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How to Talk to Your Adult Kids About Your Financial Assets

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At some point in nearly everyone’s life, they have to prepare for a challenging conversation. Speaking with your adult children about your financial assets isn’t always easy. Some believe that their situation isn’t their kid’s business. Others worry that what they have to say will disappoint their children. However, discussing your financial circumstances with your adult children is important. Otherwise, they won’t know how you want your estate managed or might not be aware that you need help. Luckily, it is possible to handle the conversation skillfully. Here’s how to begin.

Have the First Conversation ASAP

The sooner you start talking to your kids about your financial assets, the easier the situation is to manage. Whether it’s letting them know that you have enough available to cover you in retirement – which can be a relief for worry-prone kids – or letting them know what their inheritance may look like, getting the ball rolling is critical.

Even if you don’t have many financial assets, letting your children know now instead of later is wise. That way, they understand where you are today and can help make sure that your future is secure.

Plus, this lets everyone test the waters when it comes to topics like powers of attorney or estate executors. Ideally, you don’t want to make one of your children the executor of your estate if they aren’t comfortable with that responsibility. However, you won’t know if someone is averse to that title unless you talk about it.

By having the first conversation as soon as possible, you are also creating an opportunity. If you’ve never spoken about it before, your children might not know about your final wishes. If you have plans about where your financial assets should go after your passing, telling them now gets everyone on the same page.

Ultimately, these aren’t topics best discussed during an ongoing crisis. Make plans to sit down with your children as soon as you can to get everything moving in the right direction.

Talk to Everyone Together

If you have more than one adult child, getting everyone involved in the same conversation can make things easier. It ensures that all of your kids have the same information, decreasing the odds that there will be any confusion. Plus, it helps you avoid looking like you are favoring one child over another, which can make the situation more volatile.

Ease into the Topic Slowly

For many children, thinking about their parents passing away is hard. If you approach the subject too quickly, their emotions may spike, making the discussion less effective.

While you do have to start the conversation somewhere, try to use a gentle approach. Let them know that you want to plan on the off-hand chance something happens. Also, reassure them that everything is fine today (as long as that is actually the case).

You can also initiate the discussion by referencing new information you may have seen. For example, if you read an article about the costs of long-term care, you can mention that and let your kids know that it got you thinking. Then, just segue into the conversation naturally.

Focus on the practicality of the discussion. Mention that you have a plan and want to make sure it is followed. Try to remove any emotional context from the conversation, concentrating primarily on facts and hard numbers.

At Least Cover the Basics

In some cases, you don’t want to divulge every detail. If you aren’t likely to need financial assistance from your children or have substantial assets and don’t want them to see the dollar signs associated with them, then make sure you cover the basics at a minimum.

Let your children know where you keep all the critical documents. This includes your will, banking and brokerage account details, titles and deeds, powers of attorney, and anything else they may need to move forward should the unexpected occur.

Also, take a moment to summarize your financial situation. Let your kids know if you have enough to manage your retirement or if you might need support from them.

If you have strong relationships with your kids, you can certainly share more. However, covering those topics should be considered a must-do.

Enlist the Help of a Professional

If you are nervous about discussing your financial assets and plan with your children, consider getting help from a seasoned ally. A financial planner or estate attorney can facilitate a family meeting, ensuring you’ve covered all of the details.

By using a third-party, you can decrease the emotional context discussion significantly. Plus, they can help mediate disagreements or put their foot down on points that matter to you most.

Have you ever tackled talking to your adult kids about your financial assets? Did you find the conversation easy or challenging? Share your experience in the comments below.

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Mother’s Day: American Moms Are Struggling to Make Ends Meet

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There is no doubt motherhood has changed in recent years. Many American moms went from being stay-at-home parents in the 50s and 60s to full-time career women. Although it may appear mothers are superheroes, in all reality, many of them are struggling to keep up. Here’s why…

American Moms Are Really Struggling

Most of us are celebrating our mothers this weekend and everything they do. However, doing everything is exhausting. Should we really be celebrating the ability to work full-time, take care of the kids and home, when they don’t even have time for themselves?

