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?

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?
posted by davey_darling to Work & Money (55 answers total) 17 users marked this as a favorite
Am I overthinking this?


Will it help to explain to my kids what I have outlined above?

I think that they'll absorb most of it by osmosis.

Will they even care?

At some points in their life they probably will. At others they'll see it as a source of pride. When they are teenagers they'll throw it in your face that YOU NEVER LOVED THEM!!! But then again, they'd do that no matter what your level of consumption is.

Will a relatively austere lifestyle affect their personal aspirations in any way?

Huh? I grew up pretty damned poor, for real, and if anything it made me more determined to work hard and set myself up financially without having to rely on my parents. For your family, you are not poor, you're just saving up for the things that matter to you - you don't care about nice televisions or nice houses or nice cars, so you don't buy them.
posted by muddgirl at 8:20 AM on May 20, 2009

I think it will give them a greater appreciation for the value of money, and that is a GREAT life lesson. Congrats to you and your partner on your success, and sound finances. Passing it on to your kids would be wonderful, as they will learn early on that money != happiness.
posted by Grither at 8:21 AM on May 20, 2009 [1 favorite]

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).

For a kid, there is no "in reality". Reality is the here-and-now, not some numbers on daddy's computer.
posted by smackfu at 8:24 AM on May 20, 2009 [2 favorites]

They will grow up to not be a typical consumer. I think that is a good thing. I know it sounds like a socialist catchphrase but materialism doesn't really make your life better. It's just more stuff to haul around when you move. I think if you take them on good vacations it will more than offset any material losses among their peers.
posted by JJ86 at 8:24 AM on May 20, 2009 [1 favorite]

You're overthinking it. Children are not entirely products of peer pressure, cultural pressure, or "keeping up with the Joneses". Almost always, children reflect the values of their parents, regardless of the parents income, lifestyle, fame, or the size of house.

Children are incredibly adaptable and versatile creatures. They can endure amazing hardships and still come out okay. The simplest rules of parenting remain the same, no matter your lifestyle: Love your children unconditionally, let them know you love them, help them learn about the amazing world around them, challenge them to be thinking, loving, caring individuals, and they'll grow up just fine.

"Before you try to keep up with the Joneses, be sure they're not trying to keep up with you." - Erma Bombeck.
posted by mrbarrett.com at 8:25 AM on May 20, 2009 [5 favorites]

No, it won't matter. Besides, you'll have years and years to figure this out anyway. Why worry about it now? By the time it matters your kids should be able to clearly articulate how they feel about the situation.
posted by delmoi at 8:25 AM on May 20, 2009

It will mean you will be able to put them through college without them being saddled with crushing student loans, which should make them very thankful once they get out and see the debt their friends have.
posted by fings at 8:25 AM on May 20, 2009 [6 favorites]

I am in the good financial shape I'm in right now, compared to my peers, from learning the lessons taught (directly and indirectly) to me by my parents who raised me in much the manner you describe.

Plus, no matter how much you give them someone else will always have the bigger house, better car, newer iPod. Have you ever seen those horrible "My Sweet 16" shows? Those kids have it all, and want even more.
posted by JoanArkham at 8:27 AM on May 20, 2009 [1 favorite]

They might feel poorer now, but when they grow up, they'll admire you for your thriftyness and realize that saving money is wiser than spending it on toys.
posted by anniecat at 8:28 AM on May 20, 2009

Hello. This is you from the future. You did great. Really really great. You found out it didn't really matter to your kids how rich-appearing their friends seemed to be. They were able to jump around socio-economic groups and pick friends for other reasons. They were well adjusted, in no small-part because their parents did the heavy financial lifting early and weren't stressed out about day-to-day life and thus were able to pay attention to their kids. Oh, and when you accelerated the payments on your house and paid it off? You kept on saving and poured that money into a college fund so you're not stressed at age 50 about how you're going to pay for college. Yes, your kids realize that hey, you are secure financially. But they realize that gives them the safety to volunteer in hospitals and Teach For America and Habitatat. And since they lived and breathed financial discipline, they just left the nest with little debt to weigh them down. Yep. You did good. Oh, and now you drink really good beer.
posted by lpsguy at 8:28 AM on May 20, 2009 [32 favorites]

You will have to teach your children not to look at appearances. I grew up in a trailer in central Mississippi, but both of my parents worked and together they brought home about $100,000. We were insanely wealthy for our neighborhood. However, I felt jealous of the neighbor's kids, who had brand-name clothes and junk food in their house. It turns out, their single mother bought those things on credit so that her children wouldn't feel poor, while we got "bland" home-cooked meals and Wal-Mart clothes because our parents wanted to live within their means. And I now feel bad for giving my parents shit about doing the right thing.

So, yeah, your kids are going to hate you because they don't have a big shiny house and all the expensive gadgets. But that's fine. They will appreciate them more when they can buy those things for themselves the right way - by saving up for them.
posted by domo at 8:30 AM on May 20, 2009 [3 favorites]

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).

That's an interesting sentence. I understand what you mean, but ask yourself: Does it matter if your family is or is not in the same place financially as their friends?

I grew up with a family that did not have the latest toys, and yet had money to spend for vacations, college, and other things we thought were important, and I think it worked out well for me. I learned a few things from it:

- Living within your means, saving, and planning are all important. It's important in part because it gives you options.

- It really doesn't matter how much the Jones' have, in terms of cash or belongings. It's not a competition.

- The worth of a person does not equal the money they have in the bank (or belongings).

