Author Topic: Stealing Money from Children  (Read 6751 times)

CentimentalFreedom

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Stealing Money from Children
« on: April 03, 2014, 01:31:39 PM »
So I overheard someone talking today about their brand new pool that they paid for in CASH by withdrawing from their children's REGISTERED EDUCATIONAL SAVINGS PROGRAM....

Speechless.

« Last Edit: April 03, 2014, 01:57:52 PM by CentimentalFreedom »

CommonCents

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Re: Stealing Money from Children
« Reply #1 on: April 03, 2014, 01:40:57 PM »
A friend earned money as a child actor.  Her parents wiped out that account when she was older.  They were terrible with money (even filing bankruptcy).  As she put it, she couldn't get too mad because they needed to eat.

Zamboni

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Re: Stealing Money from Children
« Reply #2 on: April 03, 2014, 03:30:19 PM »
Since that often results in a 10% penalty, they must not be very good at math.

CentimentalFreedom

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Re: Stealing Money from Children
« Reply #3 on: April 04, 2014, 05:29:22 AM »
Since that often results in a 10% penalty, they must not be very good at math.

It results in the government taking back their grants.. it's actually 20%

They didn't seem to care.

RetiredAt63

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Re: Stealing Money from Children
« Reply #4 on: April 04, 2014, 05:47:18 AM »
We need to sic Gail on them.  I so miss Till Debt Do Us Part. They are MMs (Money Morons).

I hope their kids can get scholarships, they are going to need them.

soccerluvof4

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Re: Stealing Money from Children
« Reply #5 on: April 04, 2014, 06:54:25 AM »
Nothing surprises me now a days. Though still ridiculous!

2527

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Re: Stealing Money from Children
« Reply #6 on: April 04, 2014, 07:07:57 AM »
A friend of mine was saving money for college while he was in the Army.  His mother drank it.

Vorpal

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Re: Stealing Money from Children
« Reply #7 on: April 04, 2014, 07:11:52 AM »
A friend of mine was saving money for college while he was in the Army.  His mother drank it.

That breaks my heart :(

CentimentalFreedom

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Re: Stealing Money from Children
« Reply #8 on: April 04, 2014, 08:19:49 AM »
A friend of mine was saving money for college while he was in the Army.  His mother drank it.

I'm sorry to hear that.

greaper007

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Re: Stealing Money from Children
« Reply #9 on: April 04, 2014, 08:33:06 AM »
A friend of mine was saving money for college while he was in the Army.  His mother drank it.

Wow, I could understand if you were talking about cocaine, but booze is cheap.   A box of cheap wine is like $15 and I can't imagine anyone can do more than 2 boxes in a day without passing out.    What an asshat.

greaper007

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Re: Stealing Money from Children
« Reply #10 on: April 04, 2014, 08:36:28 AM »
So I overheard someone talking today about their brand new pool that they paid for in CASH by withdrawing from their children's REGISTERED EDUCATIONAL SAVINGS PROGRAM....

Speechless.

People are goofy.   We have friends that took money out of their retirement account so they could put in hardwood floors.    I really had to bite my lip when he said "I need to floors now, I'm not going to retire for years."

It blows my mind.  I ran as far away from math and science as I could in college.   Still, my non-mathematical brain understands the concept of compound interest.    I have the same reaction to how a lot of people drive their cars in a way that suggests they don't have an understanding about basic Newtonian physics.

Guses

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Re: Stealing Money from Children
« Reply #11 on: April 04, 2014, 10:40:59 AM »
So I overheard someone talking today about their brand new pool that they paid for in CASH by withdrawing from their children's REGISTERED EDUCATIONAL SAVINGS PROGRAM....

Speechless.

How is that stealing exactly?

Not to detract the dissing and all, but isn't the contribution from the parent allowed to be returned to the contributor tax free?

I see it as a clever way to contribute to your child's education. Contribute to the plan, get the government match, withdraw your contribution after vesting period, child can use the government match for school expenses....

Many are quick to judge in my opinion...

I do agree that using the proceeds to buy a pool is probably not the best use for the cash though.

« Last Edit: April 04, 2014, 10:43:32 AM by Guses »

warfreak2

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Re: Stealing Money from Children
« Reply #12 on: April 04, 2014, 10:46:59 AM »
get the government match
That's why. The government paid that money for the benefit of the children, and the parents are spending it (and the rest) on themselves.

Guses

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Re: Stealing Money from Children
« Reply #13 on: April 04, 2014, 10:57:37 AM »
Seeing as you are from the UK, you probably don't know how the RESP system works. Let me explain:

Parents are entitled to withdraw their contribution (as it's their money afterall). The match from the government (and ensuing compounding) can only be spent by the beneficiary (student).

If the beneficiary does not go to school, the govermnent match and interests get sent back to the government.

« Last Edit: April 04, 2014, 02:43:39 PM by Guses »

TomTX

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Re: Stealing Money from Children
« Reply #14 on: April 04, 2014, 01:52:15 PM »
My wife's mother stole every cent that my wife had saved up for college (from gifts and from working in High School)

CentimentalFreedom

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Re: Stealing Money from Children
« Reply #15 on: April 05, 2014, 09:20:45 AM »
Not to detract the dissing and all, but isn't the contribution from the parent allowed to be returned to the contributor tax free?

I see it as a clever way to contribute to your child's education. Contribute to the plan, get the government match, withdraw your contribution after vesting period, child can use the government match for school expenses....


That would be clever if they kept the money in there until you absolutely HAVE TO withdraw. The grant money is returned to the government upon withdrawal for non-educational purposes AND they stop grant payments for a period of time. You end up losing MORE VALUE than it's worth.

MooseOutFront

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Re: Stealing Money from Children
« Reply #16 on: April 05, 2014, 09:25:47 AM »
I invested in taxable this year instead of my kid's ESA.

 

Wow, a phone plan for fifteen bucks!