Is it right to save for kids?

wondercollie

@maman yes, it's different in Canada.  Family Allowance has now been replaced by something called Child Tax Credits.  When my two were little we got $32/month.  Didn't go far, a snowsuit could cost $60 easily and winter boots another 30.  There were no extras for being a stay at home Mum
I find it interesting as well.  My husband's mother is sitting on around $7.5 million and just doesn't get it that things are expensive now adays.  Her husband was still in the mindset that children flew for half price on airlines and couldn't understand why we'd drive for 14 hours to visit!  $1600 in air fare plus a car rental at their end  or the drive and maybe $200 in gas/petrol.  She's upset that her grandchildren don't own homes, our mortgages require a minimum of 5% down and then insurance on the mortgage if you don't put down 25% of the house price.  One son managed the 25% and the other just missed it at only have 21% of his house purchase.
We've money put away.  The husband is on a full military pension, I'll get 50% of it continuing if I outlive him as he will get 50% of my pension if he outlives me.  We plan on selling our place eventually.  It's too big but our sons have said they'd like first refusal of the house.  We have just about a 1/3 acre in a city and there will never be housing lots this size again.
I've known people who have paid for everything for their children.  All university fees and for their cars and apartments while in uni.  It hasn't made them better people.  I could tell horror stories about one young woman I know.

Rosa_Damascena

wondercollie said:

I've known people who have paid for everything for their children.  All university fees and for their cars and apartments while in uni.  It hasn't made them better people.  I could tell horror stories about one young woman I know.

On the other hand for some of us it's worked out different (fully funded but no luxuries such as cars, plus my fees were state-funded which looking back is such a privilege). I'm now planning on looking after my parents and happy to. 

Spendless

I have 2, now 21 (at Uni) and 18 (at college). Like another poster one of mine qualified for the CTF the other didn't but the other way round, the scheme wasn't in when eldest was born. We saved from them being little but not a great deal. A recession kicking in around the time youngest went to f-time school meant me not being in or dipping in and out of work for all their childhood. A situation that remains, me having lost my last job within a week of lockdown 1. I also wouldn't top up the CTF as it's the child's on their 18th to do with as they wish and I wanted more control than that over money I'd contributed. 

At 18 eldest went to Uni and had passed his driving test (we paid for lessons as a Xmas/birthday present). He receives the min loan, so we pay his rent. We gave him the couple of thousand we had saved then, and it got him through his first year or so, until a pandemic hit and he found himself paying over the odds for groceries in the shops he could walk to as he'd chosen not to return home. With his buffer now gone, he found some online work, which tops up his maintenance loan.

For the younger one the pandemic has also had a negative effect on her education, along with a serious of issues at her college, caused by staff absences. Due to what she wants to do, we are now looking at privately funding a year. Her 'nest egg' that's a similar amount to her brothers will be needed to support her living costs  until she can find some p-time work. 

Over the last few years both me and DH have had moderate windfalls and we've allocated some of that to 'fund the children' if need be. It's not been put into kids accounts, they came after we'd given DS his money and it's this we can use to privately fund DD for a year. We've made her aware of it, but said after that it is gone, the money is only available once. DS in now a year from graduating and then will be f-time job hunting. He *might* need a helping hand as he transitions from student to employee so again we have some available but we wouldn't just hand it over.

So should you save - the question asked. I think for me the answer is yes if you can but not necessarily solely in an account that becomes  the child's at 18.  You could do a mix of match of some in their name, separate accounts in yours for the purpose of the kids. Just save in yours but with the ability to step in when they're older as and when they could do with a 'leg up' . Years ago I read on this sort of topic, someone saying they didn't save anything, but instead made vast overpayments on their mortgage which would then finish as the eldest hit 18, and then mortgage free they'd be able to help each child along. 

Also at the point you've got a newborn you don't know where interests and expenses etc are going to lie. Godson from the time he no longer needed childcare (so Secondary school) lived round the corner from school, so walked, commuted via a subsidised coach for his 2 years at sixth form and then lived at home for the 4 years he did a degree. After he stopped requiring a child minder there was little costs beyond 'everyday' expenses.  His parents have recently given him money for a house deposit. Another friend has a child at the Royal ballet school. Though he has a scholarship, there's still quite a bit of parental contribution required. Friend didn't know at the point he was born what a fantastic talent he would have and she would spend a lot of money throughout his childhood on this. I doubt she'll be in a position to help with a house deposit in the same way my first friend has because the pair of them have had wildly different situations during their sons childhoods, even iof their household incomes are similar.

2childmum2

Back in the day we were credited NI contributions at the age of 16 if we were at school.  I had no idea about this until recently, but found I had NI contributions dating back to then - I actually phoned HMRC to check about it and they told me this was where they came from - the lass sounded less than enthusiastic about it!

