Getting comfortable with money when you don't come from money

[Anonymous]

I guess I'm looking for similar experiences and what advice you would have for a mental switch, as well as how to raise kids who are aware of the value of money and spending it wisely.

Neither DH nor I came from money. We weren't poor, but our parents stressed about money and fought about it, we ate out on occasion but didn't order drinks or dessert, we took one vacation every 5 years, etc. Fast forward 30 years. We have been lucky and have worked hard, and now make and have more money than we ever thought we would. We're not VERY rich by DC standards, but, for example, we could buy a $3M home without straining our finances if we wanted. But I still find myself thinking and acting as if I had much less money, to the point when I fear I may be losing out on purchases that I actually want for the right reasons (e.g., a $3M house that I really love and that checks other reasonable criteria, except that I wish it didn't cost $3M) or wasting time when I could be spending a responsible amount of money at the problem (e.g., outsourcing some housework), and talking myself into being content with the compromises that I'm making, and that I ought to be making if I had less money, except I actually have more. Am I "missing out on life"? I know that I have to answer this question for myself eventually, but wonder what it has been like for you.

Also, our kids are still young, but they'll likely never see their parents stress about money the way DH and I did. How did you make sure that your kids understand that money doesn't come from nowhere?

[Anonymous]

You continue to act like you don't have money.

Also, it was not "right" that your parents "showed" stress about money. Clearly that gave you money issues.

Save, invest but don't spend like you just got $$$ to burn, weren't you taught the value of money.

The saying goes, "act like you've been here before".

[Anonymous]

OP, I think it's good to have your problems. Many newly affluent people have the opposite issues: they get on a never-ending spending spree and end up living above their means.

You have to give permission to yourself to enjoy life a bit more. And also to recognize the value of convenience, for example in terms of hiring a housekeeper.
(My husband and I recently had a similar issue: he booked a $70/night hotel two hours from where he needed to be because he did not want to spend $100 per night. To me, the gas + the fatigue from 4 hours of driving per day are clearly more "expensive" than the $30 difference.)

Regarding your children, you can raise them to value what they have for example by telling them stories of your childhood circumstances.

[Anonymous]

If you can buy a $3m home, buy a $1.5m home. Live well below your means. Don't fall into the DCUM mindset of a $1.5m home is slumming it.

[Anonymous]

Be sure your kids have summer jobs before they graduate from high school, the more "street level" the better. My kids are sick of hearing how I worked my ass off for ten cents an hour more than minimum wage when I was in my teens. I know the value of a dollar and respect those who do back-breaking work for a living.

[Anonymous]

I grew up similar to you OP, although money might have been a little tighter for us. Your last point is one that I've really struggled with now that DH and I are in a very different financial position than how I grew up. And the answer is, your kids will never appreciate it the way you do. They simply will not have the lived experience to really get how different it is for some people. That's not a bad thing, though, and it doesn't mean you can't instill an appreciation for working for what you have. For instance, our kids have a set allowance, and set weekly chores. When they want something bigger that we can afford as a family but that is more than their allowance, it isn't just given to them, but they are given an opportunity to earn it by doing additional household tasks (e.g., helping to repaint a room or doing extra yardwork). We make it uncomfortable enough to earn that extra money that they will really think about whether they want it, but not so onerous that they don't ever bother.

[Anonymous]

Anonymous wrote:If you can buy a $3m home, buy a $1.5m home. Live well below your means. Don't fall into the DCUM mindset of a $1.5m home is slumming it.

Depending on the location $1.5m really does not buy you very much, see Kalorama, Wesley Heights, Georgetown.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you can buy a $3m home, buy a $1.5m home. Live well below your means. Don't fall into the DCUM mindset of a $1.5m home is slumming it.

Depending on the location $1.5m really does not buy you very much, see Kalorama, Wesley Heights, Georgetown.

DP. Yes, if you pick the most expensive neighborhoods, $1.5 million doesn't get you as much. And yet you could live in a different neighborhood that is very nice and very convenient, and get much more for your $1.5 million. It all depends on your values and what you think is worth spending money on.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you can buy a $3m home, buy a $1.5m home. Live well below your means. Don't fall into the DCUM mindset of a $1.5m home is slumming it.

Depending on the location $1.5m really does not buy you very much, see Kalorama, Wesley Heights, Georgetown.

Let me rephrase. Don't fall into the DCUM mindset of a $1.5m home is slumming, or you have to live in only the hottest, most prestigious, and most expensive areas of DC.

[Anonymous]

I grew up the exact same as you. We certainly aren't rich right now, but have a HHI of $300k. We are both 30yo so definitely have quite a few career moves to make still hopefully. We have an infant and a toddler.