It's that last bullet point that I recommend you think on. I bet you agree with it. Compare it with your sentence I quoted, though. If you agree that a person's worth is not the same as their bank statement, then teach your children that. It will not matter if they are "poor" or not, because it's not about that.
posted by Houstonian at 8:33 AM on May 20, 2009

I think your only concern would be that, if you are living in a "bad" part of town, that your kids may end up in crappy schools as a result.
Otherwise, congrats, you'll teach them the value of living within their means. My folks did the same, which is why I'm not eyeball deep in debt for $0 furniture and electronics like most of the folks I know.
posted by Kellydamnit at 8:34 AM on May 20, 2009

ugh, that should be "for $0 down furniture and electronics"
posted by Kellydamnit at 8:35 AM on May 20, 2009

My Mom and Dad did this while they raised me, and I appreciated them for it, and for teaching me to balance a household budget. Just a data point for you.
posted by LN at 8:35 AM on May 20, 2009

Yes, you're overthinking this.

I grew up in a similar situation to the one you describe, although there were some unforeseen financial bumps in the road. I'm a happier person for it. We had a smallish house, safe but not fancy cars, and generally lived frugally. My parents spent money on private schools (if anyone wants to know why all-girls Catholic schools are the best thing ever, please ask me--it has nothing to do with naked pillow fights) and a few really great trips. I didn't own my own car at 16, but I did go to London and Paris. I think I got the better deal.

Your kids won't need to know that you "really could afford a BMW" or whatever else. They just don't. If they have friends with parents who drive fancy cars and live in huge houses, chances are many of those parents will be heavily in debt or sacrificing things like travel and education in order to afford the daily luxuries. When your (future) kids get to an age (teens?) when it is appropriate to start talking about specific details of your family's financial life, you can explain the advantages of living below your means and why you made the choices you did. But while you are raising your kids, you don't "owe" them an explanation as to why you're living sensibly.

Your kids won't think you're poor as long as you say "We're not choosing to buy that now" instead of "We can't afford that" when they ask for something. They may think you're mean horrible parents because you won't give them everything they want, but they won't think you're poor. And kids shouldn't get everything they want, anyway--that doesn't end well at all.

The only thing I would recommend is to be aware but not apologetic if you end up having kids and sending them to schools/social situations where the other kids have higher expectations of luxury. My brother had a hard time in high school because he sometimes thought my parents "owed" him the things his friends got from their parents. He just couldn't understand why his friends got cars (or whatever) and he didn't. I don't wish my parents had given in and bought him a car or sent him skiing in the Alps, but I do wish they'd been more aware of how he was feeling. They didn't make the connection between what he was seeing in school and how his expectations were developing, so they couldn't effectively talk to him about it.

I know the value of money, but I'm not cheap when it comes to other people because I'm not scared of spending money. I think this comes from a "live below your means" lifestyle, which I learned from my parents.
posted by Meg_Murry at 8:36 AM on May 20, 2009 [3 favorites]

It doesn't matter what your reasons are, the kid is still going to be pissed when he gets a knock-off Cabbage Patch Kid for Christmas, and he will remember it for years. (True story!)
posted by smackfu at 8:38 AM on May 20, 2009 [3 favorites]

Another data point. My brother and I grew up more or less this way -- though a bit more towards the
sending my kids to school in secondhand sneakers and burlap sacks
end of the spectrum, and we appreciate all the advantages that every one else is posting about.
We graduated from expensive colleges with no debt. We know we don't really have to worry about our parents' financial security in retirement. We were given a hand with the down payments on our first houses. We're both financially sensible. Etc.

That's not to say it wasn't occasionally hard as a child. But, um, don't insist on making all your kids' clothes, and you'll probably save them some teasing.
posted by kestrel251 at 8:40 AM on May 20, 2009 [1 favorite]

We did this, and continue to do so even as they enter college. They both have the funds to go to the college of their choice but we live in a crowded house and drive used cars. They get whatever they need for school but some luxuries are just not happening. One has handled this pretty well the other wishes she had a rich family. I trust that she will someday understand what we did and why, too.

To be honest, I am the one who's had the most difficulty with this. I understand the envy you're feeling for all those people who are living better than you are. But my house is paid for (25 years, 5 ahead of schedule), my kids have college fully funded and I should be able to retire and live acceptably well. It's given me a better understanding of what my parents went through with me. Still, sometimes...
posted by tommasz at 8:40 AM on May 20, 2009

I grew up in a home that valued good quality healthy food, the arts, learning, and experiencing the world in ways that interested me above status, wealth, and appearance. We were never wealthy by American standards, and in fact somewhat poor when I was a small child - but I literally had no idea. I never thought of myself as poor. In the grand scheme of things, of course, I was incredibly rich, in that I had all the physical needs, care, and emotional attention that I needed.

I had one dark year when I was 12 or 13 - I was especially miserable in school, clinically depressed, very different from the other kids my age, and very lonely. During that year I remember feeling somewhat resentful towards friends of mine who had generous allowances or whose families took exotic vacations. Of course those feelings came from my own insecurity - I had some notion that if I had more money, I could buy my way towards fitting in. I think that year was really the only time that I felt some sort of lack in my life, and I'm not sure that could possibly have been avoided - being that age is incredibly difficult.

Since then I've been more and more grateful each year that I did not grow up confused about whether or not money could buy happiness. It's not that I was always denied everything I wanted, and I learned The Hard Way, or that my life was the school of hard knocks or anything like that - there was enough money to let me follow my interests to a reasonable degree. But neither did my parents try to give me things to solve my problems. It wouldn't have worked anyway, so I'm glad they didn't try.

