209 comments

The Incomparable Advantage of Having to Work for what you Get

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“Early Retirement? But what about paying for your kids’ educations?”

“I could never match your low spending – I’ve got two teenagers in the house, and that means two more cell phone plans, two more car insurance premiums, and a heck of a lot of clothes.”

“I call myself “Mom’s Taxi”, because most of the driving I do is shuttling my kids around town to their activities”.

“I don’t want to retire with just enough money for myself – I want to leave something for my kids!”

“I’d be close to financial independence now – if I didn’t have two daughters getting married next year with weddings at $35,000 a pop!”.

“This year, we decided to really go all-out on Christmas, so we spent about $3,000 on gifts.”

 

It’s all noble and generous-sounding on the surface. As a parent, you want to give your kids all the advantages you didn’t have when growing up yourself. You earn much more than your parents did at this age, and so it is appropriate for a person of your economic standing to splash it out onto your offspring. Isn’t it?

The only thing is, in most cases you’re creating a double whammy of wrongness. Wrong because you’re spending more money than necessary, which means incurring more debt, working longer, and having less time to live your own life. And more importantly, you are probably programming your kids to expect handouts, and displacing their own healthy learning, effort, and growth with the leather-upholstered La-Z-Boy of your easy flowing cash.

Once again, my odd upbringing in another country is what allows me to bring you this new perspective. Although it may be hard to imagine for members of the wealthy middle-class of the United States to believe, it is not actually necessary to fund the lifestyles of your children, once they stop being children.

Let’s use a bit of Money Mustache history as an example. I’ve got two older sisters and a younger brother. As was prone to happen in the 1960s, our parents started the family far too young, and with far too little money to comfortably handle so many offspring. Over time, a spartan lifestyle and increasing income allowed them to get ahead of the curve eventually, but the frugal habits never left them – and still haven’t to this day.

As a result, we kids never experienced the fabled lifetime shower of parental handouts. We each got a bedroom and some great home cooking every day, but beyond that, the financial benefits thinned. A $1.00 per week allowance could be extracted if you handled the household trash-hauling. $5 was on tap for anyone willing to cut the 1/2 acre lawn. Getting places by car was something you could do once you turned 16, funded your own insurance and gas, and asked politely to borrow the minivan. Although mobile phones were not yet invented, good video games were just coming to market, and I’ll let you guess who was expected to pay for those. And a university education, while it was understood that you would want to get yourself one, was something you work for several years to save for, so you could get through the first year in order to resume working to pay for the second. Parental assistance was provided, but it was just enough to boost your own savings to the level required for a debt-free education.

Fashionable clothes in high school? Easily handled with the generous pay from your part-time job at the convenience store. Beer and other party supplies? Likewise. Restaurants and coffee shops? Dream on, those are for adults with real jobs. Plane tickets to Daytona Beach for spring break or Amsterdam for a summer of backpacking? An ideal thing to save for, perhaps in a few years once you are financially independent!

And as for the concept of inheritances and estates that are so popular with the rich: What a load of rubbish! By the time you die, your kids will be out prospering on their own. What good will extra money do them, when they have already figured out how to earn it for themselves? And why would you want to deny your grandchildren the opportunity to learn the same thing?

If you could go back to the early ’90s and ask Teen Money Mustache if he would like any of those perks, his eyes would glaze over at the possibility and he would suddenly be overcome with jealousy and desire. But if you ask me right now if I wish I had received such pampering, you already know the answer: “Hell no!”. I’m eternally grateful for every bit of hard work I have had the privilege of doing in my life so far.

Thank goodness for that job working at the gas station in the dead of winter. Without that, I never would have known how great every subsequent job was. And thank you for the completely barebones life I lived all through university, for without that I would never appreciate how incredibly luxurious my family’s almost-$30,000-per-year  lifestyle is right now. And thanks, Mom and Dad, for ensuring that money was treated as a precious resource not to be wasted, for without that perspective I never would have learned to handle it properly, allowing me to save enough to retire from corporate work before starting my own family.

This is not to say that I’ve deluded myself into thinking I am some kind of superlative self-made man. I have had loads of advantages handed to me, including being born in a rich country, raised by the right parents and siblings, taught by the right teachers, and many other things.  There is plenty of good luck in my past, not the least of which is the luck of having parents which handed me fewer silver-plated luxuries than most other parents give their own kids.

What’s this? Am I saying that a disadvantage actually ends up being an advantage? I sure am.

Because of being raised in an environment where money was something that was never wasted, all four of the Money Mustache Siblings are responsible with the stuff now. I don’t think any one of us has ever run a credit card balance or financed a shiny new car. Everyone knows how to drive a manual transmission, use a table saw, give a good haircut, and set up a tent. And we’re no anomaly – this pattern is seen among children of frugal and non-materialistic parents around the world. It’s not a guaranteed recipe, but it’s great odds.

Meanwhile, the misguided use of pampering has the opposite effect. From my morose and spoiled first Trust Funder housemate in Boulder, through the bratty teens of reality TV shows and all the way up to the troublesome offspring of certain well-known billionaires, it is clear that money does not grease the way to a better upbringing for kids. While it is certainly possible for rich and highly generous parents to raise wonderful offspring, it is never the money that is creating the good character.

And this brings us to the second part of this equation. You.

If you are one of the 99% of people who is forced to live with only a finite amount of money, you should probably give some thought to how that money is spent. You can buy things, like cars and cell phone plans for your kids, or you can buy freedom, in the form of paying off your debts, saving most of what you earn, and soon being able to choose your own work schedule or even retire early.

When you become a parent, this kind of freedom takes on a far bigger meaning. Your children become the most important thing in your life, which means your job can no longer occupy this place. And that’s great, because with money worries out of the way, it no longer has to. Instead, you can start devoting mental energy to figuring out what kind of real advantages you can give those kids. Do you want to make their lives easier, and give them an early taste for as many material things as possible? Or do you want to do the opposite – putting a bit of challenge into each day, and teaching them that life is not about you and your stuff. It’s about you and the people around you, in the natural environment in which we all share.

My own son has learned that you generally don’t buy toys or presents – you make them*. TV is something people in previous generations used to watch – nowadays we have the unlimited book collection of the Library for entertainment. And getting to and from school is not something you’d use a car for – since you’re strong enough, you use your bike. In the dead of winter, you add a hat and gloves.  As he gets older, this old-fashioned education will expand to include how to take care of your health, how to build and care for things, and eventually how to become rich. I find it fascinating to watch my little boy as he grows up and figures things out for himself. Outside observers find it shocking to observe how rarely the spending of large sums of money is required in such an endeavor.

It takes more time to raise a kid this way, but that works out well, because more time is exactly what you get in exchange for showering them with less of your money.

Addendum on Education:

After publishing this, I can see that the comments are bringing up a discussion of whether or not it is helpful to pay for a child’s higher education. While everyone will make that decision for themselves, here are my thoughts on it:

Mrs. MM and I are more excited about supporting our son than anything else in life. We’ve got his back. So in the likely event that he chooses to get a university education and the unlikely event that he has not found ways to earn his own money in advance and/or get enough scholarships, we have the resources to pay whatever bills might come up.

The thing is, you don’t have to know this stuff in advance. First of all, university is far from being the only gateway to a successful and productive life. Second, the cost varies astronomically depending on how you approach it. And third, given the right opportunities and an entrepreneurial upbringing, it is entirely possible for kids in high school to earn five and six-figure incomes based on brilliant things they have come up with on their own.

As a parent, you don’t depend on  things like this to make ends meet. But you also don’t close the door on them by telling your kids, “You will go to university. It’s the only way to get a good job. We will pay for it, so there’s no need for you to think outside of the box. Just go study for your calculus test.”

If you teach your kids the true nature of society and life, there is no box.

 

*with the enormous loophole that certain toys come from grandparents – you gotta bend to reality at least a little bit, right?

  • Joanna @ Our Freaking Budget March 28, 2013, 11:01 pm

    I can see where you’re coming from with your argument. I know what it’s like to not be given a cent from parents. And since I’m only in my mid-twenties, the feeling is still pretty fresh in my mind. I don’t think giving your kids handouts is a good idea. But I think giving kids help when they’re trying their best should never be ruled out.

    There was no tradeoff for my parents not giving me money; I didn’t get more of their time. I guess my point is that witholding money from children doesn’t necessarily translate to more quality time. And vice versa.

    Reply
    • Mrs. Pop @ Planting Our Pennies March 29, 2013, 6:00 am

      Joanna, I think you make a really valid point. Less money spent on kids doesn’t mean more quality time with them. But when it does, I can see the very clear benefit of being hands-on in order to convey incredibly down-to-earth values.
      My parents gave me very little beyond ensuring I had access to the best public schools (for those in other countries, these are the free ones in the US!) in our city. I had to learn the city bus routes and street grids when I was in the 3rd grade in case I needed to get somewhere by myself – a ride from the mom taxi was not a guarantee. Chores were not subsidized and an allowance was a fiction – we were expected to contribute to the housework because we created the messes. I couldn’t believe it when my peers were getting paid for their grades in school. Earning anything below an A in my home was not an option – the only reward you got for an A was not getting punished. So yeah, I wasn’t given a whole lot monetarily. And the time I got in exchange was far from quality family bonding for the most part.
      What they did give me is a lifetime lesson in self-sufficiency. If I didn’t have someone else to fall back on if I screwed up, I had to make sure I did things right from the start.
      It wasn’t an easy childhood, but it sounds like MMM’s little guy has a very different atmosphere in his house than I did – but he’ll still walk away with the same lessons in self-sufficiency that I did. And he’ll probably have a wonderful relationship with mom and dad to boot. To me, it sounds like the best of both worlds.

      Reply
      • Johnny Moneyseed March 29, 2013, 6:13 am

        I had a mom taxi, and handouts from my parents. I ended up not having my financial house in order until my mid-20s. I don’t blame my parents for raising me wrong or anything (even though they would stick me in front of a TV or computer whenever possible). Instead of blaming them, I know I can use what I’ve learned over the past few years, especially through unconventional wisdom that you find on this site, to help my children prosper. So they don’t have to max out credit cards, and finance new cars that cost 2 entire years worth of pay.

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      • nunayo March 29, 2013, 8:28 am

        Yep, my upbringing also left me with the sense that I had no one to fall back on, so the only option was to “fend for yourself” which was the phrase mom used when she wasn’t going to be providing dinner. My older brother and I learned to cook for ourselves in elementary school. And I was working for my own clothes money by 11.

        The economic challenges of my childhood, namely having expenses at an age when hardly anyone would hire me for paid work, did prepare me for frugality later in life. However, my scope was limited in such a way that I thought making $30000 out of college was a lot. Only after readining ERE did I realize I need to make about twice that to be on the ERE path.

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        • SomeYoungGuy March 29, 2013, 12:59 pm

          So how do we reconcile the idea with our children between of ‘the value of a dollar’ with the idea that we retired early from a good paying job? Seriously, I struggle with leaving the golden handcuffs because the a majority of the non-American part of the world could only wish they had the job I would be leaving, and it seems incongruous to be frugal and non-income when you could also be whatever you wish (Bill Gates save the world) but maybe working a little too much…

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          • Sofie October 18, 2013, 2:41 pm

            Diminishing returns. Once you have enough you don’t need more, be that food, water, air or money.

            Working and giving it to charity would be great as well; you’re not working for yourself, but to improve others life.

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            • Edith October 18, 2013, 7:08 pm

              Depending. If you’re miserable working, of if you have to work for causes that are not aligned with your values (for example, being for health and working for Coca Cola), then working and giving everything to charity is not the best move.

              First of all, you will die younger if you are unhappy, and therefore, you won’t be able to help as long as if you were happy. Then, if you live off your interests only (or better yet, do as MMM and live with less than that and donate the rest), then you can donate the huge capital to a charity when you die. I think a big donation would allow a charity to invest and plan ahead better than just a small amount every month.

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    • Glen June 2, 2014, 5:14 am

      Joanna, I can empathize with you in believing they didn’t give you a cent. I used to believe my parents withheld good things from me – until I became a parent. Now I see their wisdom in allowing me the chance to become someone who solves his own problems. Your parents were too busy working to provide the basics, and the cents they were giving you were transformed into food, shelter, and their taxes went to your education. Parents must allow their children the opportunity to struggle because real life presents many, many struggles. Struggles and challenges result in growing stronger and free from a life of entitlement.

      Reply
  • Tyler Tervooren March 28, 2013, 11:14 pm

    Mr. MM, have you read “The Millionaire Next Door?” They do some pretty fascinating studies of children of the wealthy and which ones end up as strong, self-sufficient (and often wealthy) adults, and which ones still live at home with an allowance for chores at 40.

    You can guess how it pans out…

    Reply
    • Mr. Money Mustache March 29, 2013, 7:53 am

      Hey Mr. Advanced Riskology, nice to see you here!

      I sure did read the Millionaire Next Door – many years ago. It had a big impact on me, and I also got some good laughs from the quaint nature (it’s a little dated now).

      That was one of the first books I mentioned on this blog, waaay back when I first started it: http://www.mrmoneymustache.com/2011/05/14/weekend-edition-book-review-the-millionaire-next-door/

      Reply
      • Ambassador of Badassity March 30, 2013, 11:53 am

        Just read a wonderful book that speaks to your point MMM. The book is titled ” How will you measure your life” it’s is written by Clay Christensen a Harvard business professor. in the book he takes business theory used to explain why companies prosper or fail and applies those theories to everyday life. On the topic of children he offers the theory of resources,processes,and priorities. Resources being what you do something with, the process being how you do it, and the priorities being why you do it. Clay argues that families like companies fail because they focus to much on the resources. Parents give their children an abundance of resources thinking that will result in productive self sufficient children. The problem is that by not allowing the children to be challenged the children are not able to develop their own process. And with a lot of parents outsourcing activities when it comes time to explain the priorities or the why often it is someone else not the parent. In enssnece Clay suggest carefully thinking about what processes you want your children to develop and purposefully crafting experiences for me to learn them. More focus on the process and priorities then the resources. Awesome book right up your ally.

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  • Aaron March 28, 2013, 11:57 pm

    Makes me think of the book “The Price of Privilege: How Parental Pressure and Material Advantage Are Creating a Generation of Disconnected and Unhappy Kids”

    Reply
  • Cid March 29, 2013, 12:45 am

    I couldn’t agree more. I will point out, however, that this doesn’t just relate to money, but to every aspect of life. When kids are given things without having earned them, it causes them to expect those things, thus depriving them of the ability to learn from mistakes and often leading to an inability to deal with criticism in the real world.

    Here is an article that touches on that concept lightly (the formatting is awful, but the content is good) http://www.theatlantic.com/national/archive/2013/03/how-middle-school-failures-lead-to-medical-school-success/274163/

    Reply
  • My Financial Independence Journey March 29, 2013, 3:29 am

    If you have kids, I think you’re obligated to give them some number of “handouts.” Chief among that list would be support for higher education, since that’s the key to getting a descent job.

