Raising your kids with money

[LivingAlmostLarge]

So if you are making a lot more money than you grew up with, do you ever wonder how it'll affect your children? I'm realizing how much more DH and I have right now compared to when our parents had us.

Our parents just had a lot less due to circumstances but DH and I very financially secure and I realized we have a lot of extras we didn't have growing up. We're not just talking say paying for college, but small things.

A newer car, yard guy, cleaners, eating out, not clipping coupons, not worrying about seeing a movie or buying a book, or just less frugality. But it's different.

How do you raise your child to understand being fiscally responsible but having a pretty generous lifestyle? We do tell our kids no and they both have allowances. We also teach about saving and spending and giving back. They have to save 50% of gifts and get 50% to spend. And we give back by doing projects and time volunteering.

But I'm wondering if we can teach them to live within their means? Or will they expect their means to be rather comfortable?

[Singuy]

Hard hitting question. I don't know what the right answers are. My wife and I both came from family of the lower class. We both are heavily influence with parents who are tight budgeters(me more so than my wife). I had hard limitations growing up. I believe the first NEW toy I have ever received from a big box store was when I was 9 or 10? It was either garage sale toys or bust. My first bike was a girl bike found in a nearby dumpster.

Now looking at my 23 month old baby girl, who has been to Disney way more times than I have combined in my life time. I take her to Disney most mornings just so I can get some exercise before work..lol.

I think a key aspect is to take my kids outside of the American life bubble. Expose them to 3rd world countries(by hanging out with the locals, not seclude ourselves in a fancy 5 star resort with an ocean view). They need to see how great they have it, and how great everyone have it here. So next time when they feel like complaining that they need a new xyz..they can think about how kids in other countries are having a hard time finding clean water.

[disneysteve]

Great question. I definitely want to answer but we are actually traveling at the moment. I promise to get back to you on this. As the parent of a now-22-year-old daughter, I can tell you what seems to have worked for us.

In the meantime, we will arrive at Disney World tomorrow for what I think is our daughter's 25th or 26th visit, which feeds right into your question actually.

[Snydley]

Hi-
Great thread. I am dealing with this issue right now as we have a 10yo DD. DH and I grew up middle class, and now we are making an income in the top ~4% I think. Here's what I'm considering:
(1) No house cleaners, period. I can now easily afford them and don't want to clean, but I'm not comfortable with her living in that level of lifestyle.
(2) Remain a bargain hunter. One example: DD wanted to try skiing last season. I bought her used equipment and her boots in particular were really dinged up and ugly. She outgrew them so we went to get a new pair. Looking through the used section, it first looked like the only pair in her size was a boys boot that was very used, didn't match her skis, with red stripes, etc. She said, "could I get a nice pair this year?" This pair was $49, the nice new pairs were $199. I said sorry, no, I can't justify the higher price. She wound up finding a blue used pair that she was happy with, but I wasn't relenting if she didn't. She's lucky she's skiing at all. I think it's important to do things like this, to show a real bottom line with $. You don't just get what you want.
(3) We plan to pay for DD's undergrad, but she is not getting a dime for spending money- she must work summers and during the school year if needed to cover eating out, etc. I also firmly believe she needs to work in high school, crappy jobs hopefully (that can be fun if other kids work too) like pizza parlors, grocery stores, etc..grueling shift work where you don't allow yourself to check the time too much as it just drags on.. It's good for your soul to work in this manner when you are young.

Also- we live in a largely working class town and that will help a lot. Kids don't wear UGGs here, they were the knock-off brand, for example. Also, her girl scout troop is planning a trip to a horse ranch and the price tag is $350 per girl. Her leader just told her troop that if they all don't sell enough cookies no one is going, as it's too much for the parents to pay. (Great!)

The other faculty at my work mostly all live in the upper class Boston suburbs and it's like another world. Their college kids are spending their summers traveling Europe on their parents' dime! Unbelievable. I also don't think these kids ever actually work for spending $ in high school, as they are studying all the time and involved in 'college-application boosting' activities. I want my DD to get some real life education as a teen (like, cleaning toilets, waiting on rude people, etc.).

Also, we aren't into having shiny new things. Our fridge has rust on it, but it still works, so we don't replace it, because that is wasteful and bad for the environment. I point this out to her whenever it's relevant.

We do now go out to eat a lot, and we'll be traveling more. I love going out to eat and I'm so happy we can go more often now. I can't give that one up.

[Fishindude77]

I used my dad's philosophy on my own kids. I was raised in a pretty well heeled family; nice home, cars, vacations, good lifestyle, etc. We were well taken care for things like food, clothing, were taken on nice vacations, sent to decent schools, etc. but we were never just handed money for general spending or to buy things we wanted; bikes, toys, cars as we got older, etc.

