Do I use childrens savings to pay off debt?

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Comments

  • amazamum
    amazamum Posts: 287 Forumite
    Chappers,I think you have got the wrong end of the stick.
    As we have an offset mortgage,we are not touching the kids money,we are not using it to pay the mortgage,it is just saving us interest by offsetting,the accounts are in their names and not to be touched or withdrawn on until they are 18.
    As we are doing it this way the mortgage will be paid off earlier than expected and the money that would have gone on mortgage payments will be used towards the kids going to university if they want to or to help them when they come to buy a house.
    Mfit member no 13 original balance £44000 :mad:
    current Mortgage balance 13537:T
  • Keeping_Positive
    Keeping_Positive Posts: 4,750 Forumite
    First Post First Anniversary Combo Breaker PPI Party Pooper
    I have bitten the bullet and borrowed the money. I asked the girls and explained that I would pay them back in 5 years at 10% interest which should be as high if not higher than what they would get in the best savings account. They were happy and I wouldnt have done it if not.

    In the long run I will pay more because my loan in 7% but I will have access to the money via the shares then and I will be happy to make up for the years of not paying money in.

    Between this and downsizing our car we should be able to reduce our dfd to 3.5-4 years against the current 6.

    Thank you all for your input I do feel a guilty for having to borrow from them. My DD1 is starting to really think money decisions through. So hoping she will be a good MSEer!
    :j
    May 2013 new beginnings:j
  • Tiger_greeneyes
    Tiger_greeneyes Posts: 1,377 Forumite
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    I think whatever is good for you is also good for your children. If you're financially secure and they've helped get you there by lending you their savings, they'll reap the benefits because you'll have more money to treat them with or take them on holiday with.

    The most important thing (and most valuable thing) in borrowing their money is that they'll learn about bank accounts, interest rates, loans etc, and may well become far more financially astute themselves.

    I don't see the point of a 7 year old having £500 in the bank while you're paying £50 a month on credit card interest (for instance). I'd rather borrow the money and pay the child back - let them have the interest rather than giving it to the credit card company.
  • painted_lady
    painted_lady Posts: 1,020 Forumite
    First Post
    I probably wouldnt use my boys money, unless it meant he wouldnt have a roof over his head or food in his stomach. It might seem wrong now, but when he wants to go to uni, learn to drive, start a business or whatever, I would be glad it stayed there. I totally see where your coming from, but if your managing then why bother?
  • Keeping_Positive
    Keeping_Positive Posts: 4,750 Forumite
    First Post First Anniversary Combo Breaker PPI Party Pooper
    We are managing but its a long way away at the moment. I have the work shares but cant use them for a few years. This way we can bring forward the dfd and pay the girls back with a good rate of interest. I dont think I would have gone with it unless we were struggling if I didnt have the shares as back up. There is a risk of course that the shares may be worthless in a few years but I cant see them being another Northern Rock.

    To be honest although I would feel terrible if it all went pear shaped. I know it wouldnt be because we were wreckless but a downturn in fortune. As many people say S*** happens and I pray my kids never have to deal with anything bad they will have to learn that the world can be tough. My OH and I will and have always tried our best for them.
    :j
    May 2013 new beginnings:j
  • englishmac
    englishmac Posts: 137 Forumite
    I think whatever is good for you is also good for your children. If you're financially secure and they've helped get you there by lending you their savings, they'll reap the benefits because you'll have more money to treat them with or take them on holiday with.

    The most important thing (and most valuable thing) in borrowing their money is that they'll learn about bank accounts, interest rates, loans etc, and may well become far more financially astute themselves.

    I don't see the point of a 7 year old having £500 in the bank while you're paying £50 a month on credit card interest (for instance). I'd rather borrow the money and pay the child back - let them have the interest rather than giving it to the credit card company.
    They will benefit from more than financial security as well. The stress that money issues create have a detrimental effect on people, whether they are conscious of it or not. It invariably spills over into all areas of life. A happy family environment is priceless. 'The best things in life are free' is an oft used saying but little notice is taken of the true meaning of it. A happy stable childhood is more important than savings.
    Cheap and cheerful. Preferably free. :T LBM - more a gradual rude awakening.
    DFD where the light is at the end of this very long tunnel - there, see it? Its getting brighter!! :o

    DFW Nerd Club Member no. 946. Proud To Be Dealing With My Debts. :D
  • Buffythedebtslayer
    Buffythedebtslayer Posts: 18,921 Forumite
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    I would rather my parents be less worried abut every single penny and were more relaxed happy people, then have most of my childhood (six years is a long time!) with them being restricted and worried.

    you are going to pay them back, times are tough, its a bit bonkers to pay interest on loads of money when you have savings.

    Good Luck Wendyxx
    Nevertheless she persisted.
  • Tiger_greeneyes
    Tiger_greeneyes Posts: 1,377 Forumite
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    wendy24g wrote: »
    My OH and I will and have always tried our best for them.
    I'm sure they will completely understand that :)

    Never be frightened to explain things to kids, they understand far more than we think they will and it'll explain to them why you seem preoccupied or worried at times :)

    My brother and I grew up in the 70's - dad was severely disabled through illness and mum wasn't able to work as she had dad and two small kids to look after. Money was incredibly tight but my brother and I were well aware of that from a very early age. We didn't suffer for knowing it, not for a second, quite the opposite, we completely understood and didn't demand or expect anything. We also know the value of money now :)
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