    I didn’t get very much from my parents outside of educational support (which wasn’t much as I already had a full scholarship). But my parent’s general cheapness didn’t make me a better person. If anything, it contributed to ostracism from my peers since I never had, or was always late in getting, the appropriate items to fit in.

    Reply
    • Lucas March 29, 2013, 4:59 am

      Since when has it been a good thing to fit in? I didn’t fit in in Highschool or College, and yes at the time maybe I wished I had more, while my brothers made every effort to do so. They are coming around to things, but I am substantially (10-15 years) ahead of them in financial situation now because I chose a different road. Even at the time I remember thinking how stupid it was that everyone was chasing clothes, cars, stupid drinking parties, etc. . to just fit in.

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      • My Financial Independence Journey March 29, 2013, 7:43 am

        Ostracism is very painful. I know this from firsthand experience and it is not something that I would wish or enforce on my children if I had any.

        Nor do I think that “fitting in” vs “financial responsibility” is an either or choice.

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        • Rob March 29, 2013, 10:05 am

          My Wife struggled with that, she grew up poor and her parents couldn’t afford anything nice, at 15 she got a job so she could afford to wear something other than 3 gen hand me downs.

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        • Grant April 2, 2013, 8:01 am

          Ostracism is not solved with money. What if it was quirky behaviour, or glasses, or interest in jazz music that caused your kid to be ostracised? Would that be fixed by buying them stuff?

          I can relate as I really did not fit in at school, and I did not have the tools to resolve the issues – I don’t think it was something my parents understood, and were not very capable of supporting me. These days there is a high focus on “bullying” (at least, here in Australia), and there are numerous strategies to address it. I don’t think the bulk of the literature being provided by the schools has all the answers, but it does give some direction. I also think it is largely pointless trying to eliminate bullying – the key is in empowering the kid, giving them the tools to be resilient, and some strategies to combat ostracism, bullying, clique-type scenarios… you know, life.

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      • Johnny @ Our Freaking Budget March 29, 2013, 8:20 am

        Choosing a life of not fitting in should be a decision a kid makes. Mom and dad can lead and guide by example, but a parent should not coerce a child into a lifestyle. Learning about the Joneses and how pointless it is to try to keep up with them is something they need to learn on their own, otherwise they’re just as blindly following you as those who follow what mass media and society spew out. That doesn’t mean you need to dole out dollars, but they should be entitled to choose how to manage and spend that dollar when they get it.

        It’s also easy for us as adults to look back and see how dumb some of those things were. That’s the beauty of maturity and learning from mistakes. But one or two adolescent mistakes does not a poor money manager make.

        Reply
    • TicoHombre @ Pay Off My Rentals March 29, 2013, 6:00 am

      I don’t know where it’s written that parents owe their children a college education. By the time they reach their 18th birthday, they are adults and if raised right, they should be able to finance their own college education if they choose that route. Ivy league is not a necessary requisite for success either. If parents follow the path of MMM, they will have raised self-sufficient children capable of financing their own higher education.

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      • My Financial Independence Journey March 29, 2013, 7:48 am

        You don’t HAVE to pay for your kid’s college education. But assuming that your kids are mature enough to make it through college, you SHOULD (my opinion) pay. A college education may not be a necessity for success but it is a huge advantage and is becoming more and more the “union card” to get into any kind of what collar creative class job.

        I just can’t see the point in raising a kid and then not following through to make sure that they have every advantage to be successful in the future.

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        • Mr. Money Mustache March 29, 2013, 8:58 am

          I can imagine a good amount of debate on the “pay for college” issue. I added a few thoughts to the bottom of the article in reponse.

          I didn’t mean to sound like a hardass who will not help my son out whenever he truly needs it – and I do value education as much as anyone.

          Just wanted to challenge the assumption that parents should automatically expect to pay for it in full because kids are automatically incapable. That can be a self-fulfilling assumption.

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          • Dan March 29, 2013, 2:59 pm

            MMM, just wanted to throw my support behind your comments. My college education was mostly paid for by my parents (I did take the full amount of subsidized loans and paid them off almost immediately) but I’d like to think it wouldn’t have been an issue for me to fully pay my own way. Instead, it just gave me a head-start on my savings. I’ve ended up paying for my wife’s undergrad and two trips to grad school as well.

            I also come from the unique position of having lived at just about every income level. I was raised in a very poor urban environment and my parents eventually worked their way up to a comfortable upper-middle class existence. They both come from poor families and are bad with money to this day.

            I got to see the mistakes they’ve made and while I earn a very good living, I tend to be frugal, savings-oriented and highly opposed to taking on debt. So it’s possible for children to be raised in an environment of rampant consumerism without being indoctrinated. It’s also possible to help with your kids’ college without it making them whiny brats too (at least in the long run!).

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          • BadAss CPA April 4, 2013, 10:42 am

            I’ve always been debt averse and probably would not have gotten my masters degree if my parents hadn’t paid for it.

            Turned out to be my best move career-wise and I will thank them forever for it. Not just the money, but for pushing me not to settle.

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    • rjack (Mr. Asset Allocation) March 29, 2013, 6:18 am

      I agree about giving your children some education funding. I have the interesting perspective of how my parents treated me and how I treated my two adult sons regarding education.

      My parents funded 100% of my education in both undergraduate and graduate school. They were depression-era children so in all other ways they really emphasized frugality – all my clothes came from Sears, my Dad would take vacation and then spend it painting the house, my mother reused tea bags, etc.

      With my sons, I saved enough money to pay for an in-state college education for each one. During the early part of high school, I told each of one that he had a $100K college budget. If he spent more than that, then he needed to make money or take out loans. But, if he spent less than that, he could keep the difference. Both sons then proceeded to amaze me with high high-school grades, lots of AP courses, high test scores, and ultimately partial college scholarships. My eldest son came out even at the end of college, but my youngest son got an Army ROTC scholarship and now I’m going to owe him $40K when he is done. I consider it money well spent.

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      • Eric Hansen March 29, 2013, 7:43 am

        Wow, $100k per child, that’s very generous. I’m 33 with no children, but I do have a 3 year old niece and I’ve started contributing to her 529 plan. It was a tough decision for me because who knows what higher education will look like in 15 years? For my career in film production, a classic university education was almost unnecessary. I’ve gotten everywhere on my experience, not my formal education. I’m incredibly happy I went to a state school and only incurred $10k in student loans. I run into successful people in my industry with no higher education all the time. My two current bosses have maybe 6 months of college between them and they’re two of the smartest people I know. My worry is that a university-level education will be so expensive that she won’t be able to go without financial help. But at the same time, online education is becoming more prevalent and the university system might have imploded by the time she’s 18. Who knows?

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      • Jacob@CashCowCouple March 29, 2013, 7:51 am

        I think that’s a great idea if you are going to fund their education (although 100k seems super high to me).

        My parents always offered some assistance for education, but I always worked hard for scholarships and minimized what they had to pay.

        If I’m able, I would like to help me kids in any way that I can. Hopefully I can help them and be financially independent at the same time…

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        • rjack (Mr. Asset Allocation) March 29, 2013, 12:33 pm

          Unfortunately, $100K is about what is needed for in-state tuition in Pennsylvania. Penn. is not very cheap. Of course, you could do community college for a year or two and then transfer – that would save some money.

          Other states are significantly cheaper. If you have lots of children in middle-school or beyond and it’s possible to move, then it may make sense to consider moving to a state with cheaper tuition.

          My eldest son applied to private schools (NYU, University of Miami, UC Berkeley). He got into them all, but only got a scholarship to Miami. I couldn’t figure out why he was choosing those schools at the time, but it all made sense later when he told us he was gay (all the schools he applied to are gay friendly).

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      • chubblywubbly March 29, 2013, 8:39 am

        That is a great idea. I’ll be sure to do it for my kids if I have any in the future.

        It is a great motivator and something I would have loved had my parents given me the choice.

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      • Chris March 29, 2013, 10:23 am

        Great idea rjack, looks like it worked!

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      • TOM March 29, 2013, 12:11 pm

        Awesome story!

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      • Erica / Northwest Edible Life March 29, 2013, 8:44 pm

        I love this and we are doing something similar. While I agree with the tenor of this MMM article, I was given the huge advantage of college-degree-without-college-debt by my parents, and my assumption has always been that I “owe forward” to my kids to provide them the same.

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        • Mr. Money Mustache March 29, 2013, 10:41 pm

          I definitely agree with both of you on the debt issue – if there’s a choice between me paying for the education, and little MM having to borrow from a bank, I will gladly pay whatever is needed.

          It’s just that with the philosophy of this article, I feel you keep more alternatives open: you might be able to pay for school yourself. You might do some work on minimizing the cost of going to school.

          The defeatist attitude most people have now of “Education Automatically Equals Big Student Loans” is dangerous. It causes people to overspend because they assume they’ve already lost the battle. How many people on student loans drive around in unnecessary automobiles and eat out every week at coffee shops and restaurants, for example?”

          You gotta fight the loans by pretending the only option is funding everything yourself, debt-free. Then when you later admit that you come from a Mustachian family who can easily afford the tuition, it’s just a bonus.

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          • JJDsMom June 26, 2014, 4:07 pm

            We aren’t saving anything extra in an education-related fund for our kids. We are maxing out what we save for our retirement and will most likely be able to help them if they need it. I put myself through school and I think my kids should be able to do so as well. I am watching my nieces and nephews go into debt at a My husband has a different outlook. But he is looking at switching to a job at a local college so kids where employee’s children can attend tuition free (community college level). He figures this will gives them an associates or certificate, or some kind of marketable skill. Now he just needs to get them to hire him! We still have a few years of saving ahead of us and our kids are in elementary school – but it’s a solution I could live with.

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    • zhelud March 29, 2013, 6:41 am

      I also agree that parents should make every attempt to save money for their kids’ college educations.

      Growing up, I knew that my parents placed a high value on education. I knew that my parents were saving for my college education, I knew that they expected me to attend college, and I knew that my main “job” was to study hard in school in preparation for that. My parents had good incomes but we didn’t have the lifestyle we could have had because their priority was college saving. They were able to pay for both my sister and me to attend “top” colleges without any loans at all. I will always be grateful for that, as I was able to start my adult life debt-free.

      Now my husband and I are doing the same thing for our kids. They know that school is their “job,” and that they will go to college.

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    • Anonymous March 29, 2013, 8:12 am

      What happened to scholarships? If you raised your kids to be responsible adults, they should be able to get their own scholarship. I don’t think there is an excuse to NOT get a full-ride, whether academic or sports-based. Hell, my university paid me (I got spending money that I saved, bought and sold used books even when given a stipend for new books, found cheaper housing than my rental stipend, cooked, etc.) to go there. If they aren’t “smart” enough (based on test-taking ability) to get a scholarship, are they the right type of person to go to college anyways (where all they take are tests)? There are many successful people who don’t go to college. Food for thought.

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      • Betsy March 29, 2013, 8:34 am

        Urgh – and there’s many successful people who pay their bills and save a lot of money via full-time jobs that they never would have gotten if they hadn’t gone to college.

        I test spectacularly well and did manage to pull off a full ride to college…but I’m not silly enough to think that testing ability = intelligence = success in life. There’s a LOT more to life than that – and standardized tests capture only a minute portion of it.

        Reply
        • Anonymous March 29, 2013, 9:41 am

          That is exactly why I said that our society’s way to measure intelligence is usually based on test performance. That is why I mentioned that there are successful people who don’t test well or didn’t go to college. If they don’t test well, are they going to do well in college? Is it worth the money if they don’t get a full-ride? Would they be better off saving that money and being ahead in a career that doesn’t necessarily need a college education? Or what about starting their own business? How many young people do you read about with a successful start-up that began in their garage? Some people aren’t meant for college and some jobs don’t require a degree. How many people do you know with a degree that has nothing to do with their current line of work?

          Reply
      • kit April 1, 2013, 4:39 am

        One of the things that makes it difficult to get scholarships is that so many of them have a needs statement as part of the application. If your parents are doing well, then it will show up on the FAFSA-like statement you have to submit that factors into their decisions. A large number of scholarships specify that the recipient has to be disadvantaged in some way in order to qualify.

        This isn’t the very top tier of scholarships like the Intel talent search, but expecting someone to be able to qualify for something of that level in order to go to college is a little harsh.

        Since I went to college early, my mother always knew she had me by the threat of withdrawing her support. No one around campus would take the risk of hiring an under-18 if they had so many other qualified applicants and the plum on-campus work study jobs required being on financial aid.

        I did get scholarships to one university that I chose not to attend because they didn’t offer my major choice- to the tune of $2500/year. It’s more than nothing but it just missed covering tuition for one semester, much less fees, books, or living expenses.

        I guess I wasn’t smart enough to get scholarships. I only had a 1580 on the SAT (back in the old days where 1600 was the max) and I went to college at 14 and was taking differential equations at 16. I also wasn’t smart enough to do what my friends did and make up charity work they didn’t do, hide a high earning parent by submitting a financial statement using a non-custodial parent’s minimum wage job, or say I was Hispanic because “my great-grandfather came from Spain!”. I’m going to go pound rocks now.

        Reply
      • Megan May 12, 2014, 5:37 pm

        That seems like a fairly optimistic/naive position to take. I got a full scholarship to my junior college and was “making” about $500 a semester after the scholarship paid for my tuition, books, and parking pass. However, then I transferred to UC Berkeley where I sure as heck wasn’t getting paid to go to school. I did successfully graduate with a degree in engineering and have been (very fortunately) gainfully employed every since. I don’t think I was any smarter or more deserving of a good education while going to the JC than Cal even though in one scenario I was making $ on the deal and in the other I was shelling out good bucks to go there. I also went on to do a master’s in engineering at Stanford, so I personally would prickle at the suggestion that I wasn’t “smart” enough for college since I didn’t qualify for test-based full scholarships.

        There is a lot more to a college education than taking a bunch of tests; I am sorry if your experience left you with a different impression. When I first transferred to Cal they told me that my college education was about “teaching me to problem solve”. At the time I thought it was a hopelessly cheesy expression. In time, I realized that it was spot on. I don’t know everything, in fact, I don’t know much. But I do know where to find information and how to approach problems, and that has served me very well so far in life.

        Reply
    • Kenoryn March 29, 2013, 2:04 pm

      I found myself a group of friends in high school that didn’t require me to own certain objects in order to accept me. Boy, that would be awful to have people like that as your only friends (if you can call them friends). Nevertheless I was able to wear average clothing and pay for occasional outings with friends by babysitting and later working and taking advantage of the magical world of secondhand goods. I can’t think of any basic necessity for ‘fitting in’ that would be so expensive that it could not be had by someone with a part-time minimum wage job and zero other expenses.

      Reply
  • Mike March 29, 2013, 4:52 am

    Our kids have been spoiled with things. So have we. We’re working on fixing this in our own lives and are getting there.

    This is the sort of post I email to my wife for discussion.

    Reply
    • One Day At A Time March 29, 2013, 4:13 pm

      I agree – this is the sort of post I email to my husband to start conversations. Though truth be told, I’m the one making the purchases for my son. Luckily he is only 3 and I have plenty of time to change my ways.