Dad said .... I'm not going to give you the money, but I will certainly provide opportunity for you to work and earn the money, then you can decide for yourself when you have saved it, if that item is still something you want / need.

[moneybags]

But I'm wondering if we can teach them to live within their means? Or will they expect their means to be rather comfortable?

You can definitely teach them! We are upper-middle class. We've always set parameters on what the kids could have, while indulging them (compared to what I grew up with). For example, on vacations we always gave them a souvenir budget of around $20. We did not say yes to everything they wanted.

We have constantly talked about money and making good choices. I never made them save x% of their money, but made sure to point out the value of saving vs. impulse buying, etc.

For college, they are/were required to earn their own spending money. Again, I do not manage this money in any way, but we have money meetings to see how they are doing. Neither ever ran out of money.

My daughter is currently in grad school. She is living on her own, within her means, on a minimal salary. The only expense we pay for her is her cell phone. Just the other day she said to me, just imagine how much I will be able to save when I get a real job!

[LivingAlmostLarge]

Interesting that there is a lot of different train of thoughts here.

[Jluke]

not clipping coupons

I think using coupons is a great way to teach kids about saving money/frugality.

Today I spent $80 but after coupons my bill was $60. Too easy.

[rennigade]

Dont act like a snob and they wont either. Its not rocket science.

Ever see young kids sucking down starbucks like mommy and daddy do? They dont want that crap but they think its cool. Same with texting/driving...when mommy and daddy do it the kids see it and think its the norm.

Dont be a tool bag and your kids wont either...of course there are exceptions.

[disneysteve]

I agree with everything that has been said so far. I want to chime in and try to keep this as short as I can.

1. Set a good example. I think this is really the key. If you are frugal, careful with your money, and show appreciation for what you have, your kids will hopefully do the same.

2. In an age-appropriate manner, throughout their lives, teach them how you would like them to handle money. Also, talk to them about how what you do today is different than what you did in the past when your financial situation was different. Make it clear that you haven't always lived this way and that they, in their own time, will need to start at the bottom and work their way up. Instill in them realistic expectations about what their lives will likely look like when they first venture out on their own and that it will probably be different than the life they enjoy at home.

3. Teach them to give back. Charity is important, but not just writing a check but also going out and seeing the people who need help. Your kids should understand their privilege and see first hand how others have to live. Singuy mentioned 3rd world travel, and that's true, but unfortunately you can expose them to nearly 3rd world conditions right here in the US depending on where you live. I spent 17 years working in one of the poorest cities in America. It's not hard to find places to volunteer there and see poverty up close and personal.

4. Avoid saying "we can't afford it" because chances are it isn't really true. Instead, explain why you choose not to spend your money in that way. Talk about your priorities. Talk about budgeting and how your money is already allotted to other things.

5. Teach them to shop. That's where things like sales, coupons, comparison shopping, internet searches, and more come into play. We all need to shop. We all need to buy things to live. Help them understand the best ways to get what they want at a good price. That also includes flea markets, thrift shops, yard sales, ebay, craigslist, etc. As with everything, keep the lessons age-appropriate. Our daughter is 22 and just this past year I taught her how to buy airline tickets. She didn't understand when we were browsing prices on a weekend and I told her not to buy until Tuesday. Then Tuesday came and she saw how dramatically the prices dropped from just 2 days earlier.

I'll stop there for now.

[Gailete]

My mother came from a depression era family of 15 kids -no spare money there. She remembers when an older sister got a job and bought a toothbrush and toothpaste, my mom would sneak a smidgen of the toothpaste and I guess rub it in her teeth.

I was raised, one of 5 kids, that my dad deserted my mom and us when I was around 7-9 years old and my youngest brother still in diapers (cloth). Times were tough and i still remember the one year that my sisters only birthday present was a bottle of deodorant! We grew up poor, but my mother was an etiquette policewoman and whether we had much food on the table, the table was set properly! Education was encouraged K-12. Even if we didn't have money for books, we made frequent trips to the library. I still remember at that age going to the public library almost everyday after school to get more books to read. My husband and I were talking about that the other night and he said in the this day and age, Mom would have been arrested or we kids placed in foster care! No one lets their kids wander like that, especially with no cell phones. I even remember going to the grocery store for her several blocks away. At one point the neighbor boy (a pyromaniac) got in our house when we were at church and set all of our beds on fire. Mom had done laundry that day and as usual she had set our clean clothes on the beds for us to put away. We lost a lot that night. As much as possible, everywhere we moved the important thing on my list was where is the library. As someone with dyslexia this is a good sign! I remembering reading the Emily Post book of etiquette in the library and was fascinated at what was considered the minimum items for having a home. So many sheet sets, so many pillowcases, so many napkins, towels etc. This was not the lifestyle we lived and considering the fire we had earlier, certain not a stash like that to be found in our home. But all the other rules were fascinating to me. Stood me in good stead as I grew up although most folks think etiquette is for the birds these days.

