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Do I use childrens savings to pay off debt?

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Do I use childrens savings to pay off debt?

edited 30 November -1 at 1:00AM in Debt-Free Wannabe
48 replies 12.6K views
Keeping_PositiveKeeping_Positive Forumite
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edited 30 November -1 at 1:00AM in Debt-Free Wannabe
Hi

I have three children 10 7 and 5 with dormant savings accounts currently getting 4.98 aer a year. I cant touch the youngest but the older two can take money out if they want (they dont know this). Do I use the £1.3k to pay towards my loan currently fixed at 6.9 APR and pay them back when I am debt free or just leave it?

I havent paid anything in to the accounts for a few years now while struggling with monies. We are now on an even keal with good wages and good budget thats been working for six months now.

The loan payments wont reduce but it would bring forward dfd including lowering interest paid.

Is this sensible moneysaving or selfish? I am 50/50 on it. Logic says using loan most cash efficient but heart says not fair to use the kids money (all from us not other relatives).

Thanks for reading and your opinions.

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Replies

  • If the accounts are in the names of your offspring, then you should only withdraw the money for their benefit
    [strike]Debt @ LBM 04/07 £14,804[/strike]01/08 [strike]£10,472[/strike]now debt free:j

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  • (Land_of)_Maz(Land_of)_Maz Forumite
    11.7K posts
    Hi there, if you are on an even keel i would say no....... if it was desperate and a matter of life n death or rent and groceries then maybe... but as you seem to be over the worst i would say that if you can, leave it.

    It's only going to bring your DFD forward not avert a creditor crisis or CCJ or anything, so i think i'd try not to.

    That said my DD has got a few hundred in the bank and i am regularly down to the coins in my purse... i have "borrowed" from her piggy bank hard cash (£5/10) but never taken it out of her bank unless it was to specifically buy her something, or for her holiday spends.

    And i try to put the cash back in plus a couple of quid once i'm in the black again.

    Good question, can't wait to see the answers!
    I'm just a seething mass of contradictions....
    (it's part of my charm!)
  • rayday2rayday2 Forumite
    4K posts
    If you can't touch the youngest but you can the eldest then no its not fair. Also your eldest will need the money sooner than the youngest.

    Unless its an emergency definately no. You have already said that you have not paid in them for ages so chances are you will not be able to replace or compensate them in lost interest for years.
  • i agree with the others onthis one, that as your debt isn't serious and the money wouldn't make a huge difference i think leave it. However if it meant a huge difference i would have said yes, i figure what is the point of your children having savings if they end up homeless?!
  • If you need the money to keepa roof over your head and food on the table then taking the money is best for everyone,if not then leave it alone.
    Barclaycard 3800

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  • CleosmumCleosmum Forumite
    2.7K posts
    I have used £20 from the kids accounts when things have been dire ie no food but I have always paid it back in as soon as my money is sorted, usually within a week. I would say dont use it to pay off debts.
  • I would personnally leave the money where it is unless it was a real emergency. You will dip into it to pay off your debts and will never have the money to put back again, something will always come up.

    Mum done that to our bank accounts when we were younger, a few quid here and a few quid there with the intentions of paying it back, by the time we were old enough to understand all we had left in the account was coppers and absolutely nothing to show for it.

    Think of their faces if the same happens with you, how are they going to feel? I know how I felt.
  • LilacPixieLilacPixie Forumite
    8.1K posts
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    As you are on an even keel again and you have a working budget then no i would leave them where it is.

    Its totally different if the money would stave off eviction or something.
    MF aim 10th December 2020 :j:eek:
    MFW 2012 no86 OP 0/2000 :D
  • As the general consensus has been to leave the money alone might I suggest you move it to a better account for them as they don't seem to be paying much interest. Also don't forget to fill in a form stating they don't need to pay tax. Well they won't if they don't earn over the tax limit anyway - I don't think banks do this - I think you need to ask specifically for the form. Anyway I'm sure Martin has a good article on children's savings accounts somewhere. Think what a difference a good interest rate will make - especially since they don't have to pay tax at the moment.

    Martin's article is here;
    http://www.moneysavingexpert.com/savings/child-savings-tax-free
    Making my money go further with MSE :j
    How much can I save in 2012 challenge
    75/1200 :eek:
  • rayday2rayday2 Forumite
    4K posts
    I would personnally leave the money where it is unless it was a real emergency. You will dip into it to pay off your debts and will never have the money to put back again, something will always come up.

    Mum done that to our bank accounts when we were younger, a few quid here and a few quid there with the intentions of paying it back, by the time we were old enough to understand all we had left in the account was coppers and absolutely nothing to show for it.

    Think of their faces if the same happens with you, how are they going to feel? I know how I felt.

    Same happened to us as children but really narks me is that well meaning auties and friends of the family had given us cheques as presents especially me with a birthday days after Christmas.

    Last year I did raid the childrens savings as MIL was in intensive care on life support and we had no spare cash for hotel. I felt really bad at the time - happily I can say now there is more in there than this time last year but it still worries me they will see those outgoigns in the bank books.
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