      Reply
  • JC March 29, 2013, 5:14 am

    I’m grateful to have parents who taught me the value of money. Even though they were really well off, they made me work for what I wanted. Values were assigned to various chores and I could earn an unlimited amount of money by doing as much work around the house as I wanted. If I wanted some expensive brand name jeans, mom would pay for half after I saved up half. For college, they paid for room and board at an in state college, but I was responsible for tuition.

    I’m trying to raise my daughter this way as well. I fear though that someday she will resent me for not giving her what all her friends have, or not paying for the $35k wedding. Anyone have any thoughts on that? Hopefully one day she will realize it was best.

    Reply
    • Isa July 4, 2014, 5:12 am

      She WILL realize it was best. I’ve never known anyone who was raised properly who resents her parents for that. No one. Everyone who has been raised with a bit of self-discipline always says the same “When I was a child and my friends had doughnuts and chips for brunch, but I had sandwiches or fruit, I used to feel bad. No I see my body and I see theirs and I can only thank my parents for how they raised me”. “When I was a teen I didn’t want to study or work hard, and I protested because other kids had things for free. Now in hindsight, I am so glad my parents raised me that way…” “When I was a child and teenager I used to hate playing the violin, but now I see it was incredibly useful to develop my self-discipline, now I am ready to tackle any trouble I might find…”
      No one ever complains about their parents instilling self-discipline in them, whether it’s in dietary choices, educational choices, or other activities. Of course, it takes years for them to realize how good their parents were. But eventually, all of them do, and all of them are happy about it.

      Reply
  • Stephen at SE March 29, 2013, 5:34 am

    I grew up in the in between. My parents were older than most of my peers and pretty wise with money when they had a lot and when they didn’t. Looking back, we had a lot of “handouts” but it affected each of my siblings in different ways. I tended to see the gifts as awesome but a great way to leverage the advantages I already had. For example, my parents paying for most of college meant all the scholarships I got and job I had allowed me to make and save a ton of money while I was in school.

    Now that we have had our first child it makes it much easier to see this type of behavior around us and many of our friends have fallen into the “our kids need everything” trap. I like the idea of having time with my kids to teach them how to be self sufficient.

    And lastly, when you don’t have to ‘save’ for all the luxurious upper middle class handouts, it makes the prospect of financial freedom or early retirement much more obtainable.

    Reply
  • Johnny Moneyseed March 29, 2013, 6:09 am

    I totally agree MMM. I wouldn’t say that we made a mistake in having our daughters as young as we did, but I can see the advantages of waiting. $1100 we would have saved every month on child care costs. We probably could have saved ever more if we had gone the cloth diaper route.

    We have been saving for our kids’ education since they were born, but we opted not to use any type of college savings account, and instead just used an index mutual fund. That way, we can make the determination down the road whether to help or not. We will never give our kids that guarantee that “Mommy and Daddy are paying for school, so don’t you worry”. Hello no. I want them to strive for greatness. I want them to work for their education, and I want them to work through their education.

    The biggest thing I’ve done to help my daughters since they were born was to remove cable TV from my house. I would like to think that I’m saving my them from becoming brain-dead marketing targets with a bullseye on their foreheads. They may not understand when they’re young, but they’re definitely affected.

    Reply
    • vij July 14, 2013, 1:02 pm

      I totally agree with you on removing the cable TV. I have no cable TV. But the problem that is arising with it is an embarassing one. Lot of relatives live around our area including pampering Grand parents. Visiting them is just so miserable. They just behave like its been ages since they saw a cable channel. And they visit them frequently. I am not able to control this situation.

      Reply
      • Megan May 12, 2014, 5:44 pm

        You know, I’d advise you to just be strong and stick with your position. My parents started out with no television in the house, and then when they finally got one, we were only allowed to watch Mr. Roger’s neighborhood. No channel surfing, no commercials, nothing. We also didn’t have candy or sodas in the house.

        When we went over to friends houses we certainly glutted on television and though a whole soda for one kid was such a treat. We went through a later phase where my sister and I would rot in front of the television every day after school until our parents came home from work.

        In the long run though, we don’t have television, barely watch movies, and neither of us have the slightest interest in soda and really never have. I think the habits set early in life make a strong impression, even if you go through periods of trying out the opposite.

        Reply
  • Juan de Bigote March 29, 2013, 6:15 am

    My parents definitely over compensated for the lack of financial support they received as kids from their parents. My dad also made a lot more money than either of my grandparents and he doled it out freely to my siblings and I even to the point of incurring a large amount of debt (even with a huge salary!)

    Same with my wife’s family. So…with a family of high spenders, come Christmas time, $100 gifts are common place for each family member. We love to be generous and give good gifts to people, but spending $1000 each Christmas on our brother’s, sister’s, and parents (not even any kids) is excessive.

    How do we break that cycle of wasteful gift giving??? We still want to be generous, but not just giving $100 gifts because it’s expected.

    Reply
  • butterandjelly March 29, 2013, 6:22 am

    100% agreement from me! Unfortunately, not so much from my partner and they’re his kids so financial independence is delayed due to his commitments to them. Frustrating but aside from leaving (which I won’t), what can you do aside from trying to lead by example?

    Reply
  • CashRebel March 29, 2013, 6:30 am

    The argument that always confuses me is, if you retire early, how will you pay for your kids college??? It sounds like you’ve decided that he’s going to pay for his own college, but let’s say you wanted to make it your burden (Even thought that wouldn’t be super mustachian). All you’d have to do is work a year or two more, until you’re 36 instead of 35 and keep that year’s salary in a college savings account. Since it’s got 18 yr to grow, kablam, you’re done.

    Reply
    • Jacob@CashCowCouple March 29, 2013, 7:55 am

      I think that the options would be:
      1. Build enough passive wealth to offer some assistance without working
      2. Continue working
      3. You don’t help at all.

      Reply
    • Retire in Style March 29, 2013, 12:55 pm

      The somewhat ironic thing is that people who are able to attain MMM-level spending discipline (I’ll admit that I’m no where near that level) could manage to send their child to a $50K per year school and not have to shell out all that much money to do it.

      There are various methodologies that colleges and the government use for calculating the EFC (Expected Family Contribution) but many of them ignore your primary home equity as well as your IRA/401K balances. If a family is able to sustain a $30K expense lifestyle on $50K-$60K of income and the family has been able to build a large balance in their retirement accounts, a very sizeable chunk of a $200K tuition bill may be covered by a combination of the government or the college.

      Reply
      • Kenoryn March 29, 2013, 2:10 pm

        Or, go to university in Canada! My tuition was $5000/year, and I think for international students it’s only a few times that much, $15,000 or so. College is even cheaper. Then your kids get to study in an exotic foreign country, too. ;)

        Reply
        • Gerard March 30, 2013, 6:53 am

          Pick your Canadian school carefully and you could pay even less! My (fairly decent) uni charges international undergrads $8800 a year, but grad students pay only $630 to $950 a semester. Our government has committed to a tuition freeze since 1989.

          Reply
      • BadAss CPA April 4, 2013, 10:55 am

        Daughter is currently 6 months old and I will retire before she starts high school (if not sooner), so on our tax returns we will show very little income. Currently we are maxing out three 401k-type plans plus two Roth IRA’s so we’re not in a rush to pay down the mortgage (it’s cheap money at just over 3%). When it’s time to apply for financial aid, we’ll take any extra cash and pay it down. So in effect we’ll show little income and virtually no assets.

        Or I could just get a part-time working at her school which would qualify for free tuition. The main idea is that being “retired” provides a huge amount of flexibility.

        Reply
  • Colleen March 29, 2013, 6:50 am

    This article doesn’t have anything to do with ‘cheapness’ as myfijourney referred to in his comment above. Though I see how kids could perceive this if they just see their parents ‘withholding’ money without understanding an overall philosophy behind it.

    It’s about teaching them what’s important in life. And about the importance of having to work for things.

    We have three kids, ages 12, 10 and 5. Although we didn’t embrace simplicity as much as we could have, I certainly see the benefits of what we did.

    Aside from the five year old, my kids understand that we can have anything we want, we just can’t have it all at once. So if they really ‘want’ something and they are willing to give up other things (like a family trip somewhere or some of their own savings), then it must be important to them. They don’t often make this exchange. Otherwise they can keep it in mind for Christmas. We’re optimistic the five year old will get to this point as well. He asks for things frequently, ‘when can I get another [insert toy here]‘… Out of those dozens of things, he’ll remember to ask for a few when his birthday comes up.

    Because they don’t see commercials and much other advertising, my two older girls can’t give us any help in Christmas or birthday gift ideas. When it’s time for some growth spurt clothes shopping, I often get ‘no, I don’t need another sweater’.

    All that said, a couple of years ago in grade 3 my middle child asked when could she get a cell phone! I was surprised and dubious to hear kids in her class had them. Crazy! What exactly would you do with that? Phone my friends. Perhaps I said ‘absolutely not’. But I also explained the ongoing monthly cost of this gadget that she would have to take on. And pointed out we had a perfectly useable phone at home. I’m confident she happily thinks its absurd for a young child to have a cell phone.

    In hindsight I wish we had the ‘make your gifts’ idea as well. Starting now would be difficult. As adults, we don’t exchange material gifts much anymore. Fortunately the kids love making or growing us things and I don’t see any preference for buying something.

    We have birthday parties for the kids. I wish I’d done that the Mr MM way as well – a chance for kids to eat and run around together, no need to RSVP.

    We gave the kids the option of having unlimited guests with a no gift policy or they could have four guests if they couldn’t pass on the gifts. This has backfired a bit. Our oldest always chose the no gift route. But some parents still felt compelled to send a gift (bags of candy even).

    And the middle child struggles with her decision, eventually giving in to no gifts because she can’t whittle the list of guests down.

    Mr MM, as usual this was a great post!

    Reply
  • spider1204 March 29, 2013, 6:53 am

    I still remember spending months saving up enough money to buy a used SNES for $25 as a kid. This involved riding my bike to the corner store to buy the newspaper for my dad and getting to save the change, helping my mom sell drinks at her tag sale, and rolling up coins for my uncles. Definitely much more rewarding to finally buy it myself, even though many peers were just starting to get brand new N64s for their birthdays. They even bent the rules a little bit and bought me some used games upon finally making the purchase.

    Reply
    • Rob March 29, 2013, 10:29 am

      I have a friend whose kid is doing just that, he needs to save 800€ in order to visit his best friend who lives in America, he’s doing this by doing odd jobs, his Mum offered to pay the stewardess fee (for flying under age) best part is he’s 10 years old

      Reply
  • Ms. Doodles March 29, 2013, 6:57 am

    I grew up in a culture where parents are expected to pay for college education. And to those who cannot do so, they will be deemed a failure by the community.

    I didn’t realize the cultural aspect until I moved to the US. While I enjoyed my upbringing, I was not well-equipped for a strong financial health in my early twenties. My early twenties run amok, It took a while to be debt-free and intense saving.

    I wish I had known what I know now when I was younger. It would’ve saved me a lot of setbacks.

    Reply
  • mpbaker22 March 29, 2013, 7:32 am

    I did grow up in what I would consider an upper class family, based on income. But I also always wore hand-me-downs, rode hand-me-downs (bike), and other similar examples. I also learned that being upper class does not inherently make one happier. As a result, I have rejected the ‘want’ to be upper class.

    On the library note – I had someone make fun of me at work for talking about going to the library, a sort of “they still have those” comment. Why yes, they do, and they’re several hundred dollars cheaper than that e-reader you never use.

    Reply
    • mpbaker22 March 29, 2013, 7:37 am

      That being said, I did get most my college paid for, something I actually disagree with looking back (though I’m happy to have paid off my student loans after ~13 months of work). I also got a nice new road bike for a birthday/Christmas gift a few years before I graduated. Then again, my college graduation present was a van full of gifts exclusively from thrift stores and garage sales, and about half of it was in boxes marked “free.”

      Reply
      • Early Retirement Journey March 29, 2013, 12:15 pm

        mpbaker22 – Don’t work too hard to spread the word about the library – it’ll only make it harder for those of us who do use them to get the books we want. Not to mention the rapid expansion of library e-books, which are an even better deal. No reserve fee, and no late fees ever on library e-books!

        Reply
  • Dividend Growth Investor March 29, 2013, 7:46 am

    MMM,

    This is a great post. I think that raising children that are not spoiled, and that are thoughtful and productive members of society is the most important thing for a parent. Even Buffett has mentioned that he will leave some money to his children, but only if they do something with their lives.

    If you read his biography ” The Snowball”,you would see that Warren Buffett’s children went to the same high school as the other kids in the neighbourhood and they didn’t even realize they were “rich” until they were much older.

    Reply
  • Pollyanna March 29, 2013, 7:51 am

    Thought-provoking post — my own childhood was spent in a frugal household. My sister and I were thrilled to receive used bicycles at Christmas. When I was a teen and borrowed the family car (only with good reason), I had to pay $0.10/mile (1970’s). I was not encouraged to go to college even though I was successful in school. I always worked (babysitting prior to being old enough at age 15 for a job at McDonalds), and after high school used public transportation to get to a more “professional” job (secretary). I did start community college that fall, but given that on class nights I had to borrow Dad’s car to go from work to college @ $0.10 mile, as well as pay for tuition and books, that lasted one semester. I swore I would give my kids more support in the way of encouragement, confidence and monetary. I received my college degree at age 46 via my company’s tuition refund program. Our sons both went to state colleges and finished in four years – we paid, we told them we’d give them 4 years of tuition at a state school assuming good grades – if they needed longer or went to another college, they paid the difference. We have always been a saving family, our sons are now in their 20’s, both own houses, have good jobs and are good with their finances. I think my childhood gave me a double-edged sword — in some ways I treat myself, in other ways I just can’t bring myself to spend money on certain things. I’m not retired yet, but I enjoy life and my husband and I will be able to retire in our 50’s (upper end though!) I love reading MMM!

    Reply
  • Anna-Lisa March 29, 2013, 7:58 am

    I am all for not giving kids money to spend on clothes/movies/starbucks/etc, and I certainly didn’t expect to receive such things as a teenager. What I did expect and did not receive was some support in starting to earn my own money. My parents were just not interested in helping me get a job, and it’s hard to work in high school when your parents aren’t willing to drive you. (Sorry if I sound like a whinypants, but we lived out in the country so even if I, as a girl, had been allowed to go anywhere by myself, it would have been too far to walk to any of the places that hired teenagers.) So I ended up graduating high school with no savings, no work history, and terrified because I didn’t even know how to get a job.

    I’m doing fine now, it’s not like I’m a bitter old loser blaming my parents for the fact that I still live in their basement, but there are definitely things I want to do differently with my own kids to help them get started off financially.

    Reply
    • Mr. Money Mustache March 29, 2013, 9:33 am

      That’s a really interesting point about living in the country. The Mrs. and I actually feel that we owe it to our son to live close to other people and amenities – i.e., in the center of our small city. Without that, you either need to spend your life driving cars to get places, or have your kids sitting at home isolated on the farm.