So we all grew up poor and other than one brother, I was the only one of we kids to hit the over $30K/year income. Maybe my younger brother has now, I'm not sure. Until I became a nurse, money was still an infrequent thing. My boys never got an allowance. I think my feeling on that was, that unless I got an allowance no one else was going to. My boys were told no many times, whether we could afford something or not was discussed. They knew to never ever ask for stuff in the grocery store. Those kids that whine their whole trip through the store with the mom telling them to behavior, shut, up fill in the blank or they wouldn't get a treat grated on my nerves. So we would get to check out and where the whining from other kids intensifies, my boys were busily arranging the messed up candy bars, lifesavers and gum. If I was particularly flush with some money I would at times tell them to pick one out for each of them. They would appreciate it as the rare treat it was. Those boys both ended up working in that main grocery store we shopped at, with my youngest working there 15 years achieving the rank of frozen food manager. My older one walked into the ice cream place that was on his way home from school and told them they needed help and offered himself up to be that person, and that was his first job. Before he knew it he was holding the keys and closing for them! It has not been unusual for both the boys to be working 2-3 jobs at a time. If they wanted something, they earned it.

I think that what I tried more than anything to teach them and that was responsibility, do what you are hired for and do the best job you can. My older son makes more than us and they think nothing of using a credit card when needed, but my DIL handles the family finances well apparently, but for his work he also has to have money to buy stock as he also sells on line, making way more than I do! My youngest doesn't have a credit car at the age of 34. Has learned how to use his debit card as needed when traveling. He has a tight budget, but he has managed to save cash to fly a few times on vacation or trips to family weddings.

They learned how to handle the absence of money. If I had had more money when they were growing up, I'm not sure what I might have done differently. They have seen that when something is important to me we find a way to get it, but I feel like somethings like my sewing machine, I know I don't spend oodles of money on me otherwise, so why not something that I enjoy and can use for my business. Which means they know that buying something special may need sacrificing something else. I'm glad to see how they handle their money. I wish my younger one could make enough at his job so that he doesn't need to find temp work or a PT job in his off hours. But he has a list of goals and is working towards them and has accomplished many of them. He is the son that is autistic, so to see him living on his own totally self-supporting is a wonderful thing! He has a regular job. He earned the job and not under a program for kids like him. While boss may suspect it after a while, he has never identified himself as 'handicapped' when applying. He just passed his 5 year point with the job and the first few years he worked it part time while running the frozen foods at the grocery store.

He is also my angel in disguise as he helps me get groceries and run errands as well and is happy to do it in exchange for a free meal and getting to sneak a candy bar on to the conveyor belt at the grocery store! Making up for lost time.

My kids certainly aren't at this point upper middle class, my oldest son has a chance at that, so we will see.

[Smallsteps]

The topic of kids and money have many strategies and many outcomes.
There is in my opinion no one size fits all strategy. My siblings and I all had the same insight and lessons from parents, but the outcomes could not be more different.

I took into account what style of learner each of my children were.
2 of mine could learn from examples and 1 insisted to learn the hard way.
I tried giving advice and gentle suggestions but in the long run just like many other things in life outside influences have some good / bad effect.

As they became young adults, they have changed some habits / styles with money.
My spender child now has a spouse that is extremely frugal and focused and is finally completely on the saving / investing train.

My frugal child has in my opinion eased up on savings and now has a couple of wasteful habits influenced by spouse who was extremely poor and had no money training at all. they do have a good income and savings I just feel they have some opportunities to save invest that they are not doing (yet)

My learn the hard way kid has made great headway with plans/ finance even though spouse was at first clueless about finances. the spouses family were a hide the reality from kids kind of parents, so they had no idea how expensive basic items in life are.
I have seen People come from all walks of life and parents, the outcomes in some cases surprised me. People I thought would be ok failed miserably and some with many obstacles or slow starts then flourished.

[Gailete]

Smallsteps - I have seen that as well and it covers more than finances! My older son is beyond the 'bright' category and knew his alpha-bet by 18 months, etc. So, when second son came along I tried not to compare them. When younger son hit 18 months and wasn't even talking it hit me that he may have a problem. His pediatrician got him into a program quickly and 2 weeks before his second birthday he came over, patted my cheek and said 'mama'. I cried. Within weeks he was talking in full sentences, never did baby talk. But to have two kids so very different was a challenge. Even the autistic one is very bright and excels in some areas. But I had to really be careful to treat them as the two individuals that they were. Then had a step-son for a while that was a few months older than my first, but he had learning disorders out the wazoo and had basically been raised by wolves it felt like (his bio parents thought it easier to yell at him or wash their hands of him than to RAISE him!). I thought I had accomplished something when I taught him to use a napkin. He didn't understand why he didn't get the privileges that my older son did. Well he lied non-stop, had no common sense, couldn't think through a problem, etc. Totally different kid than my two. And he had been spoiled rotten by his other family members.