“This ideal of what it means to be a good mom is to put your child’s needs above your own. An ideal worker in the U.S. economy means being fully dedicated and committed with your undivided attention – that you can come in at a moment’s notice, that you don’t have anything that distracts. This doesn’t work if you have kids,” said Caitlyn Collins, a sociology professor. And American moms are really struggling.

American societal, economic, and technological changes have drastically impacted motherhood. In 1975, half of the American moms were able to stay home with their children. In 2019, 70 percent of households have both parents working. Not to mention, the price of childcare continues to rise (between $12,000 and $14,000, depending on your location).

Moms aren’t getting a ton of help either. Even though fathers have stepped up a bit, the work balance is still unequal between moms and dads in households where both parents have full-time jobs. Additionally, about half of grandparents live more than five hours away, making it difficult to receive help if it is needed.

Combine that with social media and depression from comparing themselves to other moms out there, and lack of public policy, American moms have it pretty rough. Because paid maternity leave is only available to 17 percent of the United States population, half of moms in America take less than two months off after having their child.

Six times out of 10, after they return to work, they are shamed on social media for doing so so quickly (or simply parenting “wrong”). This has led to an increase in cases of post-partum depression, anxiety, and mood disorders in mothers in America. Even celebrities like Kylie Jenner and Chrissy Teigen have fallen victim to this scrutiny.

So, one day a year, we give these amazing women a “thank you” card and a nice lunch. But is that really enough? What else can we do to help these struggling American moms? 

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How to Talk About Money with Everyone In Your Family

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Money affects every aspect of our lives. For most of us, it’s more than just a practical tool. Yes, it’s a means to an end. However, money also has psychological and emotional aspects that can significantly impact us. The decisions that we make about earning, saving, and spending are complex, multi-layered, and often subconscious.

As a result, money tends to play a complicated role in all of our relationships. We operate with a certain money mindset, perhaps one we haven’t even explored in-depth. The people in our lives all operate the same way. Without discussing the deeper implications of money, this can lead to friction. If we can learn to talk about money openly, honestly, and from a place of deep self-understanding, then we can improve all of our relationships, including the relationship that we have with money itself.

Talking About Money is Tough

Talking about money isn’t easy, though. You may have some relationships where you’ve learned to talk about it out of necessity, such as in your marriage. You may also have some relationships where you’ve decided never to talk about money; coworkers often don’t discuss money with one another. Society has taught us many mixed messages about money that further complicate discussing the issue. The more we can learn to talk about money with everyone (and to know very clearly when we should not), the better we can all do when it comes to finances.

Learning to talk about money starts with working on your money stuff. You can’t have strong, honest, useful conversations if you haven’t dealt with your money issues. You can go to a therapist who specializes in financial issues to have these conversations. Alternatively, you can work through your thoughts by journaling or whatever other method works for you. Don’t underestimate the importance of looking at all of the complicated things that money represents in your life. Some questions to ask yourself include:

  • What are my earliest memories of money? How did they make me feel?
  • On a scale of 1-10, how comfortable do I feel talking about money?
  • What does money represent for you? (It might be security, power, love, opportunity …)
  • When you think about money, what emotions arise? (Fear, joy, confusion …)
  • What is one thing that you’re very proud of when it comes to money? What about one thing that brings you shame?
  • How are you doing financially compared to how you would like to be doing?
  • What are your financial goals?

You might also brainstorm lists. For example, at the top of a piece of paper, you can write, “Money means …” and then brainstorm as many things as possible to get to your core truths. Other examples include:

  • Money represents …
  • When I think about money, I …
  • The problem with money is …
  • If I have to talk about money …

Talking About Money With Your Family

Your family is one of the first places to start when you want to open up conversations about money. After all, they’re often the people who are most closely involved with your financial life. Of course, just because they’re close doesn’t mean they’re easy to talk to. Some families have so many nuanced challenges with money that they have become the hardest people to talk to. That said, if you can learn to talk about money with your family, then you have tackled one of the most important battles of your financial life.