      Of course, the country has its own perks – nature and wide-open spaces. But in the city you can get that too, if you know where to look – we spend many of our Saturdays on the 6-mile greenway that runs along the creek that cuts though the whole city. Forest, fish, birds and butterflies. And the rocky mountains begin if you ride your bike far enough West. Country-dwellers have got nothing on us, and yet I can walk to the library and the grocery store.

      Reply
    • 6404H March 30, 2013, 1:11 am

      I agree that teenagers need support (rides to work, help obtaining a driver’s license, ability to drive the family car) in order to work and earn/save money. I’ve witnessed the damage done to teenagers who are told to earn money for driver’s ed, car insurance and purchase of a car even though the parent(s) will not drive the teenager to a job. This is not restricted to the country, but applies to subdivision living also. Seems counterproductive- but it happens. So sorry that you were in this position.

      15-20 year olds need parental assistance and guidance in order to be educationally, socially, and financially secure – and to develop positive habits that will follow them for the rest of their lives. It is possible for a 16-18 year old to earn and save money for college.

      My 18 year old daughter has a significant savings account that she earned waitressing. She shared my car and saved the expenses of having her own vehicle. She will be going to in-state public college this fall. She has some academic scholarships ($8,000) per year, but will still be left with loans($5,000) per year and will need to come up with cash ($11,000) per year. Hoping that Advanced Placement credits and Post Secondary credits (earned from a community college while a Senior in high school) can help her to realize a Bachelor’s Degree in 3 years. The goal is that she’ll pay one third and her dad and I will each pay one third of her college. We will all be dipping into our savings and all three of us will be living like poor college students, but that is the sacrifice we will make. We all want her to have the education and we do not want her to be more than $15 – $20,000 in debt when she graduates.

      Reply
    • Another March 30, 2013, 7:21 pm

      You sure sound like you are describing my upbringing. I was fortunate that we moved into the tiny town that was a twenty minute drive away, right around when I turned sixteen. I the was able to find a job and work a lot of evenings. I now have children of my own, and I will never make them grow up isolated from others.

      Reply
  • Jane Savers @ The Money Puzzle March 29, 2013, 8:09 am

    My sons had very easy time getting retail jobs when they turned 16. They both had lengthy resumes that included haying, stone picking and fire wood stacking. I have always expected them to work and they didn’t get paid for work at home. They did a lot of work for neighbours and were the first kids called when a chore needed to be done. Some neighbours would hire my sons to stack the winter’s worth of fire wood while their own children would be in the house watching tv.

    I remember the knock on my bedroom door at 6:00am many winter mornings. My dad would knock and say “it snowed and your mother has to get to work”. My 2 older brothers and myself would all be shoveling our assigned sections in the dark so my mom could get to work. I would put my snowsuit on over my pajamas.

    Reply
    • Mr. Money Mustache March 29, 2013, 9:35 am

      What a fine badass story! Kids shoveling the driveway in the early morning – I love it!

      Reply
      • lurker March 29, 2013, 10:05 am

        Truly badass…. I remember lugging my shovel around the neighborhood as a fifth grader after all snowstorms and making really good money but had to finish my house first…..I am afraid I spoil my own daughters.

        Reply
        • Toddius March 29, 2013, 10:23 am

          Growing up my brother and I had chores to do. We also got an allowance,it was a very small amount and we actually saved most of it. We had to do the chores because we were part of the family and that’s what being in a family was. We also got the money because we were part of the family. But the real point is that they were not really related. We didn’t do the chores to get the allowance, we did them because we had to. But then when we got older my parents decided that the best way to punish us was to knock off bits of our allowance. I think it was more of a quiescence that we usually were punished for not doing our chores.

          I’ve always thought that this was a good way of doing it because the option of not doing the chores is not there. I hope to do a similar thing with my kids some day.

          Reply
  • Mrs. 1500 March 29, 2013, 8:16 am

    This post is so so true! Growing up, my parents would break out the map and the newspaper on Saturday morning and plot out our garage sales route for that day based on location and products advertised. We bought almost everything at garage sales. Fast forward to present day, and still most things are bought at garage sales or thrift stores.

    I was fortunate enough to have my college paid for by my parents, who saved and invested my entire life to be able to do so. Mr. 1500 was not so fortunate. I still remember the last check we wrote to pay off his student loans – the happiest check we ever wrote!

    The neighborhood we live in now is rife with things. Parents here prefer to give things rather than time. We own the second oldest car (the oldest is a classic collectible truck worth waaay more than our 2003 Element) in the neighborhood – even the teens of driving age have nicer, newer cars than we do! We have our house on the market, trying desperately to get out of this keeping-up-with-the-Joneses atmosphere. It is difficult enough raising children to be frugal and respectful of the earth without living in a neighborhood where every other family has the exact opposite attitude toward money and environment.

    Reply
  • avonlea March 29, 2013, 8:20 am

    What if your child has a learning disability? Should they just be screwed for life? My fourth grader has both dyslexia and Asperger’s. He tries EXTREMELY hard to read well and learn arithmetic facts. And I work with him a great deal to hone these skills. This year he has jumped from reading at a first grade level to a mid-third grade level. And that accomplishment makes me feel like we’re walking on air! His little sister is in first grade and really requires no help at academics all (has picked up reading skills just from hearing me read bedtime stories to her, reads at a fifth grade level, picks up math facts easily just from playing games that have addition, subtractions, multiplication, etc.)

    As time goes on, I am feeling less anxious about my son’s ability to enter college someday, but I also don’t think it’s going to be a cakewalk for him to get scholarships. He is really talented when it comes to scientific thought and conceptual math. And as he gets older (teenage years?), I think he will feel more confident in his talents. But with standardized tests and college entrance exams being highly based on language and quick reading ability, I don’t know if it’s fair to say, “Hey, kid, funding college is completely up to you. Just make yourself read more quickly.” And I don’t think it would be good to just say maybe college isn’t for him. I think that he will find a lot of joy in working where his talents lie: science or architecture.

    His father is a wonderful computer scientist, but he had a similar situation as a child. His parents and teachers all gave up on him at a fairly young age. He was able to produce really great material in college once he was able to focus on his physics and computer science classes, though. My dad had severe dyslexia as a child–couldn’t read at all until he was a teenager. Yet he managed to make it through college just fine when he was allowed to focus his abilities on animal science. He had a nice career working in a field he loved. My father did pay for his own college education, but it was at a time when college was not nearly as financially burdening as it is now–his part-time job pretty much covered all the costs. My husband’s parents paid for his education and he is incredibly grateful.

    As a child, I was told that funding for my college education was up to me. And I was a lot like my daughter. Learning came easily. I thought I worked really hard since I was #1 in my classes, but I see now that I probably didn’t work nearly as much as some of the kids who were struggling just to pass. I received a full scholarship, but I don’t think I can say that my life is more accomplished than most.

    Every kid is different. Yes, teach them as much self-reliance as possible but also teach them that when they really need you, you are there for them to help them find a life that they will love. There are exceptions in everything.

    Reply
    • CL March 30, 2013, 8:35 pm

      I totally agree that different situations call for different responses, but if your kid has an IEP for his dyslexia and Aspergers, then he can get extra time on the SAT, because the College Board accommodates children with different needs. In a way, he’s a bit advantaged because he doesn’t need to operate under time constraints. I don’t know if you’ve heard of Penelope Trunk, but she has dyscalculia and Aspergers. Her oldest had Aspergers as well and she talks on her homeschooling blog about the challenges and considerations involved with Aspie children.

      Reply
    • Accidental Miser April 1, 2013, 3:42 pm

      Your situation is very similar to ours, except our dyslexic child is two months from graduating from HS (he is our youngest.) We will be helping get the training he needs to be a productive member of society since we have restricted him from holding a regular job during HS because he needs to really focus on the school work to pass with Cs. He has more mechanical aptitude than almost anyone I have ever met and will work on anything mechanical with brilliant aplomb. In HIS case, we will need to help him financially for a few more years and we are good with that.

      My other four sons are a different story entirely. Our financial assistance to them is a car to drive and a place to live and eat while they attend school. Our eldest held two jobs and completed his chemistry degree and is now employed as a chemist at a power plant. He has some student debt but nothing unmanageable. Our next son will finish his engineering degree in December and has already landed a position with the company he is interning for. He has received moderate scholarships (we moved during his college career, so his scholarships were a little messed up by that) but has no debt and will have engineering degree in hand and about 10k cash in the bank when he graduates.

      Next son didn’t take our very good advice and generous offer and is now living in a small apartment and working full time to make ends meet. Our deal is still on the table, but some people are just hard headed.

      Number four is also an engineering student, interning at the same company as his brother. He has better scholarships but more debt because he chooses to spend his money differently. We have firmly advised him against spending and borrowing but he is making his own choices. If we provided him financial support, he would just go and buy more games and sunglasses.

      Also, except for the youngest, if they drop or fail our of college, they will be providing their own support (as my middle child does.)

      The bottom line is that every kid is different. If you live near a state school with reasonable tuition, I would encourage you to consider providing non-financial support while they are going to school. It teaches them to be more responsible for themselves while still helping them get through school. They will value their education more because they have real skin in the game and they will learn some life and money management lessons along the way.

      Reply
  • Chris Fuller March 29, 2013, 8:23 am

    This was a great article MMM! I completely agree. It is true that every experience we have makes us who we are today.

    I grew up in a very low income household, with some big problems – we always had very little food and of poor quality (think hot dogs and white bread). My mom made all the decisions in the household and was abusive. My dad was passive to all this. They didn’t give me any sort of financial support, and I programmed flash games to pay my way through university. I am a 22 year old intern right now with over $25k saved and on my way to ERE :)

    For some reason I hear from people (like my girlfriend and her family) that it is amazing that I turned out the way I did with the family I had. But I often say I think I am the way I am because of my circumstances, not in spite of them.

    Reply
  • Dmitry March 29, 2013, 8:24 am

    Why can’t I enlarge the picture that comes with this post? :(

    Reply
    • Mr. Money Mustache March 29, 2013, 9:47 am

      It’s because it is a work day, Dmitry. No bikinis for you!

      Reply
      • Rob March 29, 2013, 12:40 pm

        Like:)

        Reply
      • Dmitry March 31, 2013, 2:46 pm

        Point taken, Sir. :)
        Still, thanks for the food for thought, as always!

        Reply
  • KB March 29, 2013, 8:26 am

    Hey – I can assure you live in Canada is no different than the U.S. in this regard of paying for your kids’ cell phone plans, weddings, down payments their house, rent or whatever else. What has happened in society is sort of an adult peer pressure and parents being very involved in their kids’ lives. Here’s some examples – Canadian universities have seen a 100% increase in parents attending information days on or off campus and the parents asking most of the questions; parents sometimes talk to their teen’s employers about shift preferences, work reviews, etc.

    Parents feel that their offspring is a reflection of them more than ever and also see what other parents are doing and want the same. You’re putting Julie in that $1500 dance camp this summer for several weeks. My daughter will get behind I better get her in there too or she’ll be behind.
    Peter’s son lives in a gorgeous condo downtown, you don’t want to say your kid is living in a basement apartment and works at the local Safeway, so you help with his rent to a better place and offer to pay for his post secondary education – anywhere – just take anything kid!

    On Christmas day last year my 12 year old son and over 10 of his friends all started messaging each other about what cell phone they got for Christmas. My son didn’t receive one of the fancier ones and was trying to be happy but when the other kids were describing their i-phones, etc, it becomes hard for a kid not to feel that jealousy and desire.

    Life is so different from when I was a teen in the ’80’s and I have to say my 2 brothers and I had a very very similar upbringing to you but that’s the thing – everybody did – and that’s the key. If all the kids are out playing street hockey and hide’n seek till the lights come on, that’s great but if all the kids are out at their organized sporting events, you’ll find yourself the odd man out and your child too.

    I admire your lifestyle MMM and not making a case to make things easy for kids, I’m just saying it’s a lot harder and a lot different now. People are making things easy for their kids and weakening instead of strengthening them for adult life. The kids are seeing other parents provide so much for them and are wondering why you aren’t too?! It will be interesting to see what the future holds…!

    Reply
    • Mr. Money Mustache March 29, 2013, 9:54 am

      It’s not a whole lot different, unless you allow it to be that way. There were rich kids and organized sporting events in 1985, too.

      And here on my street in a moderately high-income area, just 12 miles from Boulder, in the year 2013? The kids of all ages run around on the street, throwing balls or shooting waterguns until the streetlights come on. Sometimes even later, if the parents are out having beers and not too strict with the clock.

      By reading and writing here, you and I are changing society, back to the way it should be. But since society is a slow boat to steer, you have to make adjustments by choosing your own surroundings in the meantime. Never concede to “the way things are”.

      Reply
      • KB March 29, 2013, 12:42 pm

        MMM- I think a lot of people envy your life and you are doing a lot of good by writing this blog – so interesting and fun to read!

        My perspective of the world though is that it is so different than 1985 but that’s just to me personally. Maybe I don’t surround myself with enough like minded people.

        You recently wrote that in university you shared a text book between 4 guys and you shared notes and photocopies – correct me if I’m wrong, but I think that was the gist of it. I love it! Great idea and I think it also brings you closer to your friends and it’s really positive. I think though if I was to suggest this to my son, my prediction would be that his friends would all say that their parents bought them the text book and that they think they should have their own so that they could always have it when they need it to reference or study. Is this me being pessimistic?

        In 1985, there sure were organized sports. My brothers played rep hockey and soccer and I did dance and gymnastics all on my dad’s blue collar salary. Today a rep team in the Hamilton area for a 10 year old kid has a seasonal budget of $50,000 – rep hockey (and soccer) are now year round sports. There’s also the costs for tournaments and hotels and don’t forget equipment and that $200 composite stick! Then there’s the camps and spring and summer teams.

        In my view, MMM style is going against the grain these days and like you say it’s a slow boat to steer! I feel caught between the worlds of MMM and Toddlers and Tiaras sometimes!!

        Reply
        • Another March 30, 2013, 7:43 pm

          I think the point is to avoid ever putting your children in those types of sports to begin with. We choose to put our children in organized sports, but we choose sports that are much cheaper and less demanding on our time. We have avoided he dreaded hockey trap… and I have two boys… and a husband that played growing up.

          Not only are the sports more affordable, we have their sports mostly paid for by working voluntary bingos, etc. Not to mention that the county we live in also subsidizes team sports up to $200 per person per year. Bonus. :)

          My children are still quite young compared to yours and I’m not sure what will happen when we get to the “cell phone” age, but seeing as how not husband and I share a pay as you go cell…. I think they will realize early on that they will have to save their own money to fund it themselves.

          Reply
        • Megan May 12, 2014, 5:59 pm

          I realize this is kind of off topic, but I wanted to put in a comment about textbooks in college. My husband and I both did engineering which requires a lot of very expensive textbooks. He tried to borrow as many as possible while I bought pretty much all of mine (though used, when I could). Obviously, he saved a lot of money in college on books over me.