My younger sister had a somewhat different experience. She went to a private school - a decision she made herself because she thought it would be best for her, and which my parents tried heroically to support, through various clever means despite it being outside of their price range - and she was surrounded by VERY rich children. Initially she had a lot of trouble with the fact that almost everybody she knew could afford designer clothing and accessories above and beyond any sort of necessity, frequent plane trips and vacations to exotic locations, and so on. Many of her friends bought her expensive things and took her on expensive trips and she felt extremely awkward about her lack of ability to reciprocate. This caused a number of fairly serious problems I won't go in to, but suffice it to say it was extremely difficult for her. In the midst of all this, I recall overhearing her tell a friend of hers (as a young teenager) that our father was "AWOL again", or something like that - basically implying that he was an absent father who had ditched the family. This couldn't possibly be farther from the truth - our father has been involved and dedicated to our lives from the very beginning. Of course, my sister knew that and wasn't trying to hurt my father in any way - she was just trying to fit in and be understood by the people she was friends with, many of whom came from unhappy or broken homes. For me, as an older teenager listening in, this was really eye-opening. The pressure to be accepted at that age is so strong...

My sister has since really come in to her own. She's a smart, healthy young adult now who has an evolving, and much more balanced, relationship towards money. I think she still feels the pull toward lifestyles where it's possible to buy what you want and fly where ever you want to go, but I think she also realizes how secondary those opportunities are to happiness.

So. I feel pretty strongly that the best thing you can give your children is, as you suggest, opportunity, affection, TIME. Not stuff. I also don't think it would be productive to define yourselves as People Who Don't Spoil Their Children and hold rigidly to that - I think it's pretty much impossible to spoil children who are given the full benefit of their parents' love, and sometimes kids want stuff that won't make them happy, and it's best to let them learn that themselves. But I think what you're generally proposing is a great idea.
posted by Cygnet at 8:44 AM on May 20, 2009

Oh, and PS, regarding education:

My parents started saving for my college education when I was born; same with my sister. Both of us were given 4 years of college with NO DEBT. My sister is in college, now I'm on my own. I don't have much money, but having no debt is... sooo awesome.
posted by Cygnet at 8:46 AM on May 20, 2009 [2 favorites]

Make sure you teach them about budgeting and financial responsibility. My mother was frugal, and I was resentful about it when I was a kid. She would tell me that vacations, camp, education etc were more imiportant than designer jeans and toys and I suppose I understood that. But I never received any education on what the ramifications of living above your means were, and when I went to college and got credit cards I went crazy with them, because at 18 it felt like for the first time in my life I could have whatever I wanted.
posted by rabbitrabbit at 8:57 AM on May 20, 2009 [1 favorite]

I was raised exactly like this - although there are a few things I would've done differently, it was a circumstance completely different than how most of my friends were brought up, and something I wouldn't change for the world.

Some interesting things I experienced being raised this way:

- I got made fun of in school for not having all Abercrombie clothes, for not driving a nicer (leased) car, for not living in the "right" subdevelopment.

- People assumed I was poor, but more than that, they assumed I was white trash. (My father's NASCAR mania didn't help this image, frankly.)

- I was always really frustrated with my parents because I believed, when I was a kid/teen, that if we showed our money more ostentatiously, I'd be more popular/better liked.

That being said, when I got to college and then started living on my own, living beneath my means was never an issue; it felt like the natural thing to do. Also, having credit card debt seems so foreign and icky to me that, barring some personal disaster that wiped out my savings, I never see myself carrying more than a small balance I pay off monthly.

What's most important, though - and what I think my parents neglected to do while raising me - is really stressing the value of a dollar. Ironically, living so far below our means really never taught me about money because we always had money for the things we wanted. That was the biggest shock for me, being on my own: that living below your means doesn't automatically ensure a cache of gold hidden, Scrooge McDuck-like, in a back room somewhere.
posted by harperpitt at 8:59 AM on May 20, 2009 [1 favorite]

You're overthinking it.

NOT-CLASSIST everyone is equal in dignity etc... about the only potentially negative thing I can think of is that if you are stereotypical professional-class people and your neighborhood is strongly working-class, then attitudes and norms that might well be prevalent among your kids' friends in the neighborhood, and that your kids might absorb osmotically, might differ somewhat from the set of attitudes and norms that you'd like them to absorb osmotically. Likewise, if your and your kids behavior, attitudes, and norms are sufficiently dissimilar from the locally prevalent ones, local kids might give yours shit for it.
posted by ROU_Xenophobe at 9:05 AM on May 20, 2009

My children are living in a household of underconsumers. We live within our means. Our house is paid for, our cars are paid for, and we have no debts. What does this mean for our kids?

For one thing, ours is a single income home. Our household income is half the median for the area. Our home value is a third of the median for the area. Our cars work, but tend to loose their shiny long before they are replaced. The yard is not professionally landscaped. Some of our furniture is older than I am.

The children are happy and comfortable. They have parents who are available to them, instead of working at high power jobs 70 hours a week. If there is an unfavorable comparison of what we provide for them vs. the children of the wealthier schoolmates, I have not heard it. We have provided an atmosphere of low financial stress, even when I was out of work for several months, due to savings and no debt.

When our 16 year old had to write a school essay about overcoming adversity, he had a problem. "Our house lacks strife," he said.

So, here is my vote for less stuff, smaller and older homes, lower debt, savings, and time spent at home with the children. They don't seem to suffer for it.
posted by Midnight Skulker at 9:08 AM on May 20, 2009 [1 favorite]

Be frank with your kids about the money. At some point, when they're are old enough to understand the math, sit them down at the table, do the numbers with them, and explain exactly where the money is going, what you're doing with the savings, and why that money can't be touched for the new iPod/shopping at Abercrombie/new cars/vacations to Jackson Hole/eating out every night. Hopefully, at that point, the values your'e teaching them generally will kick in and make them understand, even if they won't admit it to you. And from personal experience, it's definitely more persuasive than yelling "No, you can't!"