Talking About Money with Your Spouse/ Partner

People who share money should definitely be talking about money. Even if you and your spouse have separate accounts, you’re contributing to the same household, and therefore you’re sharing money. It’s important to get on the same page about current and future finances. Even if you think you’ve discussed this topic to death, you might find that opening up new conversations about money can reveal new insights. Things to discuss with your spouse include:

  • What are your individual and shared goals when it comes to money? Think next year, five years, ten years, and more into the future.
  • What are the most significant financial concerns that you each have immediately and for the future?
  • List some things that you appreciate about your partner’s money style.
  • Share your truths about what money represents for you at a deeper level.
  • Likewise, explain your emotions around money.
  • Share how you feel when you two argue about money and what you would like to be different.
  • Express how you feel your partner sees you when it comes to money. Ask if this is true. Listen carefully to what they say.

When speaking with your spouse, here are some general guidelines to follow:

  • Begin the conversation in a calm state of mind.
  • If things get tense, call a time out. Set a time to resume the conversation when you’re both calm again.
  • Come to the table with curiosity about your partner’s experience.
  • Listen to everything your partner says with an open mind. Leave behind all judgment.
  • Share your experiences as authentically, honestly, and completely as possible.
  • If you feel upset, dig deeper to figure out why. Your money history may be influencing you.
  • If you can’t have these conversations in the way that you want, consider going to a couples therapist to jump-start the money conversation in a safe setting.

The goal when talking with your spouse about money is ultimately to come to both short-term and long-term money agreements in your household. Look for solutions that work for both of you. You can only do this when you truly understand where you’re each coming from.

Talking with Your Children About Money

Talking to your kids about money is an ongoing process. It’s your job to impart financial know-how to help them succeed in life. Of course, you need to do this is a developmentally-appropriate way. Some families use allowances to teach kids about money, although that’s not the only option. The most important thing to remember is that your kids are learning from you all of the time. Pay attention to what you say about money when you’re not actively trying to teach them anything. If you’re constantly stressed about debt, bills, or sharing finances with the other parent, they’re going to pick up on that. Make sure that the messages that you send them are the ones you want them to take in. Here are some tips for talking with young children, tweens, and teens about money:

  • Set your own goals for what you would like to teach them.
  • Use money mentions in their media to open up conversations.
  • Ask them their thoughts about money so that you understand where they’re coming from.
  • As they get older, show them what you’re doing when dealing with your finances. Explain why.

If you have adult children that are still coming to you for money, then it’s also important to start having some serious conversations with them. Often families get into a rut. They may discuss money, but in ways that aren’t productive. For example, if you pay your child’s rent, and you resent doing so, then you may not say anything for a long time then make a snide passive-aggressive comment that hurts their feelings. Talking more openly about money is a much healthier option. Here are some tips:

  • They are adults. Treat them as such. Show respect, ask questions, listen to their point of view.
  • Be clear about your boundaries. Know your limits and make sure that they know them as well.
  • Co-create financial goals together. Set a plan in place to achieve those together.
  • Admit a money mistake you have made in the past. This helps even the playing field so that the money conversation doesn’t feel like a shaming lecture from mom or dad.
  • Give them insight into your current financial status as well as your financial future. Allow them to see the whole picture.

Talking with Your Aging Parents About Money

As your parents get older, you may need to talk to them about financial matters. If talking about money isn’t comfortable in your family, that can be a challenging task. Nevertheless, avoiding it could be worse. Do you know what your parents’ financial situation is? Have you discussed what type of lifestyle they want as they age and how those costs will be covered? Do you know if they have life insurance or how you may pay for a funeral if they do not?

