Dipping into the kids’ savings to pay bills

I posed the question recently: Are you reaching into the kids' savings to pay bills? Now, I've scrounged up some reasonably reliable data -- a recent national survey by financial services giant ING showing:

34 percent have reduced the contributions they make to their children's savings

18 percent of parents who have savings set aside for their children have taken money from their children's savings to cover bills or pay off debt.

So, yeah, many of us are tapping those funds or pulling back on what we hoped to save for the kids.

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Check out a recent Minnesota Public Radio story on the struggle of saving for college in this economy (featuring several of our Public Insight sources) and a Gather conversation along those same lines.

We got some good responses from our Network on the issue. Here's a sampling of what people around Minnesota told us:

We have reduced our contributions to our own adult savings accounts but not to the kids' accounts. The kids have no way of making up the difference but we adults can always reduce our spending. --Cynthia Jacobson, Maple Plain

I've avoided even starting a family, partly because I lack the economic security to raise any potential children through to adulthood. -- Joe Schaedler, Minneapolis

I'm a married parent of 2 kids. After mortgage balance, our own college loans and car loans, our family net worth is well under zero. So "savings" is sort of a dubious term. As a family we keep a single pot, and hopefully we can provide a small nest egg of liquid cash for the kids in another 10 years when they're getting ready for college, but we'll likely still be paying our own college loans then. -- Paul Bramscher, Circle Pines

Advice-wise, the experts all say starting early on the kids' savings is the smartest move. Liz Wiczer of St. Paul told us her son just turned one:

Any money he receives as a gift goes directly into his savings account, held in his name by us. Every month we are able to save money (usually 10 out of 12 months), we put 10% of the total saved amount into his account. We haven't designated a particular purpose for the money yet, but it will most likely go towards college expenses, setting up a home of his own, a down payment on a first house, a wedding, or other similar one-time large expense.

I'm still interested in hearing from people on the issue. If you have a story to tell about managing -- or needing -- your kids' savings tell it here.

And check out an earlier post asking if college is still worth the money?