My parents posted the value of their 401K's on the refrigerator and updated it every morning by calling Merrill Lynch while us kids were eating breakfast. We always got McFish's at McDonalds because that's what my mother had coupons for, and I never questioned why we didn't go on big shopping sprees at the start of every school year.
posted by joyceanmachine at 9:08 AM on May 20, 2009

You have no idea how great the gift of stress free life regarding finances you are giving your future children. Really, just teach them about finance, be aware of peer pressure and address it, and know that your children will not be saddled with debt or certain types of fear because of your conservative approach. Its good not to be beholden to a financial institution or fear.
posted by jadepearl at 9:23 AM on May 20, 2009

My parents were fairly financially responsible, and raised me and my brother similarly. We were lucky enough to have parents and grandparents who saved for our college years. But we turned out differently. I'm thrifty and enjoy living on minimal goods, and ended up graduating from a state college with money left over. My brother pays attention to fashion and appearances, and lived a life of more luxuries. With that and his road to medical school, he doesn't have any more funds saved up. He's not buying designer clothes and top shelf drinks every night, but we have different priorities. In the end, I've turned to him to help me be fashionable for work, as I would be content to live in shorts and t-shirts for most of my life if it were not for my line of work.

In short: there are a lot of things that go into the world views of your offspring. Being financially sound is fantastic, and as long as you're not yelling at them when they use too much toothpaste or toilet paper, they should be fine. They might or might not follow your exact footsteps, but you'll be setting a path for them.
posted by filthy light thief at 9:30 AM on May 20, 2009

Wow. You are awesome.

But wait, there's more. I too grew up without a lot of money (artist parents, yo...), and though that got better as I got older and my parents made more money at their day jobs, I never had all the same "stuff" as my peers. And for the most part, I didn't really give a damn, at least until I stopped having all guy friends and made some female friends who pressured me into wearing the new hot shit from the Limited (remember that crap?) instead of the camo army jacket and fedora I favored (dude, I was a weirdo hipster at the age of 10...don't get me started on the 1940s dresses and hat collection I had, I just wish I still had them all now).

Trust me -- your kids WILL appreciate what you're doing. It'll take a while, but it'll happen. Watch Pretty In Pink a few times to sink the message in.

(Then again, don't, unless you want your kids to dress the way I did when I was 10).
posted by bitter-girl.com at 9:35 AM on May 20, 2009 [2 favorites]

I grew up being actually poor in a very small semi-slum area of an affluent suburb.

Allow your kids to spend enough money to wear clothing that is at least nearly as nice as most of their peers. If your kids wear demonstrably cheaper clothing than their peers, they will be at least somewhat ostracized.

Once they get a bit older, they will probably not bring their friends around as much as they otherwise might. This might lead to more time spent away from the house at the mall or at friend's houses.

If your children begin to understand that you could easily afford an Xbox, or whatever the must-have gizmo of the day is, but you're not getting one, this will inevitably cause serious resentment. Again, and again, and again.

Almost everyone I know who has children has moderated their views about how they would raise children once they actually have them. Almost everyone of them has a significantly different lifestyle than when they were childless. So be prepared to change a little, but none of the problems your children would face are terrible, and it'll build character, they'll thank you when they're older, blah, blah.
posted by bluejayk at 9:36 AM on May 20, 2009

It doesn't matter what your reasons are, the kid is still going to be pissed when he gets a knock-off Cabbage Patch Kid for Christmas, and he will remember it for years. (True story!)

Yup! Happened to me, too--only it was a knock-off American girl doll. I came to love her, but boy, were my parents not fooling anyone.

Other than the above, I wasn't really aware that we grew up poor until I was in my teens. We were well below the poverty line and didn't go on expensive vacations, etc. For whatever reason, my sister was more acutely aware of the difference. Once I hit my teens, I started wanting things that cost money--some internet friends of mine went to DragonCon in middle school, and I couldn't go, and that hurt, and I dearly, dearly wanted the Beatles anthology complete video set, but since it cost well over a hundred dollars, that was a no-go.

These days, both my sister and I seem to manage our money better than our peers. However, we both have significant guilt issues with making purchases we can afford. Despite the fact that my family's poverty was never our fault (and was never made to sound like it was), it's difficult to not feel somewhat accountable when you're denied things over and over again. I don't really know how to avoid this. Kids want things; if you want to live fiscally responsibly, you have to deny them stuff, sometimes.
posted by PhoBWanKenobi at 9:37 AM on May 20, 2009

You are NOT overthinking this.

It all depends on your personality and the kid's personality and how they're raised.

If you're an asshole about this, refusing to splurge and giving no reasons, then yeah, they'll hate you for a bit.

If a child is particularly sensitive and there happens to be a particularly intense bully around, it might affect that a lot.

If you're a generally kind and loving parent and you explain the why you're doing what you doing and perhaps occasionally splurge, then it shouldn't be a problem in the long run, though there might be a few explosions.

As a lesson, give them some seemingly large sum of money, say $100 when they're 10 or so, telling them they can spend it anyway they want (within reason or so). This accomplished two things, 1) gives you an idea of their personal spending habits, allowing you to adjust your teaching of thrift to them 2) Teaches them that money is finite and it's not how much you can spend, it's how much you hold on to that gives you power.

