224 comments

The Incomparable Advantage of Having to Work for what you Get

partytime

“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?

  • 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.

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  • 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.

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  • 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!

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  • 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.

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  • 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!”

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    • 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.

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  • 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.

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    • 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.

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      • 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…

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      • 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!

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  • 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.

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    • 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.

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      • 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.

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    • 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.

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  • 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.

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  • 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…

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  • 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
  • Jen March 31, 2013, 7:39 pm

    I remember once talking to a colleague of mine, who said that her parents spent $200K for her fancy college education. I was thinking to myself – my parents did not spend a dime on it, I went to a far less fancy school on a scholarship, and look – we both ended up at the same job earning the same salary at the same age.

    Reply
  • Cline April 1, 2013, 5:07 am

    In the subject of paying education, “The Millionaire Next Door” is an interesting read. Statistically points out that those that are best at accumulating wealth only spoil their kids with education.

    My parents had me when they were a little older (i’m now 52)so I saw that they and their friends who were kids in the Depression and were in WWII really knew how to survive and what was really important. Now I see the third generation from that group and the lifestyle is beginning to be water downed.

    I raised my kids pretty much as I was raised, they thought we were poor since they didn’t get the stuff other kids did like a new Jeep when they turned 16. Now I’m happy to say they are adults living (for the most part) responsible fiscal lives.

    Reply
  • Tony@WeOnlyDoThisOnce April 1, 2013, 5:33 am

    As a guy with 2 small kids, this post resonates with me big time! My parents were very frugal, but they never taught me about what they were doing! I grew up not knowing anything about my parent’s finances or philosophy of money…not good.

    As far as college is concerned, it is super important to not limit exposure to great education. We have no idea where our kids will travel in their educational life. Take me for example…I ended up playing trombone really well and I got into Juilliard. I don’t care what you say…if your kid gets into Juilliard YOU SEND HIM/HER THERE!! By the way…it’s expensive.

    Save the college funds, people…

    Reply
    • TLV April 1, 2013, 11:17 am

      As a contrasting anecdote, my grandfather was accepted to Julliard (organ) but decided to go to a different school and major in chemistry, because he didn’t think he’d be able to support a family with a career in music.

      [/obviously biased because I wouldn’t be here if he had gone to Julliard]

      Reply
      • Tony@WeOnlyDoThisOnce April 7, 2013, 7:07 am

        Just saw this response. Not sure what to say, except there are thousands of people (me included) who graduated Juilliard and went on to make a lot of money and carve great careers out. Even organists! The fact he felt he couldn’t support a family was more of a fear than a reality. You very well could still be here :).

        Reply
  • Darrow @ CanIRetireYet? April 1, 2013, 8:48 am

    Lots of wisdom here. As the parent of a self-sufficient 22 year old I can vouch you are doing your kids no service by insulating them from the real world, especially when it comes to making and spending money. Our society is filled with indulgent parents, boomerang kids, and kids being raised by grandparents because the real parents haven’t grown up yet.

    It’s true you’ll go through some tough times by insisting your kids pay their own way, but the end result — an independent human being and a strong relationship, will be worth it.

    Nowhere is this lesson as important than in higher education. Taking on debt for an expensive college education/lifestyle with no marketable value is financial foolishness. An easy fix for that is insisting your kids carry most of the load and pay as they go.

    Parenting is primarily about listening, backup, insurance, and cheering IMHO. Listen to MMM.

    Reply
  • Mr J April 1, 2013, 12:39 pm

    Been reading the site for a month or two now, and I thought I would share.

    I look back and realize that I was lucky to not be given everything by my parents. I did appreciate being given an old 87 Chevy Cavalier back in high school and had to pay for gas and repairs.

    When it came time, I had about $3000 from my parents towards education which I used to go to a local university in BC. I was lucky to live close and so chose to live from home with mininimal expenses. I took a full course load in computers and worked part time to help pay for tuition and books. In the end finishing with only $12,000 or so in student loans, which made it a lot easier to pay off the debt and start saving.

    Having a small brush with debt early on helped me to avoid larger debts later on.

    While still paying for university classes, I decided that I needed to get a new shiny snowboard and boots with my brand new Mastercard. I had a lower paid minimum wage job, and soon discovered that racking up a $700 balance on a credit card was not such a good idea.

    I was only getting a few hundred or so every paycheck (rent free, while still paying for books, living, etc), and it was an eye-opener to see the interest charges adding up. It took quite a lot longer than I thought to finally pay off the balance due to the wondrous effect of compound interest and close to the minimum payments amounts.