          10+ years later though, my husband is saying that he is finding that was false economy and he wishes he had purchased his own textbooks. The reason is that since we both still work in engineering, the textbooks are actually good references to have, for work or for brushing up for interviews. It is immensely helpful to be able to look up things in the book that you used before because you are familiar with it, and it makes dredging up those old memories a lot easier. This is not something either of us really anticipated at the time, but I would encourage people in college to somehow get their own books if possible, if they intend to stay in the field they study.

          Reply
          • CheerfulAdventurer October 4, 2014, 2:04 pm

            OK, I don’t expect an answer now… but I wonder if there are no college/university libraries in the US?!

            I graduated here in Central Europe by hardly buying or photocopying a book. (I bought the few most useful AFTER taking the related exam.) Library membership was very cheap if not free for the institute’s own students. Now after 11 years I’m going to another university in another city and the situation is the same (except that many references are now published online so even a library is unneeded). If your college’s library is poorly equipped you can go to that of any other school because despite not being free, it’s still cheap for students – from any school.

            When already working, if you regularly need certain books for your job then you have your company buy it (probably you’re not the only staff member who will be helped by it), and if you need them for one-time preparations you borrow them again (many university textbooks are available at public libraries too!). Chances are good that you can even take a newer edition into your hands than if you had kept your own copy of student years.

            Reply
  • Ms. Must-stash March 29, 2013, 8:31 am

    YES! Love this post – great ideas for when my daughter gets older. Though I will say that we have a two year old and the pressure is already starting – fancy toddler birthday parties, expensive pre-schools, tons of new toys. (Why oh why don’t people realize what great toys are available on Craigslist or Ebay?)

    I realized right away that when kids are really little the birthday parties aren’t for them, they’re for the parents. So we cut that step out and for my daughter’s 2nd birthday, we bought a bag of balloons ($3), filled the living room with them, and had a dance party to her favorite music with me, Dad, and grandparents. Awesome! What more does a 2 year old want?

    Since she has a December birthday (brrr!) and renting an indoor venue is often quite expensive, we’re already planning a work-around for when she’s older and birthdays matter more – we’ll instead celebrate her half-birthday in June. We can have a party outside at a park and make it about running around and playing vs. spending money and trying to impress our friends.

    Isn’t bucking conventions fun?

    Reply
  • Atlantalee March 29, 2013, 8:31 am

    I agree with most of your arguments, but education is a tough one for me.

    My parents’ (mostly mom’s) philosophy was that our first priority should always be school. They never wanted my sister and I to stress out about money, seeing as how they were responsible for bringing us into the world. Fortunately, neither of us was the type to take advantage of their generosity. We got jobs in high school because we wanted to. Mom paid for my sister’s liberal arts college, and I went to in-state school for free. We have been relatively independent ever since.

    Because I value education and believe it would improve the lives of my children (if I had them), and would hopefully make them more self-sufficient, I would save for their college and would not expect them to pay for it completely. I saw my half-sister (on my Dad’s side) struggle for 6 years in a 4-year program because she worked 30-40 hours a week and couldn’t keep up with her school work. She racked up thousands of dollars in credit card debt, which she is still paying off 10 years later. I wouldn’t say that forcing her to pay for college strengthened her. I do believe the results are highly dependent on the type of kid you’re dealing with. Honestly, she probably would have racked up that credit card debt regardless of whether her education was paid for.

    Reply
  • jessica w March 29, 2013, 8:37 am

    I also agree with this article! I was raised with 7 other siblings(4 of which were adopted). We were all given great education, life lessons, and the value of hard work. My dad makes a lot of money,but growing up the only money I ever saw was chore money of about $15 a month when I was older and lucky. One of the best things my parents did was give us $50 a month once we turned 16 and could drive. We had to learn to budget this money to cover all our clothing, gas(only to school & church activities), and spending money. If we ran out, tough luck. The only reason they paid that gas and had a car for us to share was because we went to private school that didn’t have a bus that drove to where we lived. With weddings, my dad had a set amount he told us all about in the beginning. We (each girl) had 10k for a wedding, whatever you don’t use, you get to keep. So, I had a 3k wonderful wedding and a nest egg of 7k to bring to our marriage which was sweet as well. If we wanted anything else, we had to work even if it was taco bell which was my first job. I had no clue how much my dad made since my mom was a stay at home mom. We lived in a 180k house with 10 people, sometimes we shared rooms,but we were a family and spent time together camping, playing games, watching movies at home, and always cooking our own meals. We only went out to eat on birthdays. Now that I am grown my husband and I love that we live debt free, and live on 30% of our income and have the rest either in retirement, HSA, or savings toward a house. We had a hard time finding jobs out of school due to the economy but learned to live on VERY little while paying off student loans, and once our incomes increased not increase our standard of living. It is hard sometimes not to want to keep up with the “jones'”,but I am so grateful for all of the lessons I was taught growing up. I hated shopping at thrift stores as a teen but am forever grateful now. Also, skills like sewing, budgeting, cooking, and not having to spend money to have fun are priceless things to teach boys and girls. Also, as you have mentioned in previous posts, buying things used is huge, and we get most of our things from craigslist and they are always great condition, way cheap, and last for fricken ever. Growing up of course there were some things we were spoiled on,but any of those privileges were dependent on our behavior if they were to continue. Thanks for all the blog posts, it is nice to see that we aren’t the only crazies out there!

    Reply
    • jessica w March 29, 2013, 8:48 am

      Oh, I also forgot to mention, at birthdays and Christmas we got one $40 gift from my parents and any gifts that we hand made for our siblings. Now that I am 25, I still get one gift from my parents, and all of us siblings drawn names to get one other person a gift for christmas and that is it. Gifts to nieces and nephews are optional if you want to spend the time making something or the money to buy something.

      Reply
    • Susan March 29, 2013, 9:36 am

      My parents did a similar thing for me and my siblings when we got married. We got a set amount of money, and we could keep what we didn’t use. My DH and I eloped on the cheap and put the rest in the bank. I will probably do a similar thing when my kids are getting married someday- A modest monetary gift that they can choose how to spend-for a wedding, towards a house, for tuition, or whatever they need/want.

      Reply
  • Steve J March 29, 2013, 8:38 am

    MMM,

    Thanks for sharing your upbringing and thoughts on raising of children. It pretty much parallels what we were taught. Looking back from 60 with my two children now raised, with successful careers, it clearly was the right thing at the right time. It also was much more common in the 80’s for this sort of an upbringing. We simply did not have the excesses that we have today in America.
    No one is entitled to more than a loving family, and guidance towards their future by their loved ones.
    We were taught to respect others, work hard in school and save for our futures.
    It really was just that simple.

    Reply
  • Susan March 29, 2013, 8:46 am

    My husband and I are the only people we know in our age group/circle of friends that didn’t end up in debt when we graduated from college, and didn’t have our parents pay for everything, either. Both of us worked our asses off while in college with multiple jobs to pay our way, with some help coming from small scholarships and some money from our parents. (Actually, we both worked jobs as teenagers and saved our money then, too) I also paid up front for graduate school to earn a master’s degree, and my husband was able to work full time as a teacher while getting his teaching credential. So no debt for advanced degrees/certification either.
    We want our kids to have to work to pay for college. But we don’t think they need to pay every cent themselves. I have set aside a small amount of money I received as an unexpected inheritance for each of them already that will sit and grow for the next 17 and 15 years until they (hopefully) choose to go to college. It will go a lot farther if they choose to go to a state school, or a community college. It will be up to them to make those decisions. But they will definitely need to work during school to make up the difference.

    Reply
  • Patrick March 29, 2013, 9:01 am

    I’m incredibly sensitive to this topic, and my thoughts on how to raise my two girls center on their financial independence. I believe it to be the most important factor in their future well-being, and I’m sort of obsessed with these thoughts.

    That said, I appreciate that my parents let me loose to earn at a very young age. I also appreciate that I didn’t get any financial help past age 17, but I also didn’t really get an education beyond their own frugal example. I had a very strong will that my parents respected, and they are exeptional at making their money go a long way.

    Beyond that, I’ve been a very typical American having to figure it out through trial and error. Of course, they were always willing to provide whatever they could, but they had their own struggles going through life. They instilled a great need for independence, so I didn’t ask because I know they would have given things they didn’t have.

    Are we losing this as a society? Perhaps. I am also really curious about my peers who are scrambling to save tens to hundreds of thousands of dollars for their children… how do we know they even WANT to go to college? How do we know the even WANT to get married? And, why would I pay for that? It seems like it cheapens the whole point of doing these things and is very much market fear driven.

    I don’t save for my girls’ college. They’ll know that there is no trust fund or pool of money for them. I could pay for college and other stuff, but I’m not going to. I will, however, teach them everything I know about money and how to both make it and defend it. I think this is far more valuable and “crash proof.”

    Lots to say about this, but it’s a good discussion.

    Reply
  • m smith March 29, 2013, 9:03 am

    I largely agree with this, except it ignores that the cost of college has been rising much faster than general inflation or the minimum wage. Since 2001, it has not been possible to pay tuition at the average public university by working 20 hours per week during the school year and 40 hours per week at a minimum wage job.

    It certainly could be good for a young person to take some years before college to work and build up savings to pay their own tuition, earn scholarships to defray the cost, or do their first two years at a community college before transferring to a four-year state college – but none of these things were necessary 20 or 30 years ago.

    http://www.pbs.org/newshour/rundown/2012/05/can-you-still-work-your-way-through-college.html

    Reply
    • Mr. Money Mustache March 29, 2013, 10:18 am

      Good point – average tuition has definitely risen. But I guess that just makes it an exciting challenge for us as parents. One of my primary goals is to teach my son how to earn far more than minimum wage, as early as possible.

      Minimum wage is set at a comically low level in the US. But luckily, if you are privileged enough to have parents who can teach you how to work effectively, there is no need to work for $8.00 an hour by the time you’re older than about twelve.

      This whole blog is partly about building the type of parent, who is able to teach their kids that type of skills.

      Reply
      • Amicable Skeptic March 29, 2013, 12:58 pm

        The average sticker price of colleges has risen faster than inflation, but this has been accompanied by far greater financial aid so the net price is actually growing slower than inflation. See
        http://www.npr.org/blogs/money/2012/05/22/153316565/the-price-of-college-tuition-in-1-graphic
        and
        http://www.npr.org/blogs/money/2012/05/11/152511771/the-real-price-of-college

        One of the interesting things for mustachians is that much financial aid is need based and kids whose parents have money may not get that need based aid. That being the other side of financial aid is based on demonstrated knowledge (test taking, grades, etc.) that gets summed up as “merit” and kids from families with money are statistically favored in this area so maybe it comes out in the wash.

        In my own personal experience I had good enough grades/tests to get into an Ivy league school, but not good enough to get a merit based scholarship there. I had to choose between that Ivy and a lower sticker priced (and still good) state school. My parents were relatively poor and I was going to need financial aid to go to either school. When I got the aid packages from both schools it turned out that the end prices were almost the same. This is because my aid was need based aid and they both figured I could contribute X and my parents could contribute Y and they would make up the difference Z with a combination of grants and loans. I got lucky in that the Ivy covered it’s higher sticker price almost entirely with grants instead of loans so the end loan load was close enough to make decision a no brainer.

        A few interesting lessons here though. First, I had worked and saved a bunch during middle school and high school to bank a few thousand bucks to help towards school (I forget how much exactly but probably high 4 figures which seemed like a ton at the time), but my financial aid packages potentially made this savings irrelevant. I think my grants would have simply gone up higher had I had lower savings and I would not have seen much difference in the end loan load. I still feel good that I learned the value of work during highschool and I was proud of the money I’d made but if I had really been a system gamer I would have spent my summers taking AP classes and doing independent research so I could graduate early or get a merit scholarship instead of working low paying jobs.

        The other interesting lesson is that wherever I went the aid package would have required my parents to contribute essentially the same amount. If they had had much more money I guess at some point their contribution to the state school would have maxed out and they would have saved money on me going there instead of the Ivy. The way the system was set up though I had had to have their help to go anywhere, there was no option if they wouldn’t help me. Don’t think your student will be able to get a job to make up the difference, the aid packages already require that students get jobs to contribute cash each year. I had pretty good paying jobs every semester and summer of college but pretty much all of their money went back to the school, and this would have been true at the state school too. If my parents hadn’t been willing to push in the money the financial aid people required of them I would have either had to work for a few years out of high school to build up enough cash for college or gone to a bad state school which didn’t have much in the area I wanted to study.

        Who knows what the state of financial aid will be in the future, but I hope my anecdotal evidence about how it worked in the past is useful to someone.

        Reply
        • Emmers March 31, 2013, 12:31 pm

          You generally can only reliably get “merit” scholarships to podunk universities. The really rigorous ones still have merit scholarships, but you have to basically be the biggest fish in the country (vs. in your own small city/county/whatever) to get a merit scholarship to a strong university. It’s a tradeoff – worth it to some people, not worth it to others. My HS peer group had, as an example, one person take the free ride to a lower-tier school, one person win a free ride to a higher-tier school, one person pay full tuition to the same higher-tier school (ouch), and one person go in-state with partial scholarships and parents making up the difference (me).

          Reply
      • Mira October 19, 2013, 7:00 am

        It is going to be so fun to read about what to teach kids to do to earn more than minimum wage. Awesome. I think tutoring could be on the list as well as some other brain skills. I think I sewed and did artwork/embellishment for people in high school, who would pay me, as well as a calligraphy project for a teacher who paid me. It wasn’t consistent though. Wish I had had the focus to bring a little more discipline into what to do then, creatively, to earn extra money.

        Reply
    • BeyondtheWrap March 30, 2013, 7:40 pm

      In addition to the rising cost of college, I’m also going to have to call attention to rising youth unemployment rates.

      If I eventually have kids, by they time they are teenagers (probably ~2030s or 2040s), it is likely that the “part-time job at the convenience store” will no longer exist. It will either have been automated out of existence or require at least a bachelor’s and have fierce competition. Probably both.

      Sorry to be a complainypants here, but this is something I’m not optimistic about. Talking about how you were raised does not mean you can simply extrapolate it into the future. The conditions of the time matter.