Things that will never change-
-I refuse to pay for daycare. I only work 20hrs per week and flex it to when the kids are napping/weekends/evenings.
-My kids only wear hand-me-down or used clothes/shoes/coats.
-90% of our toys are also used or hand-me-downs.
-We eat out once per week and I've never increased our grocery budget ($125/week). I refuse to bleed money on food.
-I will always use my coupons.
-We will always have safe, reliable vehicles but nothing luxury or over the top expensive and DH handles all the maintenance himself- oil changes, spark plugs, brakes, etc

[Anonymous]

Anonymous wrote:I grew up the exact same as you. We certainly aren't rich right now, but have a HHI of $300k. We are both 30yo so definitely have quite a few career moves to make still hopefully. We have an infant and a toddler.

Things that will never change-
-I refuse to pay for daycare. I only work 20hrs per week and flex it to when the kids are napping/weekends/evenings.
-My kids only wear hand-me-down or used clothes/shoes/coats.
-90% of our toys are also used or hand-me-downs.
-We eat out once per week and I've never increased our grocery budget ($125/week). I refuse to bleed money on food.
-I will always use my coupons.
-We will always have safe, reliable vehicles but nothing luxury or over the top expensive and DH handles all the maintenance himself- oil changes, spark plugs, brakes, etc

Adding the one thing i WILL definitely give my children that I didn't have is the opportunity to travel.

[Anonymous]

I grew up more poor and am now less rich than you, but I understand where you’re coming from. What has helped me a lot was really evaluating what makes me feel financially secure. 6 months of savings (even though we have secure gov’t jobs), maxing out retirement, making sizable 529 contributions. These are my financial non-negotiables. Then, I look at my major expenses like a housing, transportation, and education and aim to make those expenses as financially flexible as possible. We bought a very conservatively priced home compared to our income because when it came time to buy, I wasn’t loving my job and I didn’t want to be locked in to a job I didn’t like just to pay my bills. We can afford our home if I take a job making half my salary. These two approaches - saving is non-negotiable and it happens first and being very mindful of big purchases - has taken so much money anxiety off the table. I dont have to nitpick the money that’s left over. It’s incredibly freeing. It’s not unfettered consumption, but it is with the knowledge that these day to day expenditures aren’t threatening my financial safety.

[Anonymous]

MAKE A BUDGET! Include line items in the budget for "play money" or cleaning ladies, or surprise treats for the kids, etc.

And teach your kids by NOT giving them everything they want. My kids have heard me say "I like this, but I don't like it worth $60." Or "Let's come back when this is on sale." I give them opportunities to work in order to earn money. They have to save for things they want.

[Anonymous]

My wife and I just talked about this the other day on a long car ride. We grew up poor and I struggled more with early adult finances because I was on my own before I turned 18. We now have a HHI of over $450k. But you would never know it. We still buy our clothes at Walmart or on sale at Macy’s. We stay at Red Roof Inn level of hotels. We live in the first house we bought when we decided to have kids. We spend $2600 annually on outsourcing our cleaning and that’s the extent of our outsourcing. We only buy used cars.

Things we splurged on: travel experiences (though we do it cheaply by camping, staying with family and staying in cheap hotels and buying sandwich food instead of eating out; mental health care for one of our kids that has serious issues and there is no expense spared there; regular dinners out but inexpensive ones; kids’ activities; gifts that make our family feel special (but that isnt a big budget line item - it’s just that spending a few hundred dollars on a gift feels expensive ); a $3600 annual family gym membership; and a second home (annual cost of which is 1/3 of what our daycare bill was back when we had a daycare bill). We also have Amazon Prime which allows us to get dog food delivered and that feels so decadent.

I know having a second home is a big deal but people over estimate the cost. Our major expenditure that only people with resources can afford is the mental healthcare for our child. We are so grateful for this privilege.

My kids who are of driving age bought their own cars - we don’t give our kids cars. My kids who are of working age all have jobs.

My wife’s sister is the same - significant HHI after both she and her husband growing up poor and still live way below their means.

[Anonymous]

Anonymous wrote:I guess I'm looking for similar experiences and what advice you would have for a mental switch, as well as how to raise kids who are aware of the value of money and spending it wisely.

Neither DH nor I came from money. We weren't poor, but our parents stressed about money and fought about it, we ate out on occasion but didn't order drinks or dessert, we took one vacation every 5 years, etc. Fast forward 30 years. We have been lucky and have worked hard, and now make and have more money than we ever thought we would. We're not VERY rich by DC standards, but, for example, we could buy a $3M home without straining our finances if we wanted. But I still find myself thinking and acting as if I had much less money, to the point when I fear I may be losing out on purchases that I actually want for the right reasons (e.g., a $3M house that I really love and that checks other reasonable criteria, except that I wish it didn't cost $3M) or wasting time when I could be spending a responsible amount of money at the problem (e.g., outsourcing some housework), and talking myself into being content with the compromises that I'm making, and that I ought to be making if I had less money, except I actually have more. Am I "missing out on life"? I know that I have to answer this question for myself eventually, but wonder what it has been like for you.

Also, our kids are still young, but they'll likely never see their parents stress about money the way DH and I did. How did you make sure that your kids understand that money doesn't come from nowhere?

You are very very very very rich.