Also, give them allowance, with the amount based on covering their school lunches and some spending money. Make them responsible for their own lunch. They can either buy stuff and brown bag it, saving money, or spend it on school lunches. It makes'em responsible for something, while teaching the value of money.
posted by Brandon Blatcher at 9:40 AM on May 20, 2009 [3 favorites]

Hi. My parents are you. I just turned 24. I lived in the same house from the day I was born until the day I went to college. They were able to help pay my way through state university because we never moved or had a ton of fancy stuff, so I graduated with zero student loan debt. Our house felt a little small because of the mess of 5 people that accumulates with two parents working almost full time, but you won't have that problem if one of you stays home, and the homemaker can earn back much of the value of the salary they "lose" in the time they devote to the family.

With the way the job market is for people just entering the work force, one of the greatest gifts you could give your kids is helping them pay for school. It will give them the flexibility to follow good opportunities, travel, go to grad school, start their own business, or whatever. I never went back to living at home because of that, and now I work and support myself. My parents get to keep saving for retirement, and they still do the occasional nice thing like a cruise to Alaska for their anniversary.
posted by slow graffiti at 9:48 AM on May 20, 2009

We graduated from expensive colleges with no debt. We know we don't really have to worry about our parents' financial security in retirement. We were given a hand with the down payments on our first houses. We're both financially sensible. Etc. That's not to say it wasn't occasionally hard as a child. But, um, don't insist on making all your kids' clothes, and you'll probably save them some teasing.

My Mom made my clothes for a while and my Dad worked pretty much all the time. When I was a kid, even though we lived in a house and me and my sister each had our own rooms, I thought we were poor because my Mom was always flipping out on me for using too much butter or not letting me do things because of how much they cost. I thought my Dad worked all the time because we were broke. As it turns out, we were doing okay which shot up into "pretty darned good" at the point at which my Dad moved up the ladder at work. When my parents split soon afterward, my Mom became a total penny-pincher [she and my father split but did not get an official divorce for a decade so they had an informal arrangement which left my Mom totally insecure feeling about cash] and my Dad, it turns out, was pretty well off.

My folks [and my grandparents] paid for my college so I got out of college with no loans and a decent [if possibly uptight] sense of financial responsibility. I now work all the time (hi Dad!) because I'm always convinced that however much money I have, it's not enough. This is a little crazy and I don't have a very good sense of financial planning that isn't "save as much as possible, forever" I'm a little uncomfortable with my lack of debt because it seems somehow that I'm a spoiled rich kid and yet at the same time I remember how deprived I always felt, so it's hard to rationalize those two feelings. So my words of advice

- make sure your kids understand that your way of life is a choice, and their friends' way of life was at some point a choice, and how debt can remove some choices, etc. No need to be smarmy about it, but it's worth explaining the financial decisions you and your wife make as intentional, not a result of not having money, etc.
- when your kids are old enough, let them have some financial leeway. I got a clothing allowance in high school and if I wanted to buy one fancy pair of jeans instead of three more modest pairs, that was an option available to me. Your kids may not grow up to be like you and make sure they don't feel that your lifestyle is the only "right" way to live
- help them save early and counsel them when they are making choices that may be hard to take back [getting early credit cards, for example] but don't keep them from early experimentation.
- be honest with your kids about where you fit on the larger financial food chain. I always thought we were poor and always remember with gratitude when someone else's mom bought me gum in the supermarket aisle because my Mom would always pooh-pooh impulse purchases. I'm sure they had the same amount of discretionary income as our family and yet they weren't living with our perpetual asceticism that always made me feel poor even though we had enough food, clothing, shelter, medical care, etc.

I still have no idea what our financial situation was when I was a kid, and even now I don't think my Dad has as much money as it would seem like, but he spends it more and shares it more readily (though not philanthropically, in contrast to my Mom). My Mom is always nickle and diming me to death about everything and I find it exhausting and try hard not to do the same thing to my friends but it's almost an instinct with me.
posted by jessamyn at 9:54 AM on May 20, 2009 [10 favorites]

I agree. save the money for expenses that will matter: a camp experience like outward bound, college, a family vacation. My parents didn't have any savings until I was in middle or high school, and in a way I'm glad. We ate at home a lot, went camping, hung out with other families that didn't have a lot of money, shopped at thrift stores. There were definitely times I wanted toys I couldn't have, but they also gave me allowance, and of course there were birthdays and Christmas. And lord, if there are grandparents in the picture, they will probably want for nothing anyway. Just don't be toooo stingy with money either. I have wealthy friends whose parents felt so guilty about money, then they would like make their kids like wash the kitchen floor before they gave them 10 bucks for the movies. Just make it clear money isn't everything, don't spoil them rotten, but have fun enjoying it with them sometimes.
posted by Rocket26 at 10:07 AM on May 20, 2009

Jessamyn makes a good point. I learned my money management skills partly from seeing how my parents lived, but also partly by making some of my own money decisions and living with the consequences.

BTW my parents live as you do. Sure, I felt pangs of jealousy growing up (still do occasionally), but I learned to evaluate my wealth in other ways, and my life is the richer for it.
posted by Chris4d at 10:19 AM on May 20, 2009

We do what you're doing, but we also know when to spend money -- and making good choices every day means we can splurge when we want to.

For example, the kids get a good gift at Christmas plus smaller gifts. So they didn't get a Wii (though their cousins did)? Waa-waa: one got beautiful handmade clothes for her American Girl doll. Then they told us they're saving up for one -- and we couldn't be prouder!

Another example: we used direct deposit to a separate back account for the car loan. This week we realized that the "rounding up" money that's been going in is now enought to cover the loan's balance. Done!

My kids have even mentioned that their friends have a lot of the must-have stuff (Wii, all the cable channels, etc.), but they never use them. When they noticed that for themselves, then I realized we'd planted seeds that were already sprouting. :7) Yeah, they complain sometimes, but they'll do that anyway.

