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Kids Savings Accounts
What is your purpose ?

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#1 ELH05

Posted 22 January 2013 - 10:12 AM

When DS was born, we opened a savings account and have deposited money weekly into the account.  Have been thinking about the account and what the money should ultimately be used for ?  initially the thought was that we would deposit money every week and the money would go to him when he was much much older to assist with a large purchase I.e. first car or maybe when he turns 18 for a house deposit (yes I'm thinking really long term!).  But now I'm thinking should it be used to help pay for school fees as we are thinking about sending him to a to private school....

What is your intention with your kids savings accounts?

#2 CupOfCoffee

Posted 22 January 2013 - 10:16 AM

My son has access to his account when he leaves grade 12, he can use it for travel, a house, or for HECS.  He is not allowed to spend it on clothing, a car or a new gaming system.

I actually expect that he will spend it on travel for a year, which I am encouraging.   (He is entering year 10 this year, so it isn't really that far away).

If I was saving for schooling, I would do that separately, but it depends on what you want to do (it is your money).

#3 SuboptimallyPooks

Posted 22 January 2013 - 10:23 AM

For us- To have some money aside to support him in his future... Such as private education, tutoring, going on exchange overseas, TAFE fees, a car to get to work and back, things like that. My parents used the money they had aside to pay for dental work for me which was a wonderful use of the money.

#4 BadCat

Posted 22 January 2013 - 10:29 AM

I'll encourage my kids to use it towards a home deposit.  I'm actually considering investing it in property for them at the moment.  Between them they could probably pay the deposit and legals on a one bed unit, then the regular saving would go to any shortfall of rent against the mortgage.

I wouldn't personally use it for their education for two reasons.  Firstly there is no way I would send them to private school.  Secondly it's their money.  And childhood expenses get paid out of my money not theirs.

But that is only my take on it based on our financial position and philosophy.  You should obviously do what will suit your own family best.

#5 EsmeLennox

Posted 22 January 2013 - 10:33 AM

I will encourage them to use it to set up house or buy a car or to pay for something else important to them (could even be an overseas trip) etc. What they ultimately do with it will be up to them, it is their money after all. If they choose to p*ss it up against the wall then that will be their loss and their lesson to learn.

#6 Ally'smum

Posted 22 January 2013 - 10:43 AM

We are having the same thoughts.

Basically we have decided that it is money put aside to benefit DD, so that includes private school fees, travel, car, house, uni fees etc. It is not going to be a cash gift given in a lump sum, (for this reason it is also not in her name, although we should probably also open her an account as well).

I can't think of anything that would benefit a child more long term than a good education, so I have no problems spending it on that. There may be health or other emergencies.

I don't see it as her money, but our money that we are putting away specifically to benefit her. I see no reason to give a child a large cash gift, but I would like to be able to help her with some things across her life.

#7 2anewme

Posted 22 January 2013 - 10:52 AM

our will have access to it when they are 21 (given circumstances and maturity).  It will not be used for a car.

it would be my hope that the money would be used as a deposit on a property or as fund for an overseas trip.

It is their money...however I am the gatekeeper for now.

#8 MrsLexiK

Posted 22 January 2013 - 10:55 AM

DH and I were speaking about this the other day, I said I would like to put some money into an account $10 or whatever a week or forntight, for this baby.  I said we could use it for a car, for him/her (which DH was not keen on, he got a part time job and brought his car he thinks our child should do the same) he didn't mind the idea of using it though to pay for sport fees/camps/dance stuff etc if our child showed a good interest in something - those things are expensive and do add up.  I wouldn't do this with money that was given to them as a present though - that is their money and their money to keep.  This money I is just money we are talking about putting away, we are not giving it to our child - yet.

#9 joolz

Posted 22 January 2013 - 03:52 PM

Im putting a wee bit away for my two in an online account each fortnight. Id like to be able to give them some money in the future for a house deposit.
Overseas trips, well they can work at Safeway for a year and save for that themselves!!

