Affluent parents -how do you handle money and your kids?

[Anonymous]

I can only really say this in an anonymous forum, but my husband and I did not grow up with money. He grew up with responsible, pay with cash, cut coupons kind of parents. I grew up with in debt, buy more than you can afford parents. We have been fortunate in our careers and are very comfortable. We are struggling with teaching good money and buying habits to our kids. We are surrounded by kids with a lot of money at school and in our neighborhood and we are realizing we need to get serious about this and making sure we don't raise completely spoiled kids. To be honest, we likely have been too indulgent. Our kids are 11 and 13. Looking for advice from other similarly situated parents.

[Anonymous]

OP Here, also please avoid the snark. I realize people are struggling and that the topic itself might seem indulgent but I honestly am looking for advice from people in a similar situation.

[Anonymous]

Dave Ramsey has a kids program for learning about money. That might be something to look at to teach them to be responsible with money.

[Anonymous]

I've thought about this too. I don't plan on buying my child the latest and greatest things or designer clothes. My goal is to buy the type of things I had, which were good enough. I hope my kid thinks he is middle class and never realizes that is parents have money.

[Anonymous]

We both grew up like your husband and are fairly well off now. Three kids. We aren't that indulgent except with activities and experiences. Our kids know that they are expected to grow up and become independent and self supporting. They will have responsibility for paying for college (not 100%). Oldest had to pay for his applications. They are expected to work in high school. We didn't buy the oldest a car and don't intend to buy the others cars either. We have an old one they can borrow. (Oldest just bought his own car).

We also model frugal behavior. We don't waste money by eating out when we could plan in advance to take sandwiches with us. We stay in one hotel room. We use groupon to plan some of our vacation activities. Last night we taught our oldest about camping because he wants a summer trip and doesn't have much money to spend on it. Camping is a fraction of the cost and then you can cook your food instead of buying - we have gear he can borrow. If we are capable of doing something we don't pay others to do it. Just the other day, my kids decided to take over caring for the lawn so we can save $140 per month (we were paying for this because of an injury that prevented us from doing it and the kids weren't ready for this responsibility). We do our own brakes on our cars. Etc.

Kids got allowance from a young age and have to buy all gifts for family and most of their social activities unless it's a family event - like movies with friends.

[Anonymous]

I am never sure how to characterize my wealth, we are not super high income ($225,000) , but have a decent size net worth ($3M) due to grandparents. We are in our mid 40s with a 12 year old. What we do is make it known that we have a budget that is in line with our priorities and share some pieces of it with her. We only discuss our allocation of spending money after 25% comes off the top for retirement. After that and taxes and charity, there isn't too much left for indulgent spending anyway. But even if there were, I think the approach we take is to talk about the fact that money is a limited resource and we have to prioritize our spending. The fact is that unless you are extremely wealthy, everyone has to prioritize.

[Anonymous]

Same boat as you OP. I try to teach delayed gratification with respect to material goods. I'm fine with waiting and I appreciate what I get. My brother buys everything and is miserable. I want to raise my kids like me.

There are many ways to teach that depending on your values. I give my son a pretty big allowance but he has to learn to save to buy what he wants. And I taught him to save a third of his income....

[Anonymous]

I grew up wanting for nothing and my husband grew up solidly middle class. We pay for experiences and basics. She pays for stuff with gift cards, allowance and money she has earned. She is already planning for her first job so she has a steady income stream.

[Anonymous]

We act like we have no money...I frequently tell my kids they can't have this or that because it's cost too much. I make them pay and work for what they want. I don't give them all the best clothes and best toys/gadgets. They can feel what I'd like to not wear name brand everything, I did. It made me a better person. We are going for character development, not helping them fit in with well to do friends.

[Anonymous]

We are in a similar situation as OP. Our strategy is to teach budgeting. For example, on vacation, kids get a $20 budget for souvenirs, they have to shop and choose wisely. When they get older, I plan on giving them a seasonal soothing budget. If they want to blow the whole season on a monclear vest, they best make sure they have pants and shoes that will last them until the next paycheck!

One of the reasons husband chose the job he chose is so we could go on nice vacations and enjoy some of the nicer things in life.

Acting like you don't have money won't solve your problem. Teaching positive money management will.

[Anonymous]

Seasonal "clothing" budget

[Anonymous]

Anonymous wrote:We act like we have no money...I frequently tell my kids they can't have this or that because it's cost too much. I make them pay and work for what they want. I don't give them all the best clothes and best toys/gadgets. They can feel what I'd like to not wear name brand everything, I did. It made me a better person. We are going for character development, not helping them fit in with well to do friends.

We discuss budgeting and saving as I don't want my kids to be oblivious about money. Or entitlement or gluttony or arrogance about "things". Delayed gratification is a good thing as is the understanding that the "latest and greatest" is not a necessity. But they need to understand how money works or they assume it grows on trees and is limitless.

[Anonymous]

Live by example. If you have a huge house, fancy cars and the latest gadgets of course your kids will expect and want them. We live modestly with older cars, don't flip our gadgets that often and a small house. Most stuff gets bought on clearance or sale. We clip coupons (don't necessarily need to by why spend the extra money when we don't need to when there is better use for it).

I don't agree with kids paying for college. I think they should work summers and use that money to contribute to college but its a bit extreme to make them pay for applications and college. Paying for education is our responsibility to give them a good start to life.

[Anonymous]

I am not sure exactly what we did, but both kids seem to have an appreciation for the value of money and are privileged but not spoiled.

We required them to work for pay every summer in college (one is still in college), and do something productive in summers during high school (could be for pay or not - for example one did an unpaid summer internship on Capitol Hill).

We gave them an allowance in college but anything they wanted over that was/is from their own earnings.

We are not big into brands/designer stuff (except maybe for cars) and spend money on vacations but not on stuff. That seems to have rubbed off on them.

What we didn't do was require them to pay for college. I don't see the point of burdening them with debt when we can easily pay the tuition. Plus both my DH and I had our college educations paid for. They also both got cars in high school - but frankly that was more for my convenience than theirs - we needed a break from the driving to school, sports practice, etc.

One is now working in a good job and we still pay for a few things (health insurance because it is a family plan, car insurance, cell phone) but otherwise DC is on her own.

[Anonymous]

We talk a lot about want vs. need. When we're shopping we start in the sale section, because why bother paying full price when you don't need to.

When we're on vacation, we indulge a LOT. We give a low allowance but allow them to be hired to do sporadic jobs. DD13 gets $7 a week allowance, but is about to get mail and water plants for a neighbor for three weeks, and she'll get paid for that.

We talk out purchasing decisions out loud, so the kids can hear our logic.