Last winter I was talking to my mom, and she said that the reason to have money is to use it (or something thereabouts) -- meaning that sitting on a hoard like Smaug doesn't do you any good, but effectively using that money for a good reason (education, house, etc.) can be good.
posted by wenestvedt at 10:49 AM on May 20, 2009

Kids understand this. My kids did anyway. There are lots of resources for you when you get to that point.
posted by raisingsand at 10:49 AM on May 20, 2009

My grandfather was the president of a coal mining company. His next door neighbor and best friend was a shovel operator in one of the mines. My grandfather shunned anything he believed to be "ostentatious display." He drove cars until they fell apart. He wore suits until they had holes in them. He mowed his own lawn with an ancient push mower. His house was one of the most modest on the street with three small bedrooms for a family of five.

His neighbor, the shovel operator, had a bigger house, a fancy new car, and all the bells and whistles like big tv's etc. When his kids got sick, he came to my grandfather cap in hand. When his kids wanted to go to college, they had to take huge loans. Though they always appeared to have more they were always in debt. My grandfather on the other hand never had needs. He paid for his house, his new cars, his kids education in cash.
posted by Pollomacho at 11:01 AM on May 20, 2009

We graduated from expensive colleges with no debt.

Is this really a practical goal nowadays? Per-child, this could easily require $100k savings in today's dollars. Two kids, and you need to choose between retirement or putting your kids through school.
posted by smackfu at 11:06 AM on May 20, 2009

Is this really a practical goal nowadays? Per-child, this could easily require $100k savings in today's dollars. Two kids, and you need to choose between retirement or putting your kids through school.

In some cases, it's very practical. I went to a college that met 100% of my family's demonstrated financial need. Of course, the amount of money they give you is frequently less than you hope for, but the sacrifices my (artist, non-rich) parents made were reasonable and small, and the school took care of the rest. As of the *year I graduated*, the school now pays full tuition, no-questions-asked, for families with an annual income below a certain threshold. I would have been a free ride if I'd been a few years younger! You can imagine how this feels to my parents, but even without that luxury, it really did work out (given their careful planning), and they didn't have to give up their retirement savings.
posted by Cygnet at 11:17 AM on May 20, 2009

It seems to me that the most important point is for *you* to be at peace with your financial situation, and to convey that sense of peace to your children. That way you'll avoid the stress and tenseness that Jessamyn described so well, as well as be role models for your kids as to how to follow your own course, stick with it, and be happy doing so.
posted by Salamandrous at 11:20 AM on May 20, 2009 [1 favorite]

I always thought we were poor when I was growing up because of my mom's thriftiness. As the years passed she seemed to get more and more obsessive about saving money, at the same time as I became aware that we were actually really well-off. For example, she'd complain that I used too much toilet paper (even though she always bought the cheapest, thinnest kind in bulk) and she often got upset about me filling my cup with too much ice from the fridge's ice maker. As you might imagine it was always cold in the house because we were rarely allowed to run the heating.

I also felt guilty every time I bought something like a new computer game or whatever because I'd walk into the house and my mom would always ask how much it cost and express the usual displeasure with me spending any money on anything.

When I started living on my own, I went through this impulse buying period where I saw something I wanted, had the automatic reaction "I can't buy it", but then had this wonderful realization that I could, in fact, buy it, because I had the money. I'm still horrible with money in terms of buying stuff I don't need and eating out all the time, and to some extent I wonder if it's an unfulfilled desire sort of thing. I guess what I'm trying to say is that my upbringing definitely did not make me a thrifty person, and may have caused the opposite effect.

I don't think I was ever jealous of the rich kids wearing Abercrombie in high school, but to some extent I always resented my mom's obsessive thriftiness after I became aware that we were actually pretty wealthy. There's definitely a difference between a "we don't need to buy this" attitude and "we can't buy anything just because" attitude, though, so in your case it really depends on how thrifty you plan to be.
posted by pravit at 11:38 AM on May 20, 2009 [3 favorites]

Until I was around 10, we lived on a small amount of money and my parents were very frugal by necessity. I did experience some difficulty with jealousy and wanting things- my mom would never buy a pack of gum for me at the grocery store (like Jessamyn's apparently). This led to me actually stealing a pack of gum (at age 4!) and my mom making me return it. When our financial situation improved dramatically around 10 I also ended up at a rich kids private school and went to those big houses you mention. It didn't really bother me because I liked my house and their houses felt too big.

The problems I had with money growing up hard more to do with a lack of consistency and communication with my parents. They would buy new furniture but we couldn't afford the movies. Cable TV was out of the question but sleep away camp (that I didn't want to go to) was fine. They would complain about how worried they were about money and then two weeks later come home with oriental rugs. It was very confusing and led me to feel that they indulged their wants over mine, plus they talked a big game about saving money and then spent enormous sums.

I guess my point is that if you're going to talk the talk you have to walk the walk as well. Really listen to your kids if they want something. For me, the absolute best technique to keep spending under control is the 1 week rule- if you still want X in one week, you can get it. I wish my parents had told me that- I think I actually learned about it from a friend. After I understood that rule, it helped me understand the differences between need and want in a way that my parents had never conveyed to me.
posted by Mouse Army at 11:50 AM on May 20, 2009 [2 favorites]

I grew up in a house with no running water and an outhouse out back. Sure, my parents could have taken out a loan, but they built the house as they earned money.

I think it really helped me develop as a person growing up, and certainly gave me insights on money and work that my (quite well-to-do friends) simply couldn't wrap their heads around.
posted by dunkadunc at 12:25 PM on May 20, 2009

My family, while not poor, was never able to afford things like flying when on vacation or trips to Disneyland or shopping at Whole Foods or anything. We lived in a one-story house and ate a lot of casseroles.

