What happens if my kids think they're poor when they're really not?
May 20, 2009 8:16 AM Subscribe
How will living well below our means affect the lives of our future children?
posted by davey_darling to Work & Money (56 answers total) 18 users marked this as a favorite
My partner and I have what I think is a good handle on our finances. I am 30, she is late 20's.
We paid $70,000 for our home and are accelerating payments so at the current rate we will be mortgage free in four years. We have no plans of moving any time soon (or ever, really)
We have two vehicles, one is newish and will be paid off in a year (and kept for at least five years after that), the other I just bought for $1200. We live close enough to work that I walk every day, year round.
We have a line of credit at $40,000 that we are using for home renovations and we pay $2000-$3000 per month towards the balance. We have $0 credit card debt.
We have started saving for retirement as a supplement to our already generous mandatory pension payments (combined we are paying over $1000 each to various retirement funds)
Within the next 5-10 years our combined incomes will exceed $200,000 before taxes. Our jobs are completely secure.
Most of our coworkers are living in homes at least twice the size of ours. They have shiny new cars, campers and boats. We don't have a big flatscreen on the wall or the latest iPhone. Our house isn't in the "nice" part of town. I understand that there is no way of knowing what kind of financial shape somebody is in based on appearances.
Now, I am perfectly content with that and it seems that my partner is as well (I often mockingly accuse her of wanting too many shoes, but she ignores me and buys what she wants anyway, which is fine and totally reasonable). We talk often and honestly about finances, our goals, and how to avoid lifestyle creep.
When we do have children, we want to (and will easily be able to) go to one income until the kids are school aged. My personal goal is to use the cashflow that we will eventually have to do fun things like traveling and experiencing the world, as well as helping to fund future post secondary education.
Now that I am starting to think about having kids, I realize that it won't be all about me and my wants/needs anymore.
Our town is small enough that where we live won't matter for schooling reasons. Our kids will go to school with the kids that live in the big houses and have fancy gadgets and "sweet cars". They will be friends with the children of our coworkers.
What will this be like for my kids? I can't help but think that they will feel "poor" when they see people with much more materially than they have, when in reality they will be financially in the same place as them (if not further ahead).
Now, I don't plan on sending my kids to school in secondhand sneakers and burlap sacks, but what happens when they go over to play, or their friends come over to our little home?
Am I overthinking this? Will it help to explain to my kids what I have outlined above? Will they even care? Will a relatively austere lifestyle affect their personal aspirations in any way?