FIREside Chats

Cornish_mum

Hi ElmoR, I have thought about this and plan to talk to DD and DS about setting up SIPPs for them (when they are late teens). 

I want the kids to be actively involved in the decision making process as part of their financial education. It’s super important to me that any money we gift to the kids is free of obligation; hence they need to decide what they think is best for it. obviously we don’t want them to spend it on stuff that is harmful but for me I really just want to gift them as much freedom as I can (the money is just a means to an end). They could decide that freedom for them is FIRE/ being a SAHP/mortgage free-living allowing them to pursue vocation type job/ travel around world etc etc. My dream is that they get to have a choice and that they understand the value and privilege of that choice. When we get a bit nearer to this point we plan to take some professional advice. This is all subject to me and MrCM maintaining our income and will be determined by how much we can save.

Chiglepig

@ElmoR, this may be slightly controversial, but on other (less financially oriented forums) I see a lot of emphasis on ensuring children have a secure financial, often at the expense of the parent. There seems to be a real fear that children won't be able to get on in the world if their parents haven't provided them with house deposits, pensions, a car at 18.  And this seems to be an extension of the belief that children have to be entertained constantly, driven everywhere, and have life generally sorted out for them, which then leaves them struggling when they have to amuse themselves, or make independent decisions. *  **

Now, don't get me wrong, I help my daughter out, I did save for her before she was 18, but  I don't jump in and preempt what she needs, so she makes and controls her own decisions (she's 19). I also think there are challenges for each generation but the best way to address those challenges is financial education, not the removal of agency via kindness.

If we look around the forums, there are people from what might be characterised as the more fortunate generations who are struggling with debt, have poor pensions, aren't sure why they haven't got a savings pot. BUT there are also some amazingly sorted younger people in their 20s already thinking about FIRE, paying off mortgages, pensions.

*I know that lots of what I've said here might needle some people, and it's an outrageous generalisation of the results of specific ways of approaching life.

** I will also continue to vote for politicians who support humane policies that preserve support for the vulnerable, and in old age.

South_coast

Chiglepig said:

And this seems to be an extension of the belief that children have to be entertained constantly, driven everywhere, and have life generally sorted out for them, which then leaves them struggling when they have to amuse themselves, or make independent decisions.

I know I'm going off on a bit of a tangent here, but I'm seeing evidence of this a lot more at work in the last year or so. Younger adults in their 20's seem to be extending the definition of "Customer Service" to mean fighting their battles for them. They are much more reluctant to interact directly with other people around them, and instead request that we do it for them so that they can hide behind us and preserve their anonymity. 

Will go back to lurking now 🤣!

Retireinten

ElmoR said:

Was wondering about the impact of inter-generational inequalities and the next generation's chances of achieving FIRE? As a group, we have all stepped carefully around the 'if the state pension is still around' type thoughts. Those of you with children, are any of you thinking of ways to help them? Starting a pension for them? LISA is an obvious boost at 18 but is a pension a good idea? Even a tiny amount trickling in?

I expect there will be a state pension in the future just as there will be a form of welfare benefits, but it will no doubt be paid later in life and the cost of maintaining it may well increase for all of us. 

I bought my first property 22 years ago (3 bed detached in need of renovation) at the age of 23, with my now husband for less than £70k. By age 32 we were mortgage free, then we moved and are now mortgage free again and around 8 years away from FI (will be early/mid 50's when we get there, fingers crossed).  We received no help from parents because they simply couldn't afford it. 


Employment and housing will be far more challenging for my kids than it was for us.  But we should be in a position to help them... as long as they help themselves, that is.  


Our plan includes a house deposit saving of £35k for each child, hopefully helped by LISA's.  We will also get them on the road with a car each and a couple of years insurance. 

Also considering a SIPP for each of them, just £100 a month each but the sooner they start saving the better.  This is currently not in the budget so I think we will wait until we're closer to our own FI before committing to this.... but we are currently on track to achieve more than our target retirement income so its feasible to continue this saving for them well into our own retirement. 


I expect they won't be leaving home until much later than we did either and our budget should stretch to occasional treats for the kids and their future partners (meals out, cheap holidays etc). I intend to help with the care of grandchildren too if they arrive and they stay local to us  (I had very little practical help from family when my children were young). 


But one set of grandparents are now in a position to help also... they are planning to pay for driving lessons and contribute to house deposits. 