From third grade onward, I was in advanced-level classes where the majority of my classmates were MUCH richer then me. Their parents were mostly doctors and lawyers, and even the single-income families probably made about four times what my parents made.

Yeah, I sometimes envied their stuff. I wanted stairs in my house, I wanted to be able to go to sleepaway camp rather than the daytime YMCA, I wanted to take private dance classes. But, you know what? It just didn't bother me that much. I knew there were people who had it much worse than me, and I knew my family loved me, and that despite our lack of money they were willing to give me whatever they could. And it made it easier for me to budget and understand the value of things once I went off to college.

Honestly, I would have liked it if I could have had a car in high school, but other than that it was never a big deal to me.
posted by showbiz_liz at 12:41 PM on May 20, 2009 [1 favorite]

I live much like you do now. I own an inexpensive house with my husband and we're working hard to keep our savings up and pay off all of our loans. As an adult I am very, very grateful for the example my parents set financially and it has kept me out of many traps like ARMs, credit card debt, etc. For example, I didn't fall for any of the easy offers during the height of the housing bubble precisely because I discussed my parents' mortgage with them years earlier.

My parents had a smart strategy. Once we were old enough they didn't deny us things without giving us their reasons. We did the math together on things like paper towel use over a year, and on bad months they weren't afraid to show us the gas bill. In fact, they gave me a turn at paying the monthly bills when I was a teenager just so I would know how much we had coming in every month. It certainly made me think twice before asking for anything unnecessary.

So, I think the key to making lessons is open communication, especially with the older ones. I have a lot of friends going to seminars about personal financial planning and I'm always shocked at how much is new to them. So many parents hesitate to talk to their children about important things like saving, spending, bankruptcy, investing and insurance that each generation finds itself learning from scratch. It can certainly be scary to have to talk to your teenager about financial speed bumps, but it's completely terrifying if your parents seem unhappy and afraid and they won't tell you why.

As young kids my parents' cheapskate ways didn't seem to make much of a difference. Most of the toys in my house growing up were from yard sales or damaged goods from the local JC Penney outlet store. Not knowing any better, my brother and I just thought that most toys smelled funny and were poorly made. As a teenager I certainly struggled with my clothing budget, but no one really gave me much of a hard time.
posted by Alison at 12:44 PM on May 20, 2009 [1 favorite]

You've pretty much described how I grew up.

Do pay attention to ROU_X's point. Some of that may happen, but if you're aware of it you can probably deal with it head-on.

Read them lots of fairy tales. You will note that the poor kid always ends up ahead. When I started school I was surprised and puzzled to find out that some deluded people thought it was cool to be rich.
posted by tangerine at 12:58 PM on May 20, 2009

A bit of practical advice here--don't let them watch tv when they are too young to understand that commercials are targeting them. Toy adverts are relentless nowadays and you will weary of explaining why you won't buy some piece of licensed crap loooong before they get tired of asking for it.
posted by TWinbrook8 at 1:37 PM on May 20, 2009

One thing that I am very grateful to have learned about as a kid is not simply about being frugal and saving, but about time value of money. Teach your kids about TVM.

When I asked why we didn't have a [expensive thing] like the neighbors, I was told about how they had probably taken out a loan and shown calculations of how much that would cost over time. I was also shown charts of savings growing over time at different interest rates, and shown the dramatic difference that saving early makes.

Kids should get a small allowance that is theirs to decide how to spend, without parental judgment as to how it is spent. They will waste some of the money. Accept this just as you would them falling when they learn to walk. It's better that they do this when they are kids, with a smaller amount of money.

One thing that I don't feel I learned about as a child, and still have a tough time with, is when it's better to spend money. I was raised to make things rather than buying them, and do things yourself rather than hiring someone. It's very hard for me to spend money on paying someone to do something for me that I feel I should be able to learn to do myself, even when it might take time and energy best spent in other ways.

To a certain extent, money can give you options for how to spend your time. Talk to your kids about the decisions you make in this regard. If you are snaking the drain on your house, changing your oil, or otherwise engaging in something icky or time-consuming to save money, talk about how you are choosing to meet your savings goals by doing this, and how you could choose to pay someone else to do these things and have less money and more time.

Oh, and do try to dress your kids so they fit in with the other kids, even if they are too young to know they won't fit in. It makes a big difference. A very, very big deifference.
posted by yohko at 4:26 PM on May 20, 2009 [1 favorite]

I think a lot of the posts thus far have taken "living below your means" to strictly mean not going above them- that is, given the choice between accumulating debt to buy fancy stuff or just paying your bills, you should just pay your bills. My situation growing up was a little bit different, where my parents had enough money to take the fancy vacations and buy big flat screen televisions, but didn't. I think this might have been the situation the OP thinks he will be in by the time he has children. In this sense, is living below your means a good thing? Well, yes and no. My parents were very financially responsible, and they saved enough to weather the storm when my father was out of work for 3 years, enough to put their children through undergrad debt free, and enough to retire comfortably and/or help care for my grandparents if they should need it. A large cushion gives you peace of mind, and that's priceless. I received a great education that I'm very thankful for, not only from my financed education, but also absorbing that sense of responsibility, as others have mentioned.