    This definitely woke me up to the perils of overspending, especially on credit. It was frustrating to see how little the payments reduced the balance with high interest added on top.

    It’s been quite a while since then, and I’m just starting down the FI journey with mostly cash, but not a lot of investments.

    Keep up the good work and for being an inspiration to others!

    Reply
  • Dan April 1, 2013, 3:19 pm

    Hello, I have to disagree with many of the assumptions of the average American family that MMM makes. I think the problem is you have worked with only the upper middle class of American society. I grew up as the youngest of five who’s parents lost their house due to non payment, rented, and had fewer privileges than you had along with a father who died of cancer at age 17 and a mother with no means to support herself. So not paying for my kids college, even though I received substantial government handouts for mine (one of the advantages of being poor in a rich country) makes sense to me. My wife comes from a totally different background, but definitely more middle class than the type of income level we have. Where am I going with this? I agree with MMM about kids and not spoiling them. However, most of America does not grow up spoiled by parents who want to shower gifts and money on them. Unfortunately, a few do.

    Reply
    • FI Pilgrim July 3, 2014, 9:12 am

      Dan, I agree with your point here. I didn’t go to college myself (I work in the IT industry) but both of my parents did. They would have been fine helping to pay for my education if I had proven that I had a plan for how I was going to spend their money and what I was going to get out of it, but I think they wisely waited for me to “get a life” before they sunk that kind of money into higher ed. They knew what a waste that would have been, both of my time and their money.

      I guess the bottom line for me is that there are many responsible ways to add value to your children’s lives through money, but by and large people don’t put enough thought and purpose into what they are providing.

      Reply
  • anonymouse April 1, 2013, 8:32 pm

    Living in a city definitely helps kids have their independence: when I started high school, my family move to NYC, and my parents never did any taxi duty, instead I got a monthly $63 for a MetroCard, which let me go anywhere I wanted within the city. Eventually, I convinced my mother to give me a year’s worth of Metrocard money all at once so I could buy a shiny new bike, which got me to school even faster than the subway. I got an allowance to buy school lunch with, though my friends and I quickly figured out that we could get more bang per buck (or calories per dollar at least) by going to the local 99 cent store and stocking up on expired pop tarts. There were also occasional gifts too, either of cash or some fancy new electronic gadget, for birthdays. I got over my gadget obsession pretty quickly, though, and after that, I started viewing my electronics purchases as capital investments. I ended up saving up a year’s worth birthday cash and earnings from various odd jobs to buy my very first laptop computer for a whole $1400 of my hard earned dollars. I went to the store with a literal wad of cash, and then I used the hell out of that laptop until it died three and a half years later. On the whole, it turned out to be a pretty worthwhile investment.

    Reply
  • Kate April 3, 2013, 12:21 pm

    In general, I agree with your post. I had to work for a lot of what I had as a teenager, and now I am a financially responsible adult, unlike many of my peers. But… I also have a trust fund. I can’t use it for another 12 years except in certain circumstances. When I was a freshman in college, I was diagnosed with an autoimmune disorder and the only treatment at that time was not FDA approved, so our insurance would not cover it. My trust paid for the $60K in drugs. But for the trust and my grandfather trying to take care of his grandkids after his death, I would have had to drop out of college and likely wouldn’t have been able to work at all and become successful.

    As an aside, I find it ironic that you’re advertising for St. Jude’s on the same page where you’re advocating not leaving a legacy to protect your family. There’s a huge difference between fueling your kids’ Apple addiction and leaving behind a well-structured inheritance.

    Reply
  • Christina April 4, 2013, 11:06 am

    Love, love, love this MMM! Said so well, I feel like I was reading my own philosophies. We sound like we were raised by very similar smart parents. I am trying to do the same with my three children, bucking the trend to hand our kids everything on a silver platter. Our nine year old gets $5 every other week, and has to put $2 away in savings, $1 to charity, and gets to spend or save the other $2. (took him nine months to save for a Lego Creationary game but he did it!)
    We don’t do electronics (one family computer will suffice for now), and hubby has cell from work… Our playground is outdoors, and bike-able weather is coming up! (Ottawa winters!)
    We are doing an RESP, I had to do loans to put myself through under-grad, and just finished paying that off…not fun! so we do intend to help our kids out in that regard…
    Thanks for continuing to share your wisdom, and also your encouragement!