Sometimes these conversations are about more than just money. For example, if your parents can’t afford to live in their home any longer, you need to discuss their options. While you’re talking about money, you’re also talking about an emotionally-laden experience of having to move out of a treasured space. It’s important to be practical about money while also attending to the emotional experience of the more in-depth conversation at hand. Here are some tips for talking with your aging parents about money:

  • Show them respect. They may not be able to reciprocate, which is hard, but you can still do your part.
  • Stay aware of feelings that arise for you. Process those with a therapist or friend as needed. Don’t let them butt in on these challenging conversations.
  • If possible, deal with one challenging issue at a time. Give space between issues for parents to adjust to changes.
  • Let your parents know that you’re open and available to discuss other money issues when they’re ready.
  • Get support. Is there a family friend that might be able to mediate this conversation better than you alone?

Talking with Your Siblings About Money

There are so many different sibling relationships that it’s hard to categorize them in just one way. You may have a super close relationship with your siblings where money is rarely an issue. On the other hand, you may each handle money very differently, and that can bring up challenges in your relationship. If one of you pays for the other or owes money to the other, then that can complicate things even more. Likewise, if you each have significantly different money relationships with your parents, there may be underlying hurts that you’ll need to address. Perhaps everything is fine because you don’t talk about money, but what will you do when it comes time to deal with your aging parents’ finances?

Talking with your siblings about money is actually a lot like talking to your spouse about money. Follow the same rules about respect, sharing goals and dreams, listening with curiosity and kindness, and leaving judgment at the door. If you have past money challenges, it’s time to talk about them. If you can’t do that alone, it’s possible to get family therapy to open those doors. It’s scary to talk about money when you haven’t been – or to learn to talk about it in a new way – but it’s well worth it. If you can have those conversations, then you can stop letting money control your relationships. You can work together to meet your shared financial goals while respecting each other’s differences. It’s not easy, but it’s so very worth it.

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Wedding Registries That Offer Free Gifts When You Sign Up

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Wedding registries that offer free gifts

Somewhere around 2.3 million couples get married every year. The average wedding budget sits around $20,000. While that is a pretty hefty price tag, many couples receive a large number of gifts through their registries. Approximately $19 billion is spent on wedding registry gifts each year. To make your big day even more special, there are even some wedding registries that offer free gifts.

Wedding Registries That Offer Free Gifts

The period of time you are engaged and planning a wedding is one of the most exciting times in life. One of the more fun tasks of getting prepared for the big day is registering for gifts. As more retailers begin to offer registries, they have also begun to find a way to offer up free gifts. Here are some of the freebies you can get for registering with these retailers…

Amazon

Amazon has a number of freebies available to couples who register on the site. Most are bonus gifts that are thrown in when certain purchases are made. For instance, if you buy a piece of cookware, a bonus pan is added to the order.

Bed Bath & Beyond

Bed Bath & Beyond is a more traditional retailer to register with for your big day. Like Amazon, Bed Bath & Beyond offers free bonus gifts. You can view the possibilities in the company’s FreeBook, but they range from small appliances to dinnerware. Also, a completion discount will be added to anything left on your registry after the wedding.

Bloomingdale’s

Bloomingdale’s gives couples who register with them a $100 gift card when you spend $500+ on a registry. You’ll also get a 10 percent discount on any items left on your registry for up to six months after the wedding. Just like the previously mentioned retailers, Bloomingdale’s has bonus gifts available too for certain purchases.

Wedding registries that offer free gifts

Bon-Ton

Bon-Ton isn’t always listed among wedding registries that offer free gifts. You’ll need to check with the retailer directly. However, they have been known to offer free gift cards to newly registered couples.

Crate & Barrel

Register with select vendors at Crate & Barrel and receive free bonus gifts. For instance, once your guests have purchased $500 of Caphalon cookware, you will receive a free griddle. These freebies will change from time-to-time so you’ll want to check in-store. Crate & Barrel also offers any couple registered there a percentage off a tux rental, free save the date announcements, and 10 percent off all purchases six months after you get married.

The Container Store

The Container Store can help you stay organized in your newly married life. They’ll give you a free portable file tote for registering there. Additionally, free shipping and gift wrapping are offered on orders over a certain dollar amount.

Dillard’s

Dillard’s has some of the most attractive wedding registry freebies. You will get a free “I thee wed” wedding and home planner. You’ll also get free shower enclosure cards. Like many other registries, Dillard’s offers completion discounts and gifts. After your wedding, when you visit the store, you’ll receive a free gift (like a cookbook).