I also had my uni degree paid for, received a grant, could sign on in the summer and got housing benefit - unlike my DS (graduated last year) and DD (supposedly at uni but stuck at home since the beginning of December).  We saved for them, and then gave them both a lump sum when they started at uni, which they choose how to spend (they only get the minimum loan) - so if they want a more expensive house they have to cut back somewhere else.  Both are good with money.   Both were also told that we would not be able to support them beyond their first degree - if they want to go on studying they would need to find funding themselves, which DS has done.  Both are studying science, which has a lot of teaching hours, and also a lot of  work which has to completed each week, and we wanted them to enjoy other opportunities whilst at uni (in the way we did   were able to) so we are pleased we can fund them without them having to work.

snowbird20

wondercollie said:

I find it interesting as well.  My husband's mother is sitting on around $7.5 million and just doesn't get it that things are expensive now adays.  Her husband was still in the mindset that children flew for half price on airlines and couldn't understand why we'd drive for 14 hours to visit!  $1600 in air fare plus a car rental at their end  or the drive and maybe $200 in gas/petrol.  She's upset that her grandchildren don't own homes, our mortgages require a minimum of 5% down and then insurance on the mortgage if you don't put down 25% of the house price.  One son managed the 25% and the other just missed it at only have 21% of his house purchase.

this sounds like my mother-in-law.  $20million (literally) and she won't help her own children in any way.  She's a tiny bit more generous with some of her grandchildren but not all of them and not much.  She sees them struggling and does nothing to help, including the family with an autistic child that struggled to get good services for the boy for many years.   And we've been told that when she dies, she has set up some 'income stream' trust funds that won't nearly be adequate for anyone.   She never gave my husband or his sister a damn dime--she was that rich and wouldn't even help them pay for college/medical school.

[Deleted User]

I don’t save for my children. Their grandparents put around £25 per child per month into accounts for them and they received some inheritance a while ago which went in there, but I don’t personally save into them. Child benefit goes into the household pot and contributes to them being in a safe, warm home with clothes to wear and food to eat. I personally couldn’t afford not to have that money at the moment. I save into my own savings account which is of course for our future as a family, not just mine, and overpay my mortgage so we have security in that way. The way we live our lives mean that what money can buy in terms of ‘stuff’ doesn’t mean anything - we make memories. 

When I went to university I had no help from my mum (single parent), all of my loan went on my accommodation and I had two jobs, one in a shop and one in a pub, whilst studying for a law degree. Having that work ethic and can do attitude never did me any harm and nor will it harm my children when the time comes. I teach in a large comp and the sense of entitlement is insane, even in those kids who I know their parents are on the breadline. 

[Deleted User]

Deleted_User said:

When I went to university I had no help from my mum (single parent), all of my loan went on my accommodation and I had two jobs, one in a shop and one in a pub, whilst studying for a law degree. Having that work ethic and can do attitude never did me any harm and nor will it harm my children when the time comes. I teach in a large comp and the sense of entitlement is insane, even in those kids who I know their parents are on the breadline. 

I totally hear you.

This is kind of what I was thinking when I started this thread. I too have seen teenagers who've been given everything, and those that have had to achieve what they want largely on their own (moral support from family, but not much of any other kind simply down to means). The ones that have come out best in whatever they choose to do are the ones that kind of had to. But of course that's just my experience, and I recognise that doesn't make it the norm necessarily. 

I also recognise that times have changed though, so what worked for me might not be right for my kids. It's a toughy. I think the answer is simple though. Stash away a token amount for them, but mostly focusing on my own financial standing. I don't think that's selfish, as of course I'll help them out when I can, as long as I can see that they're willing to put the effort in too. 

Spendless

It's worth remembering if your kids go to Uni that the way the student maintenance loan works is that the amount the student receives is based on the household income of where student lives so parent(s)/step-parent income. There is an 'expectation'  though no obligation that parent(s) will top up the difference. It's not always within the student offsprings grasp to get a p-time job around their coursework, it depends on  things like what course they are doing, some are more 'full-on' than others.

 I know several parents who have been caught out this way, income on paper too high for their child to get much of a maintenance loan but not in a financial position to be able to help out. In the cases I know the child has been asked to remain at home and commute to a local Uni - which might not have been the best choice for the course they want to do. Having some money 'ring-fenced' for this sort of situation could be helpful. 

VJsmum

My two did not get jobs at uni - DD was advised not to by the course as it was very intense.  DS is not terribly academic and did not need the distraction of work too.  Although we did save for them, it was a drop in the ocean of the real costs of them being away.  DD's uni was in outer london so living costs were much higher than DS's who was in Liverpool.

We have decided (and are in the fortunate position to be able to) that any inheritance coming OH's way from his mother will go into trust mainly for the benefit of the two children.  Going into trust means that we have some control over it and it will protect them from an unscrupulous partner (they are still fairly young and we have no idea about future relationships - MiL is nearly 90 so we believe we are being prudent).  It is likely that this money will aid them get a deposit - though, of course, MiL may live many years yet and they might be on the ladder already by then.

Rosa_Damascena

Mickey666 said:

Just bear in mind that children don't choose to be born.   I probably won't be popular for saying I believe that parents who cannot adequately support their children are irresponsible to have them in the first place.  But of course, irresponsible parenting is not a new thing and I'm sure we've all seen it somewhere or other.  I find it almost inconceivable (ha!) that parents would NOT wish to do whatever they can to help their little darlings have a better and easier life than their own.

They don't, but nor should they have to suffer an additional premium for their parents' misfortunes / life choices. If I had kids they would come first.