Raiding the piggy bank: 1 in 3 parents dip into their kids’ savings
Parents are being forced to withdraw money from their children's future savings pool to keep afloat, according to new research by Finder.
According to Finder's Parenting Report 2023, which surveyed 1,033 Australian parents of children under 12, 1 in 3 (35%) – equivalent to over 892,000 parents – have used the money they set aside for their children on something else.
The report found 16% of Aussie parents put the money set aside for their kids towards general expenses, while 1 in 10 (11%) used their kids' future savings buffer for paying off debt.
The same proportion (11%) dipped into their kids' funds to buy themselves a home, while 9% used it to pay for a renovation.
Alison Banney, money expert at Finder, said the cost of living crisis was wreaking havoc on families across the country.
"As wages fail to keep pace with the increase in expenses, more parents are turning to their children's savings to make ends meet.
"This isn't an easy decision to make, but when faced with the reality of not being able to pay bills or put food on the table, the choice is clear."
Banney said for parents who are in a position to put money aside for their children, opening a kids savings account was a better option than letting it sit in a piggy bank.
"Not only does a kids savings account help the savings grow, but it gets your child into the habit of saving money regularly which is a great skill to have early on.
"Keeping money set aside somewhere it can earn interest means it can also be protected from the temptation of dipping into it for everyday expenses," Banney said.
Gen Z are more likely to have tapped into their kids' savings, with 41% admitting to taking from money set aside, compared to 28% of baby boomers.
The research shows almost 1 in 5 (18%) parents don't have any savings set aside for their kids.
| Have you used the money/investments you put aside for your kids to pay for any of the following? | |
|---|---|
| Yes, for general expenses | 16% |
| Yes, to pay off debt | 11% |
| Yes, to buy a home | 11% |
| Yes, to pay for a renovation | 9% |
| No | 47% |
| I don't have any savings/investments put aside for my kids | 18% |
| Source: Finder's Parenting Report 2023 of 1,033 parents of children 0–12, November 2022 |
Kickstart your kids savings by setting up a savings account for them now.