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Australian Parents Being Forced To Dip Into Children’s Savings Due To Rising Cost Of Living

Post by Sharat on December 14, 2018 · Under News · Comments Off on Australian Parents Being Forced To Dip Into Children’s Savings Due To Rising Cost Of Living 

A recent survey polling more than 1,000 parents has found that more than half of Australian parents polled have established a savings account to build a nest egg for their children. This indicates that parents are planning for their children’s financial future’s and understand how important it is to build a war chest to finance expenses such as education or perhaps help their children along with their home deposit.

Costs are rising

Some parents however are finding it tough to cope with the rising cost of living and as a result have been forced into dipping into their savings just to get by. Four in ten parents polled said they had dipped into their children’s savings fund at some point. Despite having good intentions, because wages are not keeping up with the cost of living, many parents in Australia are being forced to use money that they have put aside for their children.

Spending on necessities or unexpected expenses

Parents who dip into their children’s funds are using the money to spend on necessities such as groceries or mortgage and rent payments. Alternatively, another reason for cradle raiding is because parents are faced with large unexpected costs such as medical bills or car repairs. There are some who have used the money they put aside for their children to finance big-ticket items such as holidays, televisions, computers or cars.

Not being irresponsible

Generally, parents do not withdraw large amounts with nearly half of those polled saying they took $500 or less from their children’s fund. 20 per cent said they took up to $1,000. This means the problem is not one of parents being irresponsible, it is one of having to use savings to meet basic expenses. Parents who do take money tend to also pay it back though about 20 per cent admitted they haven’t done so. It is difficult to avoid dipping into savings when you can’t meet basic expenses.

Do your best

One way to avoid having to do it is by reducing discretionary spending though obviously that is not always going to be possible. Parents should think twice when it comes to paying for things such as holidays or renovations and consider what makes most sense for their family. If, however they find themselves using savings to pay for medical expenses or car repairs, it makes sense to do that instead of relying on credit.

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