Similiar stuff has crossed my mind. DH and I have arguments, as he wants us to put a lot of money in the girls account each month. I put in a small amount, but he wants it to be larger. Like you, I see getting the mortgage paid off as a priority. It benefits the whole family, the sooner we have that paid off. They get enough to ensure the bonus interest kicks in each month, as there always has to be 1 deposit.
I have been tempted like you, to have the girls money sit in the mortgage. MIL caught wind of that and got upset, which I understand, as some of the money as come from her. It does involve a whole level of trust, that we as parents do the right thing, but I suppose that also applies to where we are trustees of their accounts. I have, in one time of need, borrowed money and then returned it plus extra (Timing issue with new tyres and tax returns). It takes a lot of discipline and honesty to always remember it is their money.
The main thing to consider is the legalities of it. If everything goes bad and you lose your house, well they lose their money. If it is kept in trust for them, it should at least protect it for them. My father has accounts set-up for the girls and he did this on the advice that the money would be theirs, no matter what happens with his will when he passes.
As for the control thing, at this stage that money is for when they hit Uni age to help out if needed. We may revisit that over the years. When they are a bit older they will get their own everyday savings account for pocket money etc. Will probably see a financial planner when the amounts are over $5000 each to see what they recommend
Last edited by Astrid; September 10th, 2011 at 10:11 PM.
: more info
we recently transfered the girls money into our mortgage...DH keeps a spreadsheet with exactly how much is theirs and how much we put towards them, working so far!
we actually plan to use te money for private highschool if thats the route we decide to go or if we dont them we'll keep it and give it as a lump sum to go towards a house
My kids have had bank accounts since their births. They get $10 a fortnight transferred into them. It was a high interest account with no fees, but as soon as they hit $2000 in their bank they started getting slugged $4 account keeping fees each month, so I really need to look into changing their accounts to something else. Yes the interest they earn covers that $4 a month but that is not the point.
We are considering waiting until they are 25 before they receive their money. We would hope they have settled a bit by then and know what they want from life, instead of giving it to them at 18 and having them blow it iykwim. At the age of 25 and just based on the $10 a fortnight with no interest at all they would have $6500 minimum. We're still not sure if we will give them the actual cash or say "We have $6500 for you what would you like to buy or put it to"
This year we opened the boys a bank account each. We transfer money each week into their accounts. $1 for each year (DS#1 is 11 so he gets $11 a week, soon he will get $12 a week etc) of their age.
It is just a kids account at one of the major banks. They don't have any account fees and get ok interest (nothing huge)
At this stage we are happy with that. It can't be taken out unless we go into the bank.
They should each have about $15,000 by the time we give it to them. We will make up DS#1 and DS#2's balance to equal DS#3's balance due to starting his many years earlier.
As best I can, I might not have a lot of money but even if I got to the point of only giving him 5 cents pocket money, I would be explaining him how to manage money.
That might involve him knowing about our household finances as I'm currently a single Mum.
Thanks so much for your replies and for sharing your experiences/ideas.
Well, I’ve done it, I’ve cleaned them out. But I’ve recorded all the amounts so we know who owns what. DH and I will have a think about exactly what we want to set up for them and when. I figure we’ve got a few years thinking time before they really understand how money works and we’ll have something organised before then. In the meantime their money is working hard for us as a family reducing our mortgage.
DH is absolutely adamant that we will not be doing what our parents did for both of us (and what we had been previously doing for them) just chucking it all in an account. He reckons that by the time they’re old enough to use it, inflation will have wiped it out.
Our boys are 5 and 6 now and they are paying attention to their accounts and learning that if they spend the money they are given they save less. When they get older I might let them meet with a stockbroker and invest it but for now they are happy with watching it grow.
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But I’ve recorded all the amounts so we know who owns what. DH and I will have a think about exactly what we want to set up for them and when. I figure we’ve got a few years thinking time before they really understand how money works and we’ll have something organised before then. In the meantime their money is working hard for us as a family reducing our mortgage.
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