      Reply
      • Emmers March 31, 2013, 12:36 pm

        Hope for the best, plan for the worst. If my kid does get a free ride, great! The 529 will pay for grad school, or go to another relative, or get cashed out to start a small business. But you can’t just blithely assume that things will be awesome. Good things come to those who plan ahead. (It’s quasi-Mustachian, anyway…)

        Reply
  • Stephanie March 29, 2013, 9:04 am

    You know, it’s funny to me how isolating real life can be when discussing values, finances and raising kids where as the internet community can be pretty reassuring. I’m not the only one!! YAY!! I don’t have to raise a set of mini consumers! I joke to my friends (who ALL have cleaning ladies) that by the time I can afford one (I can, btw) I won’t need one because my kids will be cleaning my house! Actually – they do a pretty good job helping me clean our house and they are 5 and 7. They also have to fold and put away their own laundry and clean their bathroom – among their other chores. Most of my friends elementary aged kids don’t even unload the dishwasher.
    I’m the only one of my friends who doesn’t plan to pay for our kids college education. I don’t feel obligated. I paid for the majority of it myself (2/3) by design of my parents, who by the way, could have totally afforded it. I graduated debt free and went to a commuter city college. In discussions with my friends about this – my best friend said ‘I always assumed you were exaggerating paying for it yourself’ and I said well, I wasn’t and I think my kids should have some skin in the game. I’m also not going to allow them to finance their education through loans. They need to start saving their money in high school for college if they want to go and making as much money as possible in the summers. It’s pretty hard to skip class and fail out when you’ve written your tuition check from your own bank account.

    Reply
  • GeorgiaS March 29, 2013, 9:09 am

    When people mention not paying for their teens’ clothing, I assume you mean clothing the teens merely WANT rather than NEED, right?

    Reply
    • Mr. Money Mustache March 29, 2013, 10:02 am

      No.. I think it’s fine for young adults to just start paying for it all at some point, once they earn enough from their part-time jobs.

      Clothes are incredibly cheap these days, and it’s a nice low-stakes way for a young person to start staking out their own territory in self-sufficiency.

      If your child has special needs and can’t earn income in high school for some reason, than of course the situation would be different. But in general, you might as well start raising the bar at some point in the mid-teens, right?

      Reply
      • GeorgiaS March 29, 2013, 11:49 am

        Hmm. I disagree. By that logic I would start charging my (hypothetical) kids for groceries and rent by the time they reached their mid-teens. While I don’t think parents are obliged to pay for things kids merely WANT, I think it’s a parent’s job to cover necessities (food, clothing, shelter) until the child is 18/graduates high school (whichever comes first).

        Reply
        • Jason March 29, 2013, 2:34 pm

          Eh. I see a parents job as slightly different here Georgie. It’s a parents job to see to it that their kids are clothed, sheltered, fed, and loved. If the parent has raised their kid in such a way that the teenage kid is able to contribute toward their own clothing, shelter, and food, then that’s great. It’s even better if the kid actually wants to contribute to it.

          Reply
      • Amicable Skeptic March 29, 2013, 1:05 pm

        My two favorite (and most recommended jobs) as a teenager.

        1. Soccer referee
        2. Tutor to a younger highschooler

        Both paid over $10/your and were fun jobs.

        Reply
        • CW March 29, 2013, 11:48 pm

          It is quite fortunate for you that there were parents willing to pay you for those jobs, because following the Mustachian model, neither of those jobs would have been available, or paid that amount.

          And that is the entire problem with this whole way of looking at the world, it only works if most people aren’t doing it and it only works if you were lucky enough to be born to the right people living in the right place.

          Ultimately, the entire lifestyle boils down to “I got lucky and my advice is you do the same.” That’s the entire joke.

          Reply
          • Mr. Money Mustache March 30, 2013, 7:56 pm

            A common critique, but not one that I agree with. Even as one of the most vocal of the Mustachians, I fork over loads of dough each year to try to help young people out.

            http://www.mrmoneymustache.com/2012/04/09/what-if-everyone-became-frugal/

            and

            http://www.mrmoneymustache.com/2012/10/24/frugal-vs-cheap/

            You see, when you spend your money consciously in order to become financially independent, you end up having A LOT with which you can do whatever you choose. More than a standard consumer ever gets their hands on. So in the Future World of All Mustachian Living, there will be many opportunities for earnest young people to get a hand up – more than there are today.

            Reply
            • Alan Jackson April 22, 2013, 10:38 am

              I’d like to second this. I do all my own yard work, but will happily pay a local teenager to work in the yard with me to earn money.

              Reply
  • Betsy March 29, 2013, 9:35 am

    I will say that if you want your kids to walk/bike to jobs and activities, then it is on the parents to plan ahead and live in an area where it’s actually bikeable or walkable. If you decide to live in an area where there just is not any good infrastructure (no sidewalks, no crosswalks, narrow roads with no berms, suburban strip mall roads with no sidewalks and scary fast drivers), then your kids just aren’t going to be able to make do…not realistic to expect them to walk/bike to a part-time job if you chose to live in the sort of suburban area where this just isn’t anywhere close to safe.

    Reply
  • Kraig March 29, 2013, 9:44 am

    I’ve seen it happen in my life where friends and family members have come into a bunch of money and it wrecked them. Yes, it would sure be nice to have nice things and have a pile of money to retire on, but if it was handed to me without work and sacrifice, I’d blow it all.

    I’ve seen first hand that you only appreciate money when you’ve earned it. And at that point, you know it would be dumb to blow it because then you’d have to go earn it again.

    Kids need to learn the value of money through work. Once they do that, they’ll soon learn not to let it go too easily. Who the hell wants to work forever and have nothing to show for it and no freedom? Even teenagers could understand how stupid that is if we taught them properly, exactly how MMM is suggesting.

    Reply
  • Joe March 29, 2013, 9:44 am

    I didn’t have my own room until my senior year in high school. When I went to college, I had roomates every year until I graduated. Our family immigrated to the US and we were quite poor for many years. Even when I worked the money went into the household budget. We were quite happy though and never really wanted expensive stuff.
    When the kids know the family is struggling with money, they usually tighten down too. Now we are doing much better, but we still don’t buy a lot of stuff. I know that spending time with my kid is much more valuable than getting him an iPad.
    He gets to play with it at the library once in a while and I’m happy with that.
    He got a ton of presents from his grandparents on his birthday though. :)

    Reply
  • Mr. 1500 March 29, 2013, 9:49 am

    This reminds me of the story of Liesel Pritzker. Despite being worth $160,000,000, she worked at a deli during her high school years. I would impose the same values on my children. It terrifies me thinking of my children ending up like the Trust Fund, hard partying/cocaine snorting, big spending, Boulder roommate.

    You can read about Liesel here: http://articles.chicagotribune.com/2005-03-25/features/0503250301_1_liesel-pritzker-robert-pritzker-jim-bagley

    Oh, and ever hear about what happened to the Boulder roommate? I’ve known a couple people like this and the stories never ended well. One of them committed suicide in his early 20s.

    Reply
  • JaneMD March 29, 2013, 9:49 am

    Your child’s perception of what amount of toys/games/stuff to be ‘normal’ is very related to his/her peer group. The more exclusive you go – I’ve heard there are $20K fancy-schmancy preschools in Manhattan – the more higher the bar becomes.

    On the opposite side of the spectrum, sometimes lots of stuff is a sign of not having money because as income destabilizes, there is a tendency to buy short term items. I remember being very jealous of a girl who had cable TV in her room – her mom worked at Burger King. (I also thought that job was totally cool). My mother was a public school teacher and my father was a corporate manager, but they saved like crazy and didn’t have cable, let alone a TV in my room.

    FYI, the low income thing and short term purchases are well studied and constantly brought up politically. (example, why does someone on food stamps/welfare/medicaid have a new cell phone?) Academically for teachers “A Framework for Understanding Poverty” by Ruby K. Payne.

    Reply
    • Mr. Money Mustache March 29, 2013, 10:09 am

      .. and on the less academic end of the spectrum, John Cheese does some great writing about what it means to grow up poor:

      http://www.cracked.com/blog/the-5-stupidest-habits-you-develop-growing-up-poor/

      Reply
      • tct April 29, 2014, 11:51 am

        After reading the linked article, I’m convinced that John Cheese description of “being poor” is an attitude rather than a state or condition. John Cheese mentions things like only clothes shopping once a year and not having money to buy Christmas gifts. Growing up as kids, we only shopped for clothes once a year before school would start. We were allowed 2 pair of jeans, a pair of shoes and a few t-shirts. The MMM family doesn’t buy Christmas gifts and lives on $25k per year. Yet I never considered my family poor and I know MMM family doesn’t consider themselves poor either. I did appreciate John Cheese explanation of why he would spend the entire $5000 earned income tax credit immediately after receiving it. I had never understood the rationale behind that until now.

        Reply
  • Toddius March 29, 2013, 10:05 am

    It’s not like you arn’t leaving something for your kids when you die. If you plan right your balance in retirement will not drop. Rather it will maintain and hopefully increase at least in step with inflation. This will still be a nice gift to your children even after Uncle Sam takes his share.

    I think your most important point is that by living within your means and saving and modeling good spending habits you have given your children something so much more valuable than just cash.

    Reply
  • Melanie F March 29, 2013, 10:17 am

    As soon as I was born, my parents opened up a savings account and threw in the government Family Allowance cheques they received every month. They invested these in Canada Savings Bonds every fall, and by the time I was ready to go to university, there was enough to pay for about 2/3 of my tuition and books. The rest I paid for with a part-time job and scholarships. I am so grateful, that now I am doing something similar for my own two boys. We have an RESP and every payday we put in forty dollars for each kid. The government gives us 20% of whatever we contribute each year, which is pretty sweet. At the end of the day, this will not fully pay for any major university dreams (my oldest wants to go to MIT!), but it will get them started. I agree that university is not the only path to a successful life, but many people I know have adult children that seem to have no internal drive. They stay up all night playing video games and sleep in until noon. They don’t know what they want to do and won’t get a job. This is what I am trying to avoid.

    Reply
  • lurker March 29, 2013, 10:27 am

    you make a good point…my kids have no problem using the NYC subway system to visit their friends and get around doing what they want.

    Reply
  • TLV March 29, 2013, 10:52 am

    “displacing their own healthy learning, effort, and growth with the leather-upholstered La-Z-Boy of your easy flowing cash”

    Ouch! That feels like a personal face-punch: The biggest purchase I made after graduating and getting a “real job” was a leather-upholstered La-Z-Boy sofa.

    My parents were the high-spending, spoiling kind, but somehow I lucked out and did well anyway. I think it’s because I got hooked on programming in order to mod computer games when I was a teenager, while my siblings merely got hooked on playing games.

    Reply
    • Emmers March 31, 2013, 12:46 pm

      Hah! I bought a leather sofa five years after I graduated because leather is better for my allergies than dust-gathering cloth. Importantly, I didn’t go into debt or pay interest for it. And it will last a very long time – it’s not going to get replaced because “let’s redecorate the living room” or some nonsense like that.

      Reply
  • Steve J March 29, 2013, 10:58 am

    It’s been my experience that kids who grow up,having to do work like delivering newspapers, courtesy clerks at grocery stores, and lets not forget strawberry picking really know how to manage their money and are a leg up when it comes to monetary success in this world. Especially when they stick with it for a few years while still accomplishing their goals as students.

    Some of my closest friends who are extremely successful adults and humble as well started their working careers doing these sort of tasks.

    Reply
  • Mark March 29, 2013, 11:26 am

    I’ve always been grateful for the fact that my wife and I both grew up with modest earners for parents. It seems to have hardwired us both to have less expensive baseline expectations for things like size/fanciness of home, cost of cars, clothes, etc.

    And although I’ve made some ridiculously bad financial choices in my life, as I get older I seem to be settling into my parents’ same good habits. I have two brothers and a sister, and all of us are content to live modestly.

    Here’s to not ruining your children with wealth (or some pretend version of it)!

    Reply
  • Tara March 29, 2013, 11:29 am

    I feel that my parents were reasonably generous with us, but not to excess. As soon as we were old enough (around 6-7) we were assigned chores, like making our beds, later we did our own laundry and did the dishes, and each of us was assigned to cook dinner one night a week. My parents made it clear that there was a limited budget for college – they would only pay for tuition and books at the local state college for a bachelor’s degree, the rest of our living costs (gas, insurance, rent if we wanted to live elsewhere than home) were on us, there would be no $$ for graduate school. I worked 30-40 hours a week during the entire 4 years I went to college, taking a full load of classes. There was certainly no partying or social life – I remember being either studying, working or sleeping during the entire 4 years, but I graduated on time and debt-free.

    At the age of 46, I have already been working for 30 years, and know how hard it is to earn a dollar, so I try to respect myself by not wasting my money. I chose not to have kids, but if I did have them, I would probably only provide partial aid for college, and a small contribution toward a wedding. The rest would be on them to work for it. I appreciate everything my parents gave me, including a good work ethic that was instilled in me from an early age.

    Reply
  • Michele March 29, 2013, 11:31 am

    Whether you can afford it or not, a college degree for your child might not be all that it’s cracked up to be even in “this day and age”. My husband’s parents were paying full price for him, mine paid nothing, but we both decided to leave school without graduating in spring of 2008 and get full time jobs. Now, we plan to be retired in the next 2 years at ages 26 and 25, while most of our friends from high school are either still in college or graduate school, or working at significantly below what you would think a four year degree would pay based on the outrageous student loans that some of them have. Helping your child to get a good paying job is a lot more about teaching them to be intelligent and confident than paying any amount of money.

    Reply
  • Vince March 29, 2013, 11:39 am

    I love this post!

    I try to instill into our three kids that the time spent as a family is more important than anything that money can buy. When others are out spending major $$$ on dinners, toys and gadgets, we are out spending much less but still having as great of a time.

    A few months back I started to document our frugal (and sometimes semi – frugal) adventures as a family together. I’m trying to document our times together and the amount of $$$ that we spend so we can all look back and see that having fun as a family doesn’t have to cost a fortune.

    Check it out @ http://www.thefiguy.com/2013/03/happenings-in-2013-january.html.

    Reply
  • Jesse March 29, 2013, 11:45 am

    Hey MMM, thanks for the quote! I read that $3k Christmas bit and knew exactly who wrote it. ;)

    Keep writing. I’ll keep reading. See you in Ecuador.

    Reply
    • Mr. Money Mustache March 29, 2013, 12:00 pm

      Man, you are sharp, Jesse (and a good sport too). I wasn’t even thinking specifically of your article as I typed that bit late at night, but it had mixed in with my subconscious and I guess it threw itself into the article.

      Here’s the post Jesse is talking about on his own blog: http://www.youneedabudget.com/blog/2013/my-2012-budget-revisited-budgets-are-your-value-compass-but-which-way-is-north

      I was thinking of mentioning your post separately someday, in a post where I ask if one really DOES need a budget, given the right set of Mustachian principles to work with (I’ve never even thought of the concept of budgeting in my own life, rather just “maximize the efficiency of each financial transaction”.

      Reply
      • Jesse March 29, 2013, 12:20 pm

        In a sense, following your principles, you are budgeting, in that you’re hyper-aware of your outflows (“maximizing efficiency”), constantly assessing them against your flowing-through-your-veins plan. All I try and teach people is to become aware of what their money is doing. From that awareness stems a pretty good decision maker, for the most part.

        I’m personally trying to strike a balance between maximizing the efficiency of my transactions, while also maximizing my efforts in the business. Sometimes I think those two collide in seriously spectacular ways.

        Can’t wait to read that post. Rock on man.

