband is not on board (despite his views on the savings account - e.g. he spends £50 a month on coffees and hasn't indicated he will change that), but that's another issue.

Ugh. What a silly situation Thank you all again, I think I can see the right way to move forward.

This is one of the frustrations that I have with this forum at times in how many people go to debt charities to put debt solutions in place far too quickly. Clearly where the advice is right and your situation dictates that it is the last resort, I fully support it. However it really does need to be last resort.

When you are finding that you have an unsupportive partner who is willing to give up his £600 a year coffee habit, to help you it doesn't feel like last resort to me.

There are various levers that anyone can pull to help them get out of debt.

Lever 1 - Increase their income through working additional hours/jobs or getting a better paying role.

Lever 2- Increase their disposable income through reducing their expenses each month

Lever 3 - This is pulling levers one and two at the same time.

Often on here, we will read that there are life circumstances which stop both happening but more often than not, Lever 2 is the place we look to help as its the easiest bit to change.

I would really encourage you to make sure you have explored these 3 levers and you have done everything you can to get your partner on board. At the end of the day, does he really understand the help you need. If it was my wife that was in your position, I would be horrified to find that she was feeling this way or in this position. It comes across as a sign of immaturity if they still don't see your problems as their problems too if you are committed to each other.

I really think your situation is workable with some good planning and decisions between you both. I wish you luck and hope that you find a way to get to £120 a month savings for your child and hopefully a lot more too.

Jonathan_Kelvin

halp... wrote: »

Hello everyone, I've tried to search for this but couldn't find an answer - maybe it's a silly question...

What are your views on paying a small amount (£10-20) per month into a child's savings account when you're horribly in debt? I feel like my debts should be nothing to do with my baby and I would like to pay into his account for at least a year (while it's at high interest), but husband says it's better to put the money into my debts. I just think that £120 in a year will make no noticeable difference to my debts (£40k) but will give my son a good financial head start. He's only 1.

I feel so strongly that I don't want him to feel any of my debt burden.

Is there a sensible approach to this?

Thanks, wise people.

What is a baby to do with the money?