Do I use childrens savings to pay off debt?

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  • shellsuit
    shellsuit Posts: 24,749 Forumite
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    I'd only use kids savings if it meant not having a roof over our heads, or food in our tummys.

    I've borrowed money from mine before, but only because I know I can repay it a few days later.
    Tank fly boss walk jam nitty gritty...
  • savingqueen
    savingqueen Posts: 1,715 Forumite
    Combo Breaker First Post
    I have to say that I would have no hesitation in dipping into our children's savings if it meant we would avoid bank charges/interest or needed something important urgently and didn't have the resources to buy it. Our children are too young to know they have savings - older children would be different. I would always ensure the money was paid back asap with generous interest. We work as a family unit and anything we borrowed from our children's savings would only be for their benefit even if indirectly. Unfortunately we have no choice but to be practical on our budget eg. we used some of our wedding gift vouchers a few years ago to buy family Xmas gifts as we could buy what we needed more cheaply from ebay or other shops. Our main priority is our children's welfare and happiness and keeping a roof over their head and out of debt is part of that. I wouldn't feel an ounce of guilt for borrowing savings like this in the short term.
  • Lenfo
    Lenfo Posts: 15 Forumite
    I would be inclined to use the savings to bring forward your DFD - make a note of how much you have 'borrowed' from the kids and pay it back with interest when you can.

    IMO anything that brings forward DFD, and reduces the money you 'waste' on interest servicing your debt, has got to be good.

    Presumably you don't have savings of your own?

    As Martin says in his articles - savings and debts should never both exist at the same time!
  • evab_2
    evab_2 Posts: 2,336 Forumite
    At first I thought yes no problem if it was desperate, my parents used our savings when we were kids but it was either that or no food and no house. My mum was still able to give me a nice lump sum when I got married.

    However you say that you have a manageable income and budget, is there anything else you can do here first e.g. overpay or save up the balance? Is this your only debt? I would really think about seeing if you can make any focused cutbacks, and thinking about your spending e.g. thinking before buying something 'is this necessary or shall I put the money towards the loan'.

    I'm glad that I can't touch my daughters money as it would have gone by now and have nothing to show for it.

    Best wishes whatever you decide, Ev
  • Merlot
    Merlot Posts: 1,890 Forumite
    I'm going to say use the childrens savings (only if they don't know how much they have in) to repay your debts, it will bring your DFD forward and to be honest £650 per child in 6 years time, when your eldest is 16 will be the equivalent of a couple of hundred quid now, they won't be able to do much with it.

    If you are not having a holiday or haven't had a holiday for some time I would also consider using the money for this, childhoods are precious and limited, the children will remember the memories and won't give it a thought why you haven't given them a wee handout, I never got a handout, and neither will my children, they will need to learn that money is too be earned.

    If you do want to keep the savings, the Halifax have a regular childrens saving account which did pay 10%, (I'm not sure of the rate now), Martin recommended it last year, I'll try and find the link, if you put the money into the regular saving scheme, use the interest received to throw at your debts.

    The link to the Halifax childrens saving account - 10% interest http://www.halifax.co.uk/savings/childregularsaver.asp

    Merlot.x.
    "Wisdom doesn't automatically come with old age. Nothing does, except wrinkles. It's true, some wines improve with age. But only if the grapes were good in the first place." — Abigail Van Buren
  • roo291
    roo291 Posts: 14 Forumite
    I say sit them down and explain it to them - then pay them back by setting up the halifax regular saver (even if it is one between them ) which you can put from £25 a month.

    I recycle my childrens savings through this 10% account. Each year when it pays out I move the money to another bank then pay it back to the halifax at the maximum figure of £100/month

    Paying then interest and teaching them about money has to be better then giving the money to the bank.

    By talking to them you are committed to paying them back on an agreed schedule so they can't look back in years to come and feel hard done by. My dad loaned me the money to buy my first car that I paid back at the same monthly rate that the bank had wanted but he never charged the interested. It was a great lesson for me in making a regular payment - maybe it will work the other way round.
  • Merlot
    Merlot Posts: 1,890 Forumite
    I do exactly the same roo291, I have four accounts for my two children, I'm trustee of two and so is my OH, the interest pays for Xmas. 65 x 4 = 260. The only thing is they don't know about these two accounts, they only know about the Save for It account which you have to open at the same time.
    "Wisdom doesn't automatically come with old age. Nothing does, except wrinkles. It's true, some wines improve with age. But only if the grapes were good in the first place." — Abigail Van Buren
  • Paige
    Paige Posts: 266 Forumite
    First Anniversary Combo Breaker
    I think you should leave the money unless your situation become dire. Like other people here I have borrowed an odd £10 off one of my daughters to pay the window cleaner or pizza delivery until I can get to a cash point. My DD'S are 13 and 15 and have both a lot of savings. This is from Birthday and Christmas presents and I would not borrow it unless I could
  • Paige
    Paige Posts: 266 Forumite
    First Anniversary Combo Breaker
    I think you should leave the money unless your situation become dire. Like other people here I have borrowed an odd £10 off one of my daughters to pay the window cleaner or pizza delivery until I can get to a cash point. My DD'S are 13 and 15 and have both a lot of savings. This is from Birthday and Christmas presents and I would not borrow it unless I could not put food on the table.
  • Paige
    Paige Posts: 266 Forumite
    First Anniversary Combo Breaker
    Sorry sneezed and hit key by mistake !!!
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