        Reply
  • Ms.W @ GrowingHerWorth March 29, 2013, 11:53 am

    I grew up in a weird “in-between”. My Dad was the bread-winner, and my Mom was a stay at home mom. Dad provided the necessities; mainly food and shelter. Mom was on her own for the rest, which meant hand-me-down clothes from cousins and sparse Holidays. I remember the days when sodas and fast food were very rare treats, and most of my clothes were boy’s, since most of my cousins were male. But then Mom started a Home Daycare, and business boomed. In exchange for time, we started getting spoiled. I don’t think my younger 2 siblings remember the lean times that my older sister and I do.
    My Mom was always very independent, blazed her own trail. When she wanted something, she made it happen. I’m most like her; I became independent and made my own money (starting at age 13) so I could make my own decisions and do things my way. But then, I also started off life spending freely, something I’m trying to remedy now that I’m in my 30’s. My three other siblings all learned to expect handouts. They got a taste of the good life, and all sat back and expected Mom to keep providing. My Mom’s struggling now in her 50’s to try to figure out how to wean them off into providing for themselves, so that she can switch her focus from child-rearing to retirement planning. It’s been a long and painful road for everyone.
    Looking back, it’s the time I always appreciated over the spoiling. My fondest memories aren’t of when soda flowed freely, but rather of when Mom was there, involved, and less stressed.

    Reply
    • Ms. W @ GrowingHerWorth March 31, 2013, 3:19 pm

      I don’t mind sharing. My Dad worked two jobs most of my childhood, with a full time job where he worked overtime and swing shifts, and then ran his own business at night. He was normally just home to sleep and eat dinner. My parents held the belief that the man’s job was to provide, and the woman’s was to raise the children, and they took that to extremes. My Dad admits he has no patience for children, and my Mom fostered that… we never ate in the same room with him, so he wouldn’t yell at us, etc. It wasn’t until I was in my twenties that my Dad began trying to have a relationship with us. To say the least it’s been a weird transition, and we all still struggle. I was terrified of him growing up!

      One “extra” that my Dad did pay for was our education. Not college, but the public schools in our area are terrible, so we all went to private grade schools and high schools. Times 4 kids, and that took up a lot of his money. Other than that, he’s always believed you spend while you have it, and skrimp when you don’t. I think most of what was left usually went into new “toys” for his business.

      My Mom has always been a saver. As they get older, their money differences are making things harder. My Dad now only has his business, so it’s harder for him to pay for much more than the basics. Sometimes he struggles to cover even those. My Mom’s savings have gotten them through many tough times, in addition to make a down payment on two different houses. My Mom changed careers, and now makes more than him, with a consistent pay check. They’re going through Dave Ramsey classes now, and are considering the idea of combining their financial lives. But my Mom is being very clear that if they do, they’ll do it her way. She told him they did it his way when he made all the money, and it never worked out, now that she makes the money they’ll do it her way.

      As a side note, they have 4 children, the oldest 36, the youngest 24, none of whom have ever been married or in a long-term relationship, and all of whom have struggled with money (although for different reasons). I’m not saying our lives are their fault, just that kids learn a lot from their parents about relationships and finances.

      Reply
  • Jessica March 29, 2013, 12:30 pm

    I am a teacher and a few of my students have worked as caddies. One boy and one girl received full ride scholarships for their entire education through the Evan’s scholarship program. Criteria: hard work (starting here as young as 13), and great grades. (The boy’s older brother also received the scholarship.) I never knew this type of opportunity existed and just thought I would pass on the savings.

    Reply
  • Lindsey March 29, 2013, 12:46 pm

    My first real job was in a chicken gutting factory. It paid better than most other jobs but the biggest payoffs were these two: first, I have managed to survive many job irritations by reminding myself that at least I was no longer working in a chicken gutting factory, and second, it spurred me through not only college but also graduate school. I remember vividly standing by the assembly line thinking, “I need to get enough education so I never, ever have to do this again.” I was afraid college would not be enough, so got a masters and then a Ph.D. So, I owe my good life now to thousands of dead chickens.

    Reply
  • SavvyFinancialLatina March 29, 2013, 1:03 pm

    I was actually raised in a very similar way. I come from a low income immigrant family.
    I didn’t have hand outs. I had to earn everything, and often, find ways to get what I wanted. My parents “supported” me by giving me a roof over my head, food, and driving me to school. The rest was up to me.

    My hubby on the other hand was raised in an upper middle class family, and his parents gave him everything. Spoiled him a lot! Even though compared to other family and kids in his neighborhood and social group, he was not spoiled. He admits it’s one of the reasons he didn’t try in school, because he knew his future was taken care of.

    Don’t get me wrong. My hubby is awesome, but he and I both know we have different drives. I am very driven and motivated, while he not so much.

    Reply
  • Grandpa Money Mustache March 29, 2013, 1:10 pm

    MMM’s thriftiness has deep roots. My mother was a teenager during the Great Depression and the family was very poor. Each of the ten children got only one orange each year – at Christmas. A special treat for her on the farm where her dad was a labourer was dipping a slice of raw turnip into the molasses barrel, then dipping that into the bran barrel. 1000% healthier than a Big Mac!

    Reply
    • Miser Mom March 29, 2013, 6:29 pm

      I love your stories, Grandpa Money Mustache! My own dad still chortles over some of his thrifty tricks (his favorite; he’d pay me 50 cents to “babysit” my sisters on those evenings when he and my mom went out, and he’d pay both my sisters 25 cents so they’d be willing to be babysat by me. A whole evening of child care for $1!) But I bet you’ve got some even funnier stories.

      Reply
  • Walt March 29, 2013, 1:24 pm

    Great post – I agree with many others that there’s no good reason to withhold money from your children just to be a hardass – the point is to use your freedom to teach them how to be self-sufficient.

    My wife has said that she actually would have been better off with paying the tuition that remained after her scholarships had her father not been a high-salaried executive. She would have qualified for more financial assistance and more importantly she would have actually gotten to spend time with him.

    The same goes for education too. Too many college undergrads expect to be told the answer, and they give up if they have to work for it. Learn to love the agony and satisfaction of taking care of yourself!

    Reply
  • Alexandria March 29, 2013, 1:43 pm

    This explains a lot. I was totally raised the same way. I remember specifically while growing up that most people were horrified by the way I was raised. I have always found this ironic because adulthood has seemed so easy, and we have been quite sucessful financially. It seems to be a recipe for success (& I have never identified with all the horrors of being a self-supporting teenager). There is a huge difference between having NO support from your parents and no other choice, and when this upbringing is brought about in a manner to teach you to be a productive member of society. We both have VERY supportive parents. They just were never inclined to hand us things.

    What I have, that my parents didn’t have, is wealthy retired parents. Both my spouse and I. So, it’s kind of this interesting dichotomy where we totally raise our kids the same way, but they get a little spoiled by the grandparents. (For example, my 10yo is being taken to Europe this summer. An offer that was never extended to us. HA!). Our grandparents were just so impoverished. But anyway, I don’t think we will get such overt criticism for the way we raise our kids, because of the spoiling they do get. But will see when we expect them to work and earn money (about age 13).

    On the college discussion, my spouse and I and our siblings and our parents all got inexpensive and VERY useful college degrees. There was not a penny borrowed and not a lot of financial stretching to pay for college. I think the same will probably be true for my younger son. My elder son is showing signs that the private school route might be useful for him. (Though as long as we can’t cash flow it, we won’t bother, for sure. WE are well aware of other options). The thing is when you kind of back away from the herd and consider your options, you end up in this situation. So 9 of us barely spent any money on college, and one of us wants to go to an elite private school. DONE!! My kids will have 10 times the financial opportunity that their parents or Grandparents had, when it comes to college choices. A lot of this is because because we were all so fiscally prudent in our own college and career ambitions. A little fiscal conversation now always provides more options in spades down the road – that is my experience.

    Reply
  • Jason March 29, 2013, 2:00 pm

    Hypothetical:

    Your kid is now 18. Instead of going to college, he wants to start a business paving driveways. The only problem is, he can’t afford the equipment so he asks you for a loan. What do you say? Do you give him the loan? Do you tell him that he’ll have to fund the business himself? Do you explain to him that this career might be a struggle and that he’ll be competing with recent immigrants that are hungry for work and happy with very low margins? Do you encourage him at this point to go to college? Do you steer him toward it?

    Basically… will you steer your kid toward college if/when you can see that he’s about to make a choice that may not work out the way he thinks?

    Reply
    • Gerard March 30, 2013, 7:07 am

      Hypothetically, I’d tell him he needs to get a job working for someone else first, to raise enough money to buy the equipment. See if he wants it badly enough to commit his shit to it, instead of yours.

      Reply
  • Jeremy March 29, 2013, 4:21 pm

    This post brings a tear to my eye, it’s beautiful

    I grew up as the oldest of 4. Neither of my parents earned much or had a solid financial understanding. My dad was unemployed for quite awhile while I was in elementary school, and money was always tight. I shared a bedroom with my 2 brothers, rode my bicycle everywhere, and paid for anything outside of basic food and a place to sleep

    Aside from being poor financial examples, my parents did a lot of things right: we were taught the value of reading, the value of hard work, and the skill of being responsible for ourselves and our needs. All 4 of us could read before going to kindergarten. We all had jobs in high school. Good grades were expected. Many of our neighbors were at home on welfare, but my parents both worked like dogs even though their income was probably lower than the welfare checks. I remember my Mom saying how she could never live off the work of somebody else. Even so, my Mom had a homemade dinner on the table nearly every night, and we all ate together as a family

    I paid for college by myself. There was no other option. I was the first of 3 generations to go to college. It was never really even talked about, I just knew that was something I needed to do to move up in the world. I worked 20-30 hours a week through school while taking 18-credits a quarter. Two of my roommates that were having school paid for by their parents dropped out in our sophomore year.

    My wife and I are now retired in our 30’s, traveling the world. Having to work for what we got, as kids and as adults, made all the difference. Similar to MMM, I don’t think I would have turned down any pampering along the way, but in hindsight my answer would definitely be “Hell, no!”

    Reply
    • jim March 29, 2013, 10:15 pm

      Wow! God bless your parents and their loved ones. I AM impressed. Good for you!

      Reply
      • Jeremy March 31, 2013, 2:29 pm

        Thank you Jim. Blessings to you and yours as well

        Reply
  • jim March 29, 2013, 4:29 pm

    Best article you’ve ever written! Nicely done. Couldn’t agree with you more. Wish more parents thought along these lines. We’d have a better country if they did.

    Reply
  • Matt March 29, 2013, 5:26 pm

    I expect my kids to use the blended approach that I took in the late 90s (I’m 33):
    1.) Get AP credit, perhaps allowing them to graduate fro college a semester early like I did.
    2.) Get some scholarship money, by not going to your reach school, but to one that values your attendance and is willing to provide an incentive.
    3.) Federal loans – a modest amount to be paid off by them in a reasonable time frame.
    4.) Work during school for beer money and gas and pizza…
    5.) Get cheap off-campus housing as soon as the university permits it (sophmore or junior year)
    5.) Assistance from me. Yes, that’s right, but definitely not more than 50% of the total bill. Probably less than that even.
    …For reference, I’m an engineer and I’m on a plan to semi-ER in my early 40s when my house in SoCal is paid off :) Kids will be highschool and below at that point.

    Reply
    • Emmers March 31, 2013, 12:54 pm

      “Get cheap off-campus housing”

      Not all off-campus housing is cheaper than on-campus housing. My parents strongly encouraged me to stay on-campus because living off-campus would have been *way* more expensive. (For one thing, there was no such thing as a 9-month lease, so I’d have had to either stay in town all summer or eat the difference – subletting is a dicey proposition.)

      So this one is going to be highly conditional.

      Reply
      • Mrs. Pop @ Planting Our Pennies March 31, 2013, 1:20 pm

        I’m going to go even further than Emmers on this one and say that on-campus housing can be an even better deal if you play your cards right. A few weeks ago we ran a post (called The Best Job For College Students) where I went through the time costs and monetary benefits that I got from being an RA in college (where all of your food and housing are covered tax free).
        It came out equivalent to a mostly tax-free wage of $31.50+ per hour. And realistically, a good number of those hours were spent sitting on my tush either socializing with friends that lived in my building or doing my homework while sitting in the hall office manning the phone (which virtually never rang). So actual “working wage” was even higher.

        There aren’t many other places that college students can earn those kinds of wages without crossing moral or legal boundaries…

        Reply
      • Matt March 31, 2013, 3:40 pm

        Good point. These tactics might not be applicable in the future or in a particular region.

        About college location though: My rent in Syracuse, NY was $300/mo in a 6 bedroom old victorian house. You’re obviously not going to find that in, say, NYC. Being off-campus provides a kitchen too, so now we had the option to grocery shop and eat cheaper than the cafeteria. Also available in Syracuse were plenty of part-time jobs including some good paying ones in my field. The bars were supper cheap too ($4 pitchers). What a difference this made on keeping my debt low ;) So i guess my advice is to consider these things when picking a college, because the area the college is in has a lot to do with expense… as if picking a college wasn’t complex enough already!

        Reply
  • Emmers March 29, 2013, 6:13 pm

    Eh, anecdote (edit: before I saw the addendum): My parents paid for college and bought me my first car, and I have – hands down – the highest savings rate (and savings accural) of any of my friends (most of whom also grew up middle-class, but had student loans and whatnot). This is not a coincidence; starting my adult life with no debt and a degree from a competitive university was a very real advantage for me, financially. My husband and I plan to do the same thing – to the extent that we are able to, without sacrificing our own retirement plans – for our own children.

    Context: Immigrant family that values education *extremely* highly and takes a “pay it forward” approach with children — it’s not quite communist, in any real sense, but I like to joke about it in those terms. The family is all in this together, and throwing someone out to sink or swim on their own is nearly unheard of.

    This system won’t work for everyone — I definitely admit that. Some people have everything handed to them on a platter, like I did, and they throw it all away. But it’s not an inherently bad system.

    Reply
    • breadandbutter07 March 29, 2013, 6:43 pm

      I agree! I was going to say something along these same lines. My parents have done a TON for me, sending me to private schools, providing for everything I needed throughout college, and even a few things that I simply *wanted.* While I am deficient in the value of hard work — I’ve never worked a crappy job — I somehow am keenly aware of the value of a dollar.

      I hated asking my parents for things I didn’t absolutely need, and I still feel bad accepting the things they offer (They’re planning to take my husband and me to Europe this summer! What?). They completely have the means to give me what they offer, but I think being surrounded with “entitled” children at my private schools completely turned me off to accepting my parents’ payment for things when I’m capable of handling it myself (or know that I don’t need the luxury of a European vacation).

      My husband and I work hard and save hard, and I don’t know what childhood experience has contributed to my naturally frugal mindset, but I’m thankful for the opportunities my parents gave me, and for the debt-free adulthood I can now have.

      Reply
      • Emmers March 31, 2013, 12:58 pm

        Hee, I definitely worked a lot of crappy jobs! I do think there’s value in that — whenever my cushy white-collar job gets annoying, I just remind myself that at least I’m not developing miner’s lung or whatever the fuck it was that cropped up when I worked in a shipping facility (from all the paper dust). :-D

        Crappy jobs have their place, and should be encouraged (during summers) to provide *context* to that degree.