And assuming it's not all eaten up in care home fees and/or a late life crisis spending spree, we should see an inheritance in the region of £250-£350k in the future.  We're not planning for this at all, because it will most likely happen when we are well into our own retirement.  So any inheritance will be passed to our adult children and our grandchildren if and when the time comes. 


But I can see a potential dilemma. .. can I really see myself packing up work at 53 if my kids are still struggling to get on their feet financially?  When a few more years at work could make such a difference to them. Think I will have to cross that bridge when I come to it. 

QueenJess

I really hate the idea of starting a SIPP for my children - partly because it seems ridiculous in my mind that it should ever be a requirement to do so in a civilized. world.

We have grandparents saving for them in ISA's which can be spent on Uni, car, house deposit or whatever (but am generally expecting Uni at the moment just because this is what my grandparents did for me). We are also saving a little bit in an ISA too which they can have as a surprise lump sum to get them started in life.

I shall not be telling my children about any savings much in advance until they need it (yes I know an ISA is theirs so at 18 I have to hand it over). I want them expect to have to stand on their own two feet, although obviously we will help for Uni fees etc. It will then be a nice surprise and hopefully they will spend wisely.

Not thought further than that. If they want to buy a car at 18 then they should save for it themselves through working part time. We will help source one (or DH will as he knows all about cars and I haven't a clue).

Obviously if they need more help we will provide it, but I don't want them to expect it.

edinburgher

Investing for DD's uni fees/first business/first home deposit, may ask parents to vary will if there's anything to come in terms of an inheritance, with a little luck I'll be 60+ by the time they're gone and already retired

Karmacat

For those with more than one child, I want to put in a plea to be really, really careful about being fair, and talking through the fairness if possible.  When I was working as a therapist, about past traumas, I also worked with present day issues of course, and the number of times it came up in wills being changed, or children going to uni being treated differently from the previous one, its a real live situation.  None of my personal experience, as I don't have any kids, and maybe it's stopped affecting so *many* families now because the uni rules seem fairly static (don't know, actually!) but it was definitely important at one stage.

becky_rtw

OH has two children, but we have none together.

We've supported them with day to day stuff, but feel it's important for them to live off their own merits so to speak, so we do not do any savings for them. They are mid 20s now so both working and studying. They are not earning a fortune, but neither did me and OH at their age.

I think a bit of struggle is good for you, we of course would always help out if they were desperate for money. 

QueenJess

Karmacat said:

For those with more than one child, I want to put in a plea to be really, really careful about being fair, and talking through the fairness if possible.  When I was working as a therapist, about past traumas, I also worked with present day issues of course, and the number of times it came up in wills being changed, or children going to uni being treated differently from the previous one, its a real live situation.  None of my personal experience, as I don't have any kids, and maybe it's stopped affecting so *many* families now because the uni rules seem fairly static (don't know, actually!) but it was definitely important at one stage.

Wow, that's sad. It never occurred to me to treat my children differently. I am intending to give them the same amount of money and if one spends on uni and the other decides not to go and spend it on a house deposit instead, then that's fine with me.

greenbee

QueenJess said:

Karmacat said:

For those with more than one child, I want to put in a plea to be really, really careful about being fair, and talking through the fairness if possible.  When I was working as a therapist, about past traumas, I also worked with present day issues of course, and the number of times it came up in wills being changed, or children going to uni being treated differently from the previous one, its a real live situation.  None of my personal experience, as I don't have any kids, and maybe it's stopped affecting so *many* families now because the uni rules seem fairly static (don't know, actually!) but it was definitely important at one stage.

Wow, that's sad. It never occurred to me to treat my children differently. I am intending to give them the same amount of money and if one spends on uni and the other decides not to go and spend it on a house deposit instead, then that's fine with me.

KC is absolutely right. Some people adjust their wills because they think one child is doing better than the other financially, but if all have the same opportunities then it may well be down to lifestyle choices and could well change. Or just be perception - we all know far too well how easy it is for people to fund their lifestyle with debt. Obviously its different if you have a child with long-term care needs that have to be funded, or if one has given up work to care for a parent and missed out on career/income as a result, but whatever your perception is, or relationship with your kids, arguments over money when you're gone will only make things worse. TBH, best thing to do is spend it anyway - think of it as saving them the hassle of the IHT and probate paperwork   (Having done my dad's, I've told my mum to make sure she spends everything as I really don't want to have to do it again...)