Is it right to save for kids?

[Deleted User]

I thought I'd posted this earlier but must have imagined it because I can't see it now. But here goes.

I've had a good think. I have two kids, one has a CTF granted by the government, the other doesn't, as he was born after the scheme ended. I'm not skint, but I'm not rich either, so this is going to be my approach.

The CTF will go to a junior stocks and shares ISA, possibly with Wealthify, as their minimum investment terms are more favourable for those who can't save much.

The other kid, that doesn't have a CTF will also get a similar ISA. I'll do some sums and start him off with about the same amount as the older one would have had at his age, just to be fair.

While it will be down to me to manage their accounts, I'll have them get very much involved in all the decision making, such as which funds to invest in, and when to put birthday / Christmas money etc in their regular accounts, if there's something they're saving up for now, or in their ISA.

I think this way, they'll be thinking about money more, and understanding it better, and while they won't be turning 18 with a house deposit already saved up, hopefully they'll at least have good financial habits we'll embedded by then. Then even if they do turn out like me, and go through a phase of clubbing and designer clothes, and blow the lot, well at least they should be better equipped than I was to make it back when they settle down. 

maman

Obviously we have a different system here wondercollie but I was interested that you decided to behave differently from your own parents.

It can work both ways. My parents were always generous to me and my siblings and we've always done the same. My mother, for example, used to send me holiday spending money even when I was earning an excellent salary. My brothers are younger and had small children, so they probably needed it more, but she insisted on treating us all equally. DH comes from a large family and his mother didn't believe in equal treatment. She gave more (and was asked frequently) to the 'lame ducks' which caused a lot of hurt as they were in that position from personal choices.

Mummy2cheekymonkeys

This is an interesting thread to read. When my youngest was born and my eldest was 1 I opened them both a savings account each. I have been saving into them now for 3 years. Since then both boys have been diagnosed with learning difficulties and I am wondering what to do. Do I continue to save in their name or move it to an account in my name. They get a good interest rate at the moment. In the future though when they get to the age where the money needs to be sorted by them I think it would become very difficult if they are not capable of making decisions. I suppose I just answered my own question.

joedenise

Mummy2cheekymonkeys said:

This is an interesting thread to read. When my youngest was born and my eldest was 1 I opened them both a savings account each. I have been saving into them now for 3 years. Since then both boys have been diagnosed with learning difficulties and I am wondering what to do. Do I continue to save in their name or move it to an account in my name. They get a good interest rate at the moment. In the future though when they get to the age where the money needs to be sorted by them I think it would become very difficult if they are not capable of making decisions. I suppose I just answered my own question.

I think I would leave it where it is for the time being as interest rates are rubbish at the moment for adults; then move it when they are a bit older or when interest rates rise to a better rate into your name.

Mummy2cheekymonkeys

joedenise said:

Mummy2cheekymonkeys said:

This is an interesting thread to read. When my youngest was born and my eldest was 1 I opened them both a savings account each. I have been saving into them now for 3 years. Since then both boys have been diagnosed with learning difficulties and I am wondering what to do. Do I continue to save in their name or move it to an account in my name. They get a good interest rate at the moment. In the future though when they get to the age where the money needs to be sorted by them I think it would become very difficult if they are not capable of making decisions. I suppose I just answered my own question.

I think I would leave it where it is for the time being as interest rates are rubbish at the moment for adults; then move it when they are a bit older or when interest rates rise to a better rate into your name.

This is what I am thinking is best. I will check the t&c and see what age they can start to maintain the account themselves and look to move it before then but keep it where it is for now as the rate is better then anything I could get. They are only 4 and 3 years old so have a long time yet and hopefully things will change with their development. 

maman

Mummy2cheekymonkeys said:

This is what I am thinking is best. I will check the t&c and see what age they can start to maintain the account themselves and look to move it before then but keep it where it is for now as the rate is better then anything I could get. They are only 4 and 3 years old so have a long time yet and hopefully things will change with their development. 

I'd agree. Don't do anything yet. I think it will all be sorted by time they reach 18. I think the government is working on it at the moment.
I don't remember all the details but the first children to qualify for the Child Trust Fund have just reached 18 and those with learning difficulties faced the problem you are concerned about. I know Ed Davey, Lib Dem leader, is involved as he has a son in that position. You might find more information online. 

Marvel1

I'm in the the why should we not group, I had too and made me more independent.

snowbird20

I am 62 and my children are older (40-30) so here is my advice:  save, save, save.  But not necessarily for your chilldren.  Save YOUR money, keep it at YOUR disposal, use it for YOUR needs if you need to.  You can never have too much money saved for retirement.  Then if your children need assistance at some point, you can help them.   You will know which are or are not financially responsible and in what circumstances it is help or just 'rewarding bad behavior'.

Mummy2cheekymonkeys

maman said:

Mummy2cheekymonkeys said:

This is what I am thinking is best. I will check the t&c and see what age they can start to maintain the account themselves and look to move it before then but keep it where it is for now as the rate is better then anything I could get. They are only 4 and 3 years old so have a long time yet and hopefully things will change with their development. 

I'd agree. Don't do anything yet. I think it will all be sorted by time they reach 18. I think the government is working on it at the moment.
I don't remember all the details but the first children to qualify for the Child Trust Fund have just reached 18 and those with learning difficulties faced the problem you are concerned about. I know Ed Davey, Lib Dem leader, is involved as he has a son in that position. You might find more information online. 

Thank you, I will keep an eye out. 

[Deleted User]

snowbird20 said:

I am 62 and my children are older (40-30) so here is my advice:  save, save, save.  But not necessarily for your chilldren.  Save YOUR money, keep it at YOUR disposal, use it for YOUR needs if you need to.  You can never have too much money saved for retirement.  Then if your children need assistance at some point, you can help them.   You will know which are or are not financially responsible and in what circumstances it is help or just 'rewarding bad behavior'.

Thanks. It's reassuring to read this, as I sometimes feel there is pressure to set the kids up financially even if it means compromising our own financial security.

I want them to have a small savings pot, to learn how to manage money, and of course I want to be in a strong position to help them out if need be. I think your approach is most closely aligned to what I was kind of thinking.