Certain brands available at Dillard’s also offer bonus gifts when you purchase certain items on your registry. These include Dillard’s china and stemware, and other cooking items. Anyone buying anything from your registry will also receive free gift wrapping.

JCPenney

JCPenney has a number of incentives available for engaged couples who register with them. Many of the freebies are bonus gifts depending on the purchase of another item. For instance, you can get a free Calphalon knife and trivet with the purchase of $400 in Calphalon products. Other freebies include a UDB flash drive, a mixing bowl set, recipes, cookbooks, magazine subscriptions, free liqueur glasses, and even a knife set.

Kohl’s

When you buy any three gifts after signing up for a wedding registry at Kohl’s, get a free bonus gift. Choices include a Calphalon knife and trivet, small heart dish, and a petite saucepan.

Macy’s

Macy’s offers a ton of rewards for people who register with them. Couples get 10 percent off every eligible purchase made during their registry timeline in addition to 5 percent rewards (given in the form of a gift card after the wedding). You’ll also get a free coupon book and brand completion gifts as well, like the retailers above. Macy’s offers a 20 percent discount on any purchases made after the wedding as well.

Sur La Table

When you register for select items, Sur La Table will give you free wedding gifts. Without making a single purchase, you have the chance to get a free cookbook, cut-resistant glove, gift card, or apron.

Wedding registries that offer free gifts

Target

Target gives couples who register with them 15 percent off any gifts you don’t receive from your list. You also have a full year to exchange or return anything. By adding certain brands to your registry, you’ll also get free bonus gifts when items from your list are purchased. These offers change from time-to-time so you’ll want to see what the latest deal is that Target has.

Things Remembered

Things Remembered is a great place to get personalized gifts. When you register for their bridal newsletter you’ll get a free personalized keepsake heart.

Williams-Sonoma

Register for gifts with select vendors at Williams-Sonoma and earn bonus gifts. Some brands gift something small for just adding them to your registry (no purchase necessary).

More Than One Registry is a Good Idea

Registering in more than one place is a good idea, too, especially if you have family traveling in for your wedding. Because the same retailers aren’t located everywhere, it may be easier for them to pick up something at Walmart or have it sent directly to you through Amazon.

Just be sure that if you register at one or more of the places listed above you are able to monitor what has been purchased. If you can, try not to double register for anything – or give people the open to mark it bought from a larger collective list.

Readers, have you heard of other wedding registries that offer free gifts?

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How Much Does a Divorce Really Cost?

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Most people know divorce can be costly. Along with having to divide a couple’s assets, both parties have to contend with a variety of expenses, including costs such as filing fees, lawyers, and certain services. If you want to know how much a divorce costs, here’s how to estimate what you may need to pay.

How Much Does the Average Divorce Cost?

A typical divorce in the United States costs around $15,500. The average hourly rate for a divorce lawyer comes in at $250.

However, there are a lot of factors that determine how much a divorce costs. In some cases, it is possible to get a divorce for less than $500. In others, it can cost $30,000 or more to divorce a spouse.

The Factors That Determine the Cost of a Divorce

How much a divorce costs depends on a variety of factors. For example, where you are getting a divorce plays a role, as different states (and even counties) may charge different fees.

Additionally, if you opt for a do-it-yourself divorce, you’ll spend less than if you need to hire a lawyer. Similarly, deciding to use mediation or a collaborative divorce may be less costly than the traditional approach.

Whether you have children or not also impacts the final price tag. Plus, if you and your spouse generally agree on the major points, such as the division of assets, child support and custody arrangements, and similar considerations, the process may be less expensive than it the situation is more contentious.

The need to go to trial also makes a divorce more expensive. If you can avoid going to trial, you can save money on your divorce.

How Much Does the Least Expensive Divorce Cost?

While the actual cost varies by location, a divorce can cost $500 or less. However, both parties must agree on all major issues, a circumstance known as an uncontested divorce. Additionally, one of the parties will need to create their own divorce papers.