I know when I was growing up, I don't know what my mom threatened the other kids that didn't do what they were supposed to, but there was one and one only punishment that she could offer me that would 'keep me in line'. In 7th or 8th grade I was told if I didn't get my grades up I would not be allowed to go to the library!!! Point of reference, most parents would have been super pleased is their kid brought home the grades that I did. As my mom said, she knew I could do better.

Children needed to be raised as unique beings, and above all not compared to each other verbally in front of them and most especially not to other people in front of them.

[LivingAlmostLarge]

Very neat. I've been pushing my DH to stop saying we can't afford it. He says it a lot. I told him I want him to say we don't want to spend our money on it right now. We have other priorities. I'm trying to push that yes we can afford it so our kids realize how much we have.

My DH was raised very cheaply by people who make very poor financial decisions in the sense they are always trying to cheat the system and steal literally any money they can from anyone. They are like grave robbers. I mean that most literally after this past year. This is not an exaggeration nor understatement. There have been times when his honesty his parents have been disgusted by.

So I want to make sure he realizes he doesn't give our kids are problem understanding and appreciating all we have and not to act "poor" and take from others because they "think" we are poor like his parents. I want them to make good choices and be kind and generous.

Disneysteve lots of poverty in every city. It's why we volunteer at shelters once a month so my kids can see their birthday parties are so much more than what others have. So they can appreciate it.

But that teaches I think a difference of circumstances. I want them to also understand how to handle money. Guess it'll just take time. They are pretty good and don't ask or whine for anything in any store ever. But then I'm not a big shopper and i usually went at night without the kids.

[Gailete]

At one point in my life I went to a fairly small church so you pretty much knew everybody and could make a good guess at their income. I, for awhile, was also one that helped count and recorded donations/tithes. After a while I couldn't take it anymore. The highest givers were ones that no one would have suspected. I remember once a visitor asked me about one of the little girls there that was wearing hand-me-down/thrift store clothing. The woman whispered to me "Is her family poor"? Probably not technically, but they lived frugally and gave to the church. Others that always had money to go out for lunch AFTER church, never seemed to make a donation. Back then I wasn't taking all the medication I do now and my mind was like a steel trap with the numbers. I just couldn't stand knowing these intimate things anymore. I can tell you that the children that looked like they came from the poorer families, probably looked like that as their parents felt it was more important to give, than to buy their kids name brand clothing.

The kids that were dressed sharp were ones whose families gave very little. I remember talking to one young lady in high school about helping her mom with dishes and she said that her mom didn't want her doing dishes as it would ruin her manicure and dry out her hands. More things like that, but what that girl was learning was above everything else SHE had to look good and make a good impression. I was shocked by this sort of thing since not only had I been doing dishes since I was in 2-3 grade (I remember when my mom had a broken arm she demonstrated how she could wring out a dish cloth better than I could with two hands!?). I was also helping with cooking in 4th grade (on the back of my 4th grade report card my mom had spelled out what I had to do to get a roast with carrots and potatoes into the oven - I was 9-10 at the time) and by high school I had to cook the entire family meal on Thursday nights, and oh I also still had to do dishes. My brothers got to rotate who dried, but I got to wash all the time. Let me tell you I hate doing dishes and am so glad to have an excuse to have someone do it for me now! My mom didn't care in the least if my hands dried out or my nails cracked.

I think these sort of things end up being reflected in all areas of life. Me knowing how to cook before I graduated high school at 17, put me light years ahead of women that never learned and so either their grocery carts are jammed with pre-made dinners, or they go out every night. Both causing the food bills to be enormous. I learned to sew and so even though I am never in the forefront of fashion, I have always been clothed for a much cheaper price than most women.

The best things that we can teach our children is how to do things and that how using your own labor can save you so much money because you don't have to hire it out, or go out to eat. I got this email from my autistic son the other day who when he started living on his own could make a sandwich maybe, didn't get into the cooking until he understood how much he was spending on that.

Hey, just made spaghetti! Used more sauce than I should have though and I'm almost out, so can we make more next time I'm there?

Call me one proud mama. The 'we' in making it is me sitting a the table while he cooks and giving guidance if needed. He has also mastered waffles.