        I went to all public schools, so I didn’t have *that* much exposure to overly entitled people, but neither did I really know anyone who had grown up poor until after I graduated and my circle of friends expanded. It was…pretty enlightening. Suddenly I was meeting people who *didn’t* have their own savings account (from their summer jobs) because they had to spend the money they earned to buy food and clothing, because their parents didn’t earn enough for them.

        I guess life’s just complicated.

        Reply
    • Mark March 30, 2013, 7:04 am

      Hmm … I was in a similar situation. However, I don’t really agree with the idea that the parents should pay for the kid’s tuition. Just imagine a scenario where a family has 4+ kids. Is it easier to pay for one person’s tuition (myself) or the tuition of 4+ people (the kids)?

      Reply
      • Emmers March 31, 2013, 1:00 pm

        Yeah, I definitely had advantages as an only child that aren’t available to everyone. In a situation where you have 4+ kids, I think the best way for the parents to proceed is to say “Hey, look, we’ve saved this much, and we’ll help you in X ways, but our reserves aren’t infinite.” (For example: letting kids live at home during college, if they go to the local university, to save money and take out less in loans.)

        The most important thing is to be *honest* with your kids, and don’t let them think (or assume) things that aren’t true.

        Reply
  • Aaron March 29, 2013, 8:57 pm

    So true, I wish my parents had forced me to fend for myself a little sooner. It would have meant being out of debt at 22, rather than next year at 26, and I would’ve had the opportunity to start investing in that awesome bear market. Here’s to another 8 to 10 years of work.

    Reply
  • Karl Katzke March 29, 2013, 10:19 pm

    My first job was as a “fry chef” (yes, in 1994, they still called it that) in a fast food restaurant that my aunt co-owned in suburban Chicago. I showed up at 5am to peel and cut 50 lbs of potatoes into french fries. Partially because of the money that I made then (which I never saw a dime of, or so I thought…), my parents paid my way through college. At a junior college followed by an urban state school. The junior college cost $520 per quarter. (Yes, in the late 90’s.) The state school cost $8,200 or so per year. (Yes, in the early 2000’s.) I got a degree in Business/Logistics, partially because that’s where the fickle pencil of fate (dropped from two feet above the college catalog) landed and partially because it’s the only thing in the entire catalog that seemed interesting.

    Frankly, I didn’t deserve anything better. My high school counselors told my parents that I should go into the military because it -might- teach me a thing or two about discipline. I’m fairly glad my parents ignored them. There are students who deserve to be amongst the smartest in their field. I work for one of them, and he literally amazes me on a daily basis with the clarity of his vision. He sees straight to the heart of every problem that we have, and asks a question that always leads straight to the solution. It’s like working for a man who is also a guidance computer for a ballistic missile.

    People like him deserve to go to MIT or Stanford or a small private school in the midwest. (The latter of that list being his alma matter.) People like me, if we even need a degree (and we don’t, I’m essentially a digital mechanic or plumber, and I long for the day that my career is regarded as an honest blue collar career) really don’t. Thankfully, my parents recognized that and sent my sister and I to appropriate schools. But college marketing is pretty much designed to upsell parents into sending their child to an inappropriate school, at which the student will learn how much alcohol they can consume, how to wash cheetoe stains and grass stains out of the same item of clothing, and other scientific factoids. I learned that in junior college.

    Money Beard Lessons: (man, I should start a blog… I can’t grow a mustache for the life of me, but I definitely have a beard) … Teach your children the value of labor early on, make them contribute to their own college funds so that they’ll feel the pain of spending it (and you get to call them up in the middle of the night after writing another tuition check, and say “Hey, remember that summer that you came home with no arm hair because fry grease?”), and send them to appropriate schools.

    Reply
  • Spencer March 29, 2013, 10:48 pm

    This reminds me of the chapter in the “Millionaire Next Door” which discussed how first generation immigrants scrimp and save and retire wealthy but they give their kids everything they never had. The kids then grow up without understanding the value of the dollar and quickly degenerate to average American levels of consumption and debt. Very sad. If only more parents could instill the virtue of working and saving for things, maybe the housing crunch and impending student loan debt crisis wouldn’t be as bad.

    Reply
    • Emmers March 31, 2013, 1:06 pm

      Hey, not all of us! :-D

      Reply
  • Andy March 29, 2013, 10:50 pm

    Some of the most useless kids I’ve known or grown up with had trust funds. In fact I’m not sure I know a single one who did anything with themselves. I’m in my early 30’s and some of them are dead already…

    Reply
  • Pete O March 29, 2013, 11:54 pm

    Great post MMM.
    One point that I would like for readers to consider is the possibility of having the military fund your kid’s education. I am one of six brothers, and all of us had the priveledge of going to college even though we were lower-middle class. What made this possible is that 4 of us joined the military (including myself).

    The Montgomery GI Bill just keeps getting sweeter and sweeter. I graduated from college with a Bachelor’s degree in molecular biology not only with zero debt but with a $14,000 surplus (yes the deal really is that good and I really had that much left over when I finished). This all happened when the state of California was slashing education budgets and tuition raised by 33% in one year. But because the VA pays for tuition in full at any public university in the country, it does not matter how much it raises. All of my fellow students would protest to the state government but none of it ever affected me.

    In short, if you are looking for a way for your kid to take more responsibility for the costs of education, the military (although not for everyone) might be worth looking into. My parents never had to spend a dime on my college education.

    Reply
  • totoro March 29, 2013, 11:58 pm

    Good post.

    In retrospect, I learned many skills from being poor, but it was more difficult than what I want for my kids. It can be as wasteful as having too much to not have enough support for a child.

    This doesn’t mean I’m going to pay for everything, even though I could. That is just a path geared towards lack of personal investment in decisions imo.

    What I am doing is starting early with options and experiences. Both my kids are introduced to mentors who share their interests and are in careers that they may enjoy.

    As far as the mom taxi and expensive gadgets and clothes… my take on the first is live somewhere walkable/bikeable. My kids walk or bike everywhere they can.

    They do have expensive gadgets though like a Wii and PSVita. They ask for money for them for christmas and birthdays and usually buy second-hand online.

    My kids also have cell phones, which are convenient given we do not have a landline, but not necessary. They pay half the cost from their allowance and they do chores.

    I have one child who cares about clothes a lot – the rest do not. He saves money to add to the clothing budget and will get a job soon partly for this reason. It is important to him and it was to me when I was in school too. I couldn’t care less now though, but I still remember that it was a big deal to me once.

    My older son will go to another country for a special sports camp next year. It is $4000 and he has to raise more than half himself – we’ve committed to the other half as a maximum and preferably less. There are a lot of mandatory and voluntary fund raising activities with the team. He has participated in them all and is half-way to his goal already. It has actually been a very good thing to do this with him. I look at post-secondary the same way and would expect the same effort.

    Reply
    • KB March 30, 2013, 12:29 pm

      Awesome! I have read tons of personal finance books and have a handful of blogs I love to read. I thought I knew so much but honestly what MMM writes and readers like you are a little different and have a refreshing spin on pf.

      Reply
  • Maverick March 30, 2013, 4:04 am

    Here are some skills you should learn from school, your parent, older siblings, or others around you:
    – at a minimum, master geometry for designing things around the house like decks
    – budget and create a financial plan
    – be able to change a flat, brake pads, spark plugs, etc.
    – sew a button, thread a sewing machine
    – cooking
    – how to use hand tools, a table saw, design wood projects with pocket screws
    – know how to use a multimeter
    – Be able to wire a three-way switch
    – Solder iron, then gas torch, then wire welding
    – be able to sharpen a mower blade with a grinder
    – NEVER stop learning

    Reply
  • Melissa March 30, 2013, 10:10 am

    My parents were unable to help me with college. My dad was denied health care coverage all of his life due to a childhood illness…fast forward to 2 yrs before I attend college. My father gets cancer, parents lose every dime they’ve saved for their retirement on hospital bills, father dies leaving 50 yr old mom with no savings, $300K of hospital debt, and two kids. Because in the United States, illness can completely bankrupt a lifetime of savings. Luckily I was frugal anyway, bought my own clothes etc once I started working, and had saved what I could for college. Was I green with jealousy over my friends’ parents not only paying for college but sending them money for beer too? Yep. Was I really, really hungry in college? Yes. I paid for a shared apartment and college costs, then had little left for food. But this set me up with a healthy regard for saving. I will help my kids with college, but I won’t pay for it in full. As long as they’re working, I’ll help. Where going to college was one big party for my friends, for me getting an education was miserable. I hope my kids enjoy college. I’ve instilled in them a healthy desire to save, and the eldest appears to be doing well with no debt to date while he works and goes to school.

    Reply
  • Diana March 30, 2013, 11:10 am

    Wow, the timing of this post could not have been better. I’m in the middle of a family crisis right now. My parents did well financially and I picked up my Mom’s frugality, but my sister picked up on the finer things in life and being supported by my parents. She’s turning 40 in a few weeks, lives in my parent’s house expense-free, and has spent the better part of the last decade jumping from one temp job to another. Mom’s in the final stages of dementia, so I’m focusing on her for now, b/c she’s the priority. Meanwhile I suspect unemployment finally ran dry, so my sister began helping herself to our Mom’s bank acct. There’s an investment account, but a trust was signed when Mom was already mentally gone, essentially gifting all that cash to my sister. My Mom’s assets are now being squandered by a spoiled child. This is what can happen if you give your kids everything and they never learn to live life on their own. This is also a cautionary tale for all families to get their finances in order well before old age sets in. Money & family don’t always mix well!

    Reply
  • Dee18 March 30, 2013, 1:43 pm

    A great article. My daughter is a sophomore in high school.Looking back, there are things I am happy I did, and things I wish I had done differently. From the start, thanks to the influence of a dear friend, I was given or bought used, like-new items, and passed them on a couple years later. We didn’t have a t.v. until my daughter was 7, and then it was kept in the closet during the school year, except for the Olympics. When she was about 13, I left the t.v. out, as we began watching movies and sports together–we never had cable. Now I somewhat regret the tv as I think it warped her expectations about material goods. Other home entertainment is hard fought games of scrabble, Chinese checkers, etc and art projects.I postponed internet until two years ago when it became critical for nightly homework. Before that, we used library wi-fi. We always traveled, mostly inexpensively, often camping, with a splurge to Paris last year. We made weekly trips to the library her whole life. And we began bike riding together when she was 6 (trail a bikes are wonderful!) I now provide a modest allowance ($10/week), but my daughter must pay for her own phone, meals and movies/concerts out with friends and most of her clothes (with many gifts from Grandma and childless Aunt). She found a $20/month unlimited texting phone plan and for Christmas a year ago I gave her a used blackberry. She is going to a prom this month. I am providing $30 for it, and a dress bought for $20 from the Anthopologie clearance rack. She will be spending an additional $30 of her own money to go to dinner, etc. She earns her spending money babysitting.

    The sad thing is: she feels poor, largely because several of her classmates are super rich (family net worth well over $10M). (I am a SWAMI, with a 1600 sf house and an 8 year old Honda. I have all the stuff I need and I am lucky to live in the world’s best library system. If I inherit a bunch of money, I am going to recklessly splurge on a new prius.) She was thrilled with her Christmas gift of a graphing calculator until her best friend sent her a picture of her new Honda CRV. I hope that once she gets past these teen years, she will feel “rich” with a reasonable income and net worth. I hate to see her covet insanely expensive purses, cars, etc.

    College is looming and I am frustrated that people (including my brother in law) keep telling her not to worry about the cost and just go to the best college that admits her. I have informed her of her college fund ($76,000) and tried to explain why I will not take out loans (or use retirement funds) to send her to a more prestigious college. She is hoping to get merit scholarships, but I have learned that with her test scores at 85-90th percentile nationwide she will not qualify for merit scholarships except at the instate public schools (despite having all A’s, loving science, and learning three languages). Do not kid yourself that if your kid is smart and hard-working she will get merit scholarships!

    At the program my daughter’s high school held about college, they emphasized all the ways parents could get financial aid for their children. As most students at this school are middle class or higher in income, most of this aid would be loans. I have concluded that the best thing we could do to keep college students and their parents from going into ridiculous debt for college is to rename financial aid “college financial debt.” Let’s call it what it is…and avoid it.

    Reply
  • John March 30, 2013, 4:49 pm

    Totaly agree children need to learn to work for what they get! I’m 69 and still live below my means and enjoy retirment. really enjoy your articles!! John

    Reply
  • Taryl March 31, 2013, 12:39 am

    What a trigger for comments!!! I paid for everything I needed by babysitting until I was 16. Then I worked full time in a small private rest home thru high school. I changed adult diapers, fed mush to catatonics and washed adult cloth diapers to save for college. Eventually I got a job as a “girl Friday” in a law firm and 35 years later I’ve been a legal administrator, making more than some attorneys. I’ve loved every minute of my journey and thank the universe every day for the adventures I’ve had. And there have been many.

    Please don’t deny your children the Experiece of a Lifetime by subsidizing a 2013 lifestyle.

    Reply
    • SZQ April 9, 2013, 3:45 pm

      AMEN to that!!!!

      Reply
  • Tracy March 31, 2013, 6:16 am

    I love this post. :-) My first job was picking raspberries; starting in the frigid early morning freezing cold and transitioning to the baking hot midday sun. I back-calculated once that the average pay was about $2/hour. I think we might have been all the way up to 5th or 6th grade at the time. I hated it. Every job since then has been absolute gravy.

    Regarding paying for school and things, my mom came up with a compromise that I think is helpful. When we bought our first cars, she said that although we were responsible for insurance, taxes, drivers license fees, etc…. she would pitch in 1/2 of whatever we managed to save for a car. I thought that was fair: we were still expected to work for the first half, and in return she got to watch us drive a car that was only 1/2 as much of a death trap as we might have had otherwise. (This was 1st car only–if we busted it, it was our job to pay for it, and if we wanted a new one, the next was all on us.)

    I think that if I ever have kids, I *might* go a similar route for college costs. I think it’s really important that you have some “skin in the game” such that you say that you are willing to put your own money up for something. If you aren’t, it’s not worth it to you; why should it be worth it to me?

    Reply
  • Chipamogli March 31, 2013, 8:20 am

    Another immigrant family here… in our original country my parents saved hard for the move and lived below their means. I was often angry at them for being cheap… for living in an apartment instead of a house like all my friends, for not having cable TV like all my friends… so I can relate to the people above who mentioned how much kids want to fit in. I couldn’t care less what people think of me now, but as a child I desperately wanted to be like my peers.
    When we immigrated we also lived below our means.. I remember being embarrassed of bringing friends home as our home was much more modest than theirs.
    I am now a very independent and self-motivated person, however my brother is not. We both paid for our own tuition, but my parents had to kick him out of the house in order to get a (real, full time) job. So it’s a combination of nature and nurture…

    Reply

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