Sunday, February 24, 2008

Children's Gift Money?

Now I have no kids, but DH and I currently have many friends and family members having children. Now some are close friends and some are acquaintances. However because we have a bit of disposable income, DH lets me give more gifts than perhaps I need. But I like gift giving and it feels good.

I usually give someone something off their registry, however, for closer friends and family, I will often include money for college. I think this is becoming more typical. This is not a lot usually $25 on top of the gift, but it's just the thought that counts right?

But I was DISTURBED, on a message board when someone asked could they take their children's college money and pay off debt? It pissed me off, because their children's 529s were around $3k and mostly funded by gifts from family members and friends. This was not money saved by the parents.

I felt like I had been hit in the stomach that someone would actually ask about taking their child's money and using it for themselves. I understand that debt is bad. I also understand that no food, losing the house is a terrible situation.

However, I asked if this woman was already working a full-time job from her husband or he was working 2 jobs to support the family if she wanted to stay at home? And they have no cable, eating, excesse luxury items in the budget? Because if the situation was not extremely dire, where they were not eating and losing their house and working as hard as possible, I was flabbergasted that someone would ask about taking gift money from their children.

And worse yet, someone suggested taking it to lower the financial need of the children when they apply to college.

I'm sorry but NO! I am one of those givers and I would personally be horrified if I knew my friend/family had taken the money and spent it when I wrote on the check college fund. And they knowingly acknowledged that I had given money for their child's future college. But they decided to spend it and "pay" it back later by supporting the child in college.

How do I know you will support your child in college? What if you can't? What if something comes up? How do I know you'll pay them back?

And worse yet, isn't it like stealing? Stealing from your child, whom some generous person (grandparent, aunt/uncle, godparent) wanted to gift your CHILD not you with $$$?

Maybe because I don't have kids, I'm way off base. And I shouldn't be disturbed that parents would take the college money to pay bills. Please readers help me out here. If you tell me this is common practice, and completely acceptable, I'm reconsidering my gift giving strategy. I'll probably just buy nicer gifts the child will use or need. I won't give money for "college".

And even if you say it's unacceptable to take a child's gift money, I still might change my gift giving strategy after hearing what parents do.


KJS said...

Yikes! That sounds pretty classless to me.

However, one could argue that what someone does with a gift after you give it isn't really your business. It's a "manners" gray area for sure.

Seeking Financial Camelot said...

I think gift money ought to be treated differently than money a parent is investing for their children. I cashed in my kids 529 at one point but I had funded it myself. My kids have savings accounts where their gift money goes and I would never...ever touch it. That is their money. Not mine. It is off limits.

Living Almost Large said...

It was a 529 funded by gifts. Specifically money from grandparents, uncles, aunts, etc. People who said it was for college!

Not investing money from parents.

Michael said...

I don't like the idea of giving gifts with strings attached. If I wanted to save money for college for a family member I'd probably just create my own account and put money in it for them.

Tanya said...

Sounds sketchy. My parents always give bonds for that reason.

change is a good thing said...

Wow! As someone who doesn't have kids and gives money as gifts for such things as college funds, I would be upset too. I think you have every right to be disturbed by this. I only give $$ to my niece and nephew and I know my brother would never use their money for paying off his own debt, he doesn't need to, but if I thought he would, I would think twice about giving them money in the future. Interesting topic!

Living Almost Large said...

Maybe I will buy bonds. I am disturbed by this.

Anne said...

You know, I found this post looking for other stuff (researching for my blog about gifts for kids), but I absolutely love the idea of people giving money for college tuition, on top of a regular gift (gotta have those, not to disappoint the little ones!). And I agree with what you said, that should be absolutely the last, very very last, resort. Even food stamps come before taking your kid's college money, especially since it wasn't given by the parents to begin with!