HOWEVER, I think it's important to not adopt the attitude that can sometimes accompany being a scrupulous saver. "We can never have enough" isn't a good message to send your children, whether it's material goods OR the largest number possible in your savings account balance. Growing up, my mom would ask neighbors for their hand-me-downs rather than taking me shopping for new clothes when I needed them, even though we could easily afford them. I felt ashamed that she was asking, and also, as yohko mentioned, I suffered some pretty negative effects on my social life. Spend some money so that your kids learn the pride of self-sufficiency, the lesson of "Being responsible let us get this useful thing we really enjoy". Generosity is also an important lesson to teach your children. Even though I'm a "starving student", accruing debt to pay out of state tuition for medical school and living off scant financial aid, my mother is more likely to ask me for $20 ("We're taking care of your cat we got you when you were 13 and his food costs money, you know!") than to slip me some money when I come home. When we go out to eat at a restaurant as a family, it feels like a first date, where I don't want to order something too expensive. This has been going on since childhood, where my mom was mad if I didn't order off the kids' menu even at the age of 16. Sometimes I can almost see the "is she worth it?" wheels spinning in her brain. Don't buy your kids' affection, but don't trade it for a few extra cents either.
posted by alygator at 5:21 PM on May 20, 2009 [3 favorites]

As long as you live someplace safe, that's fine. There are snobs, many of them kids. Some of them may not value your kids because of their lifestyle.

I'm not quite as frugal as you, and my income is lower, but I certainly avoid consumerism, and raised my son without big-brand clothes, shoes and other stuff. But I did buy him clothes that were at least not horribly uncool; kids in his schools were hyper-aware of clothes. I bought him some cool consumer stuff (ipod, for which he was incredibly grateful and thrilled) and was able to send him on some trips and camps.

You have well articulated, considered values. Your kids will learn them, and adopt them or not. Try to have a spirit of generosity, too much penny-pinching messes with your head.
posted by theora55 at 9:02 PM on May 20, 2009

I think the key to your question is the concept of balance. A lot of finance blogs stress the importance of knowing what kinds of purchases are important for you and your family. It can be tough to raise a child in a world where peer pressure to have the right clothes, toys, cell phone, etc. (especially with girls) makes them question whether or not they have value. My approach is to help them prioritize what they value the most for their social well-being.

Other than that, it's fine to be frugal as long as you're not being stingy. My father made enough money to support my mother and two children, but he was always worried about how much things cost, to the point that my mother had to conceal our school clothes purchases (JC Penney sale items) for several weeks so that he wouldn't get mad at us for growing. All my life, I never heard the end of it. It's very tiresome when your parent is afraid to spend money on anything. On our visit to Disney World at age 12, we went to three, count em 3, separate tours for timeshares (that as enticing as they were to us kids, my father had no intention of buying) in One Day just to get free tickets, wasting a whole day and making us kids feel miserable. I always wanted to play the violin--I didn't get violin lessons because my dad thought it cost too much money. I just started learning the violin at age 25.

Every expense caused panic in my family. We never went to camp--too expensive, always stayed in the cheapest hotels with poor security ($20 a night is often dangerous), and generally felt that we didn't deserve to get what we wanted. When you don't feel like you deserve to get things that are really important to you, it can start to become "you don't deserve to be happy" or "you don't deserve to be rewarded for you contribution" or "you don't deserve a raise". It really does apply itself in other ways. So make sure you're children are indulged every once in a while, and that you're not sacrificing true quality of life for the sake ofthe almighty dollar. Otherwise you're no different than the 70-hour-a-week power couples who put their profit margins ahead of their children's needs for compassion and respect.
posted by mynameismandab at 1:46 AM on May 21, 2009

They will possibly "hate" you when they are adolescents, but will turn around and appreciate what you did when they become adults.
posted by The ____ of Justice at 2:26 AM on May 21, 2009

We didn't have much when I was growing up, and I remember at times being upset with my parents about it. I don't remember the cupboards ever being bare, but we clipped coupons and we didn't always get to go to the grocery store with Mom because there were a lot of things there we wanted that we couldn't have, many times (ice cream, etc.). We lived outside of the city and raised a lot of our own food - a garden with fruit trees/vines, chickens for eggs, etc.. We had basic clothes but rarely anything store-bought new. Mom took hand-me-down clothes at times from church friends who lived in the other part of town. Which meant that I did get second hand sneakers.

They were Vision Street Wear gray leather sneakers that we couldn't afford to buy new. I had wanted a pair for over a year since everyone else my age had started wearing them. They had black trim around the bottom and a tan diamond pattern on the heel. Black laces. Hi tops - worn, but not well worn.

I remember them in such detail because, when I showed up wearing them, finally feeling like I fit in with the other kids my age, for a change, their former owner - Andrew - recognized his old kicks and laughingly pointed it out to the class. I of course I never wore them again.

That's probably about the worst thing that is going to happen to your kid - some social embarrassment from kids who find their worth in their possessions and gain their status by belittling others. (You already pointed out they won't run into my particular situation.)

If your kid had to be the victim or the perpetrator in that situation, though, which one would you want them to be?

I had my first job when I was 12. I had been doing odd jobs (mowing lawns, stacking firewood, handy work jobs, etc.) for long before that, but that's when i got my first job. I was working for a dog kennel that I rode my bike back and forth to, getting paid cash under the table. I started paying for my own clothes and haircuts.

By 16 I was being paid a real paycheck for the first time, working 20-30 hours a week in the local supermarket. I graduated high school a year and a half early and started working full time to save for college.

I worked part-time throughout college - night security shifts, admin work at a background investigation firm. I managed to land paid internships each summer. I paid for the entirety of my college years on loan or what cash I made during that time and before it. I'm still paying those loans today.

I've had decent, respectable professional employment since the week after I graduated from college. A few years ago, when I was pulling down a comfortable 6 figures, I finally realized that I had way more than I needed and wanted, and I left the corporate world for non-profit work in the 3rd world.

Andrew's probably a multi-millionaire now, managing his father's real estate empire back in California.

I wouldn't trade my life with him for the world.
posted by allkindsoftime at 6:24 AM on May 21, 2009 [1 favorite]

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