    Reply
  • linda April 4, 2013, 11:53 am

    My 5- and 7-year-olds “built” a “boat/ship” out of cardboard, scotch tape, and white paper about 3 weeks ago, which went to recycling about a week later. I thought it was awesome. Just today, they were missing their boat, and asking me when they can build another boat. I said the next time we come across a cardboard box. They were totally excited!

    They had so much fun when they were able to make something using their imagination!

    Last weekend, when we went to a relative’s house and played video games, that excitement only lasted about a day or two.

    An important lesson that I learned from reading this site is that sustainable happiness has to come from within. Happiness that comes from things is temporary.

    Reply
    • FrugalCdnEliz March 21, 2014, 9:04 pm

      Thank you so much for this post, MMM. It has made my day (week even) to read it.

      I grew up with three siblings in a single-parent household. My mom worked very hard to keep us afloat. We felt spoiled as we each got a bowl of chips and glass of pop on Friday nights (for “Dukes of Hazard” :). There weren’t a lot of frills but that instilled in us frugal natures and gave us the extraordinary gift of appreciating every small luxury in our lives to this day. It also taught us the value of hard work as we all had jobs from young ages.

      As to the paying for education debate, I just wanted to add that I personally took a lot of pride in managing and paying off (in record time) my student loan. I lived frugally, worked through school and had some parental support but incurred ~$26K in debt in professional school. Making the last payment was one of the proudest and happiest days of my life.

      Thanks, MMM for the gift of this article. I’ve just found this blog and I’m so grateful – it’s wonderful!

      Reply
  • Rebecca April 5, 2013, 7:46 am

    I love this! I read something my grandpa wrote back in the 1960’s describing his childhood in the depression and how hard he had to work (esp. after his father died when he was 11 years old). He had to work to help pay the bills and for food. He would give his mom all the money he earned at the end of the week and she would give him back enough to go see a picture show. At the end of his writing he wrote “my son was robbed of this glorious experience. Our position in life is not desperate! But we made Johnny work for everything that he really wanted. I tried to teach him a few of the lessons that I learned but it is very difficult for someone to experience the hunger of the depression years in the affluent 1960’s” The thing is because he made my dad work for what he wanted he is not wasteful with money and this lesson helped him live well his entire life. I will do the same with my children. I totally agree with you. It may seem like we’re helping our kids by giving them what they want all the time, but it’s only hurting them. Of course, I do agree parents need to be there to be the back up, but I would rather spoil my kids with love and time together than things.

    Reply
  • Dawn April 5, 2013, 8:42 am

    Hi MMM!

    Im stuck with exceptions to the rule. I had three kids at a pretty young age, and until the 3 years, we all lived very frugally, sometimes to the point of poverty. Even now with money Im still very careful, clipping coupons, gardening, canning ect. My mom though, exact opposite, money burns a whole in her pocket. She cannot save and she definitely and always had champagne tastes on a beer budget. It sounds terrible but we try to avoid her as much as possible, she has a bad temper too. The interesting part is, that what Ive instilled in my kids, which is everything! They still are materialistic. My son is obsessed with brand name shoes, he doesnt have any except from hand me downs from his older friends. My middle daughter has to wear super nice clothes, not branded but pretty and my oldest is just lazy. We dont have cable, they do have a game console. No cell phones, which a lot of my friends make fun of me about. Chores, they do know how to do more than most kids, they can bake better than I can! They do get the ride to and from school, but they also know and have to take public transportation. The do earn money, from random jobs. And ive resorted to taking half, to save for them, because they spend it. And I tell my oldest, all the time, that she needs to figure out something soon, because Im not having a 20 year old living off of me.

    I try to be the biggest influence in my children’s lives, and I know, seen it in their actions that I have, but society sucks! They dont have the strong friendships that I had growing up, its all about quantity on FB. 4th graders have cell phones! Ive sat in on my sons class and they dont even take turns reading out loud anymore, its audio follow along from an overhead and ipad. My daughters track coach spent more time on his cell phone than cheering on his students.

    What is a person to do?

    Reply
  • SZQ April 9, 2013, 3:36 pm

    This is EXACTLY what I continually tell friends, etc. (the ones who will listen!) I am one of 8 children – and the way you grew up, MMM, is EXACTLY the way we were raised and we ALL turned out fine! We went to college the way you mention (working PT jobs, sometimes several) and taking out small loans when necessary. The problem today is that folks today and letting their kids be involved in EVERYTHING (sports, extracurricular activities), which leaves no time for part-time jobs. So the parents end up footing the bills for everything. But I have to say, my one brother is a physician (put himself through medical school by working several PT jobs), has 5 boys, and they have given those boys everything. Which is turn has not motivated them in the