Usually, fill in the blank divorce papers can be purchased as part of a kit or you can use an online service to draft your own paperwork for a fee. In some cases, you can actually get a packet from your local court or state website for free or merely for the cost of printing, allowing you to save as much as possible.

Once the documents are ready, the person filing will need to pay a filing fee. These vary by state. In California, one of the most expensive states for filing for divorce, filing a petition for dissolution of marriage costs generally costs $435. In Mississippi, the cost is only $113.

However, if the filing fee is genuinely unaffordable, many states allow you to submit a form and request a waiver. Usually, you will have to show proof of financial hardship to qualify for a waiver, though it is worth pursuing if you are a low-income household or experiencing significant financial difficulties.

You also need to pay a fee to have the other party served with the papers. Again, this typically varies, though isn’t as costly as the filing fee.

Hiring a Lawyer to Handle Your Divorce

When you need to hire a lawyer to assist during your divorce, the lost goes up dramatically. In most cases, attorneys charge by the hour, so your exact cost will vary depending on the amount of work they have to do to handle your case.

Hourly rates for lawyers are commonly several hundred dollars, with some even exceeding $500 an hour. They usually charge for a variety of activities, including the time spent on phone calls, emails, text messages, paperwork preparation, legal research, preparing for depositions and discovery, preparing for court, and representing you on the day of your hearing.

However, you do not have to use a lawyer for every part of your divorce. For example, you can opt to only use an attorney for the creation of your paperwork, allowing you to gain access to their expertise for just that task.

Other Costs: Mediation or a Collaborative Divorce

Using mediation or collaborative divorce is less expensive than the traditional option that involves going to trial. If you go the mediation route, you and your spouse get together with a neutral third party who helps you resolve any disputes.

If you choose a collaborative divorce, both parties will need an attorney. However, you will attend meetings together instead of going to trial, working to resolve any issues until an agreement is reached.

The cost for mediation or a collaborative divorce can range from a few thousand dollars to $9,000 or more, depending on how complex the case is and how many meetings are necessary. But, in most cases, it is cheaper than going to trial.

What If We Have Children?

If you have children, you can use any of the options above to get divorced. However, it makes the case more complex as you have to address items like custody agreements, visitation, and child support.

Essentially, if you have kids, expect it to cost more than if you were a couple without children. The only exception may be if you choose to use the do-it-yourself approach, though there could still be additional fees or requirements that add to the overall cost.

Is a Legal Separation Cheaper Than a Divorce?

In many instances, a legal separation costs about the same as a divorce. You still have to create formal documents and file with the court, so those charges are usually similar to those associated with a divorce. Similarly, if you use mediation or lawyers to come to an agreement, you won’t be charged less just because it isn’t a divorce.

However, if you believe that you may reconcile, then a legal separation may be a better option. With a legal separation, you remain legally married but are able to create separation between your lives formally. Under this agreement, you are not allowed to get remarried unless you choose to divorce. You also have legal rights to inherit from one another and to certain benefits, like Social Security.

Plus, a legal separation is reversible. If you resolve your issues and wish to reconcile, you can file to remove the legal separation. With a divorce, the dissolution of the marriage is final. If you ultimately reconcile, you would have to remarry legally to reestablish the union.

Are you divorced? How much did getting divorced cost you? Share your experience in the comments below.

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You Need More Than Money to Join the Upper Class

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I used to think social class was directly tied to wealth — if you were rich, you were upper class; if you were poor, you were lower class. If you were neither rich nor poor, you were middle class. Of course, even then I had a sense that because “rich” and “poor” are such relative terms, a rich person has more money than I do, a poor person has less, that most of us think of ourselves as middle class even if we’re not.

My parents own a home in a retirement community in Florida. The people there dress down, get involved in all kinds of activities — everything from a kitchen band (whose members play utensils like instruments) to a rowing crew — and are generally pretty friendly. You might consider them middle class, but many have accumulated more wealth than the average American, and they maintain two homes, one in Florida and one up north.

