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

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][b]I think all of the people posting that they act like they have less money than they have or hope their kids don't realize that they are rich don't make any sense. [/b]

I grew up very comfortably UMC (7 figure HHI), and DH and I are now UMC as well though probably earn slightly less than my parents did at our age ($600K HHI).  My parents, both MDs, were very conscious of the value of a dollar but did not attempt to hide from us that they were well off.  We were not allowed to just buy whatever we wanted (nor did they), but the reasoning they gave was never, "We can't afford it."

When we were young children, it was just clear to us that there were limits on how much stuff we could have/buy.  It never would have occurred to me to wonder why I couldn't have a new toy every time we went to the store or whatever, it was just what we did.  My parents also didn't just get new things all the time for no reason...and I also never felt deprived.  When we were older, they were more explicit in saying that things weren't worth the price etc.  It was also apparent to me by then that my parents were wealthier than some of their friends (they had 2 incomes and most of their friends had 1), but we were actually less indulged/spoiled than many of their friends.  It's funny because my mom did always spend on high quality necessities, like expensive clothes always bought on sale.  But we were not just given silly things we didn't need willy-nilly.

There are many oddities around how my parents handled money, but I think the idea of being upfront that they were choosing not to spend money that they had was valuable.  When I was a grad student living on a $18K/yr stipend in an expensive city, I didn't find it difficult to manage my money and live on beans-and-rice without going into debt.  By contrast, a couple of friends who grew up with parents who were forever using expense as an excuse not to do things (even when it was clear they could afford it), ended up in debt very quickly after graduating college.

If you are affluent, there is a decent chance your kids will end up that way too.  The best gift you can give them is that whether you are able to afford something should not be the motivating factor of how you make spending decisions.[/quote]

I think that's easier to do when you have younger kids.  Once they reach a certain age the jig is up, you know?

Our kids grew up visiting DH's parents mansion in Connecticut, their beach house in the Hamptons, their condo in Park City, UT.  But they didn't really understand the concept of money until they were around 8.  Until then, $1 was a TON of money to them and they considered themselves to be "rich."  It was when they started learning about money in school that things started clicking for them.  We never tried to hide it, but didn't make a big deal out of it, either.  We explained that money is a personal and sensitive subject that you don't talk about with others.

[b]Most of my kid's friends are form HHI families.[/b]  Some have budgets and some get whatever they want when they ask for it, or have access to a parent's credit card.  My oldest has one of my credit cards that she can use for gas and that's it.  She knows I check the statement and would call her out on an other purchases.  DH and I both agreed that we did't want to raise entitled little shits.  We did a combination of his upbringing of getting an allowance and having to manage that and my upbringing of only getting gifts on certain holidays.

I have some friends who will not be paying for their kid's college education because they want to make them earn it.  DH and I don't believe in that and are paying regardless of what path they choose to study.  DH had his education paid for and mine was financed through scholarships and loans I took out.  Our HHI means that our kids will get very little financial aid; they may score some scholarships, but that's even doubtful.  I don't understand the parents who can pay for their kid's college but refuse.  Why straddle them with unnecessary debt so early on?!

[/quote]

Most people are from "HHI families," fwiw.[/quote]

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