#10 SeaPrincess

Posted 22 January 2013 - 05:27 PM

We have no particular plan, but I know when my cousin's DD wanted music lessons, they bought her expensive instrument.  I imagine we might draw on it for something like that if we had to, or maybe school trips, otherwise it's just growing steadily. DH actually would prefer the money in our offset, but he doesn't transfer the money and can't access it, so he doesn't know what's in their accounts anyway.

#11 wildflowers

Posted 22 January 2013 - 06:02 PM

We put savings into our girls accounts and they can have it when they are 18.  I am hoping they will use it to buy a car and we will also pay some money so they get a reliable car. They know about the savings account.

My parents had an account for which I used to buy a car.  I used my own money to travel overseas after I had a job.

#12 JRA

Posted 22 January 2013 - 06:44 PM

We are different, we don't have an account that we put away for DS.  All the things that people have suggested, we will do, if appropriate, but we don't want to lock money away for that.

We try and make the most of our money (not always successfully). So we would prefer to invest in something with better return, which will help everyone in the long term. If we had a mortgage for instance, the money would be better if it was on the mortgage than in an account for DS. A lot better return, and more tax affective.

#13 Super Cat

Posted 22 January 2013 - 06:48 PM

Our guys love doing school banking. I think the act of doing it each week teaches good savings habits. We will probably encourage them I use it for a car. That way they can get to work/uni as they need.

#14 Peppery

Posted 22 January 2013 - 07:00 PM

I have set up a savings account for my DD and I make weekly deposits. I do not intend on telling her about the account. I will give the money to her when she is 21 or possibly older depending upon what is happening in her life
My parents have also set up an account for her and they intend on giving her the money she is 18.

#15 cheekymonkeysmum

Posted 22 January 2013 - 07:11 PM

We opened a bank account when ds was born and when family members give him nonrandom births Christmas it goes there to we are going of using it for school fees and camps  etc that's what our first thought was and still is.

If we could afford to give ds a car or house yeah that would be great but we are putting towards his education when he is old enough to buy a car/first home either rent or buy we most likely will help him but he isn't just going to be handed one dp and I worked for our cars and homes I know that might sound mean but I just don't want to be giving him things and not know what it's like to work for things.

#16 Lyn29

Posted 22 January 2013 - 08:20 PM


Edited by bye, 29 March 2013 - 02:50 PM.

#17 Spa Gonk

Posted 22 January 2013 - 09:22 PM

I use it to teach about saving and banks.  And then when they get older we can talk about interest.

I actually don't want them to have a massive amount in the bank from us when they turn 18.  I am like JRA and we put extra money into what we want to, knowing that we need to adequately support our kids for many more years.  I want to teach them about earning their own obey, paying there own way and don't want them blowing heaps of cash or dictating what they might spend it on.  I am not sure how it works if one sibling does not want a car or house, or another embarks on a very expensive course of studies and the others don't.

I use it to teach about saving and banks.  And then when they get older we can talk about interest.

I actually don't want them to have a massive amount in the bank from us when they turn 18.  I am like JRA and we put extra money into what we want to, knowing that we need to adequately support our kids for many more years.  I want to teach them about earning their own obey, paying there own way and don't want them blowing heaps of cash or dictating what they might spend it on.  I am not sure how it works if one sibling does not want a car or house, or another embarks on a very expensive course of studies and the others don't.

#18 fairymagic

Posted 22 January 2013 - 09:33 PM

We too have been putting money into our three children's bank accounts since birth. DH wasn't too keen but if in an emergency we can access the money.

DH is adamant that the money not be used to buy a car. Neither of us had our parents buy our first cars - we had to save the money ourselves for that. I kind of agree with him re that. I guess if it becomes dependent on him being able to get to his/her job we may reconsider.

At this stage we are looking at using the money to pay for University costs (should they choose to go). Be that for text books or other costs. Same if they choose some sort of other study after high school.

Other than that, we may give them the money as a gift when they buy their first home. They can use the money as they see fit then -buying furniture etc. We haven't really decided yet.

Whilst the money is in their name we figure it is still our money and we have some right to what it is spent on. An overseas holiday once they finish school may be paid for out of that savings but we will wait and see what our children plan on doing at the end of their high schooling.

