Evening out children's savings accounts - help me with maths!

eskbanker

hieveryone said:

eskbanker said:

hieveryone said:

eskbanker said:

It did seem odd that you were referring to 'evening out' accounts that were already even!

I should have added that in order to model things accurately, the interest rate should be factored in, assuming that you're using accounts that pay worthwhile interest?

Yes sorry maybe I am overthinking this! 

What I meant was, assuming I'd started saving from the month each of them was born, they would have different amounts by now (as one is double the age of the other). So I started to think, should I even them out now at this stage, so that each month, they both get the same input from now on. 

In mathematical terms, you could simply move £500 from one to the other, so that the elder would have £2K and the younger £1K, in proportion to their ages, but if the money is in accounts in their names, you wouldn't be permitted to do this.

Thank you, I don't think that would even out the monthly payments to make them the same each month? 

If you're hoping to pay them the same monthly amount as each other from now then no, there isn't such a number if you're starting from the same balance at 8 and 4, and aiming for the same balance when they each reach 18.

Rheumatoid

Keep paying in the same for both and adjust the amount the 96 month old gets when they are 18 so that you give the 48 month old the same plus adjustment for 48 months inflation / interest

elkiedee

Stick with putting the same amount in both for now - if there's 4 years between them there might be big changes from when your kids are 18 and 14, you have no idea where inflation and interest rates will be in 2034. It would also be easier if you decide that your second child's likely to need more than your £10K goal at that point if you've stuck to paying in equal amounts. If you manage to put in £850 a year to each account from now, you will reach £10K in slightly less than 10 years with interest being paid as well. Or slightly more than £10K in 10 years.

Bigwheels1111

What a nice thing to do for your kids.
More importantly in my opinion is teaching them the meaning of money.
Putting the on the correct path.
My niece was given 3.5k on her 18th birthday, money her grandparents had put away via mum and dad.
It was all gone in under a month.
She has never had more than £500 in savings in her life since.
Every penny she gets she spunks it.

My dad acted as a rock for me.
I couldn’t save, would dip in and never top it up again.
So he acted as a bank, I gave him the money and he saved it.
If I needed a loan he gave me his money and it had to be paid back. I know it was my money he had given me but felt like his.
It worked out for me, at 31 I had enough savings to put a 15% deposit down on a house.
My dad matched my savings as he was proud of what I had achieved.
He found the house, solicitors etc, well everything. all I did was sign the paperwork and move in.
At 41and 5 months I think it was, I was mortgage free and debt free.

My circumstances changed and I needed to provide care for my best friend.
So rented the house and lived with friend.
I have now sold the property for 4 times what I paid and receive a nice income from savings, enough that I need to self assess each year.
I retired at 43 years old.

I give all credit to my dad for teaching and helping me to understand about life and money, especially money.
I hope you and the wife pass this on to your little ones.