Upper Class vs. Middle Class

Once when we visited my parents, my husband and I drove to a nearby community (also inhabited mostly by retirees) for dinner. The entire atmosphere there was different. Everything about the neighborhood shouted, “Upper class!” The buildings were fancier, the clothes dressier, and the people not as friendly. My parents’ neighborhood has several athletic courts, a community building, and boat docks; the other community boasts several blocks of restaurants and boutique shops. As we strolled down the streets, where I felt a bit uncomfortable in my middle-class clothes, it struck me that many of the people who lived there could have a lower net worth than my parents and their neighbors. They might be upper class, but they are not necessarily wealthy — in fact, they could be deep in debt.

Social Class is More Than Just Your Net Worth

I finally realized that social class is not just about how much money you have, but also about how you spend your money and how you present yourself. Earning a high salary is not enough to break the bonds of social class, nor is winning the lottery. Those who are born to the upper class have the advantages of being taught from infancy upper-class social skills and vocabulary and of being surrounded by the things (clothes, furnishings, etc.) that signify good taste. Anyone who wants to be a part of the upper class, but is born in a lower class, must be a sharp observer who can understand and imitate the social graces of the upper classes. (Incidentally, those of us in the middle and lower classes also learn the social skills, vocabulary, and tastes of our respective classes, but few people try to imitate us.)

Class and wealth are closely related, and it’s unlikely that someone in the upper class is broke or that someone in the lower class is a millionaire. If you knew that Bill had $10 million net worth and Bob had $10 net worth, you could probably guess which class each belonged to. However, Bill might wear his hair in a mullet, decorate his home with velvet Elvises, and invite all his friends over for NASCAR parties, while Bob makes a high salary but spends it immediately to pay the mortgages on three homes, a vacation in Europe, and new Dolce & Gabbana suits.

Do Appearances Matter?

A reader commented that looking poor may prevent you from socializing with wealthy people, who can help you increase your own wealth. This argument has some merit. Appearances and actions do mark us as members of a particular social class and, in some sense, actually make us part of one class or another. However, not all wealthy people are part of the upper class, and not all upper-class wealthy people will refuse to socialize with you just because you are not wealthy or upper-class, as well.

Many middle-class people and even some lower-class people have accumulated a great deal of wealth. Socializing with wealthy people of the class in which you feel comfortable can be of more benefit to you than trying to fit in with a group of people who not only make more but also spend more than you do. Middle-class, wealthy people have contacts who can help you find a better job; they also know how to save and invest the money they do earn. Advice from them could be even more valuable than advice from someone who spends their income on all the trappings of the upper class.

I often wonder why so many people think upward mobility is a goal worth the effort. To fit in with the upper class, not only would I have to learn how to act differently from the way I grew up, but I would also have to spend a lot of money on the right clothes, the right car, the right home, and the right education. And even if I do learn to fit in with members of the upper class and benefit from their wealth-gaining insight, I still might not be able to increase my income enough to cover the extra expenses.

Why Do People Overspend On Upward Mobility?

Juliet B. Schor, The Overspent AmericanJuliet B. Schor, in her book The Overspent American, argues that we spend more money on socially visible goods, largely because we fear “falling down” to a lower class. Ironically, overspending almost guarantees that we will fall if we lose our source of income. If we already spent all our money to buy prestige, we would have nothing left to buy necessities. I wonder why we don’t fear climbing up the social ladder instead. After all, it costs a lot to live like someone in the upper class. Plus, moving into a new social class requires a new way of presenting ourselves, and when that happens, there’s no guarantee that we will still feel comfortable with our old friends in the social class where we used to be at home.

I’m not arguing for a caste system. I certainly believe we should be free to move from one social class to another, and I enjoy interacting with people from all social classes. I also have nothing against anyone whose goal is to be part of the upper class. But I, for one, am happy in the middle class. I’d rather maintain my position here, where I already feel comfortable being myself, and maybe one day I will have enough money to retire to a nice, middle-class retirement community in Florida.

Photo credit: Flicker.com/ caribb

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