#19 libbylu

Posted 22 January 2013 - 09:39 PM

I am not a fan of putting money aside for kids to spend on what they like (even within some limits).  I think it is a recipe for disaster!  I never forget my mate who inherited $15,000 15 years ago from his grandma.  He blew it on a fancy car which he crashed and wrote off 3 months later - it wasn't insured.  I am sure he learned a really valuable lesson but what a waste! I would be devastated if my kid did that, and even the most sensible 18 year olds are not really that sensible!

Better to do both the below:
1. let kids have their own savings account where they put any money from christams, birthdays, pocket money or part time job money.  This is truly theirs and they can spend it on what they like.  This is the BEST way to teach kids the value of money.  It is built up slowly, often through hard work and they can watch it slowly grow as the years pass.

2. Put money aside for your kids in your own account for the purpose YOU deem fit, and keep control of it.  For example, if they do well in year 12 you may chose to hand some over for an overseas trip or a first car, but you can release it amounts that seem sensible for their circumstances at the time.

#20 MintyBiscuit

Posted 23 January 2013 - 08:04 AM

We have an account for DS that we put money into every fortnight. We also tend to throw coins in a money box for him and that goes in, as well as any gifts of money he might receive from family. It adds up quickly. At the moment it's just in a high interest savings account, but once there's a decent amount in there we'll look into other investment options.

As far as what it's for, we really don't know at this point. Schooling in my opinion of an expense for us to budget for, so it's not for that. We're undecided as to whether he'll have access at 18 or 21, although we will be telling him about the account when he's old enough to understand about money and saving. I think a lot will depend on what sort of personality he is when he's older, what he's like with money and what he wants to do with his life. We've talked about options like encouraging him to save for a car when he starts working and we'll match each dollar he saves, so it would probably be used for that. If he wants to go to uni it could help with those expenses, or travel expenses, or a house deposit.  Eventually it will all go to him for whatever he wants, and as far as I'm concerned it's our responsibility before that day comes to make sure he's responsible enough to not fritter it all away.

#21 skylark

Posted 23 January 2013 - 08:15 AM

Ours is for his high school education.

#22 WhatWouldBuffyDo

Posted 23 January 2013 - 08:27 AM

What ever they want. But, they will be told, once it's gone, it's gone.
I hope they use it to do things that DH and i weren't able to do while young (travel, buy a house etc).

I do hope that when they get their licenses, we will be in a position to buy them a car, however, i really don't think it is likely so that's why we opened their accounts. It'll be a start for them. They might have $20K by the time they get it (sometime between 18 and 22, depends on maturity levels) which won't be much in this day and age, but it's better than nothing.

I am going to be strict about money when they get jobs though. 20% of their income will be going into the savings accounts we have set up for them and the rest will be theirs. I want to foster good savings habits from as early as possible (something that DH is pushing for because his parents never spoke to him about money) and i would like them to get jobs as soon as they are able.

#23 raone

Posted 23 January 2013 - 08:28 AM

We just started one for DS.

It will be for tools or training courses if he decides to be a tradie like the rest of the family. Hecs but only once we are sure he will complete uni, have seen to many people quit after the first semester. For a house deposit only when he proves that he is responsible with money. He will not know about this account until I am ready to tell him. I am considering having another savings plan when he gets money he knows about so that I can teach him how to handle money. Taking him to the bank to put it in etc.

#24 ImpatientAnna

Posted 23 January 2013 - 08:37 AM

Barring something unfortunate happening, DS should have enough for a 20% deposit on a unit in a decent area in sydney. What I will be encouraging him to do if he decides to go to uni is buy an investment property with the money we give him, take out a hecs loan for uni as it is interest free (indexed) and money would work harder for him if invested. He would have to have a part time job to pay extras on the investment property and travel. Hopefully by this stage he would have been working for a few years and saved up enough for a crappy 1st car to get him from A to B. Might charge him $30 a week in board from 15-17 and give it back to him when he gets his P plates.

#25 lozoodle

Posted 23 January 2013 - 08:45 AM

Its for when they want to purchase a property. I wont be telling either of them about the account, rather gift them the money when they buy somewhere.

Edited by lozoodle, 23 January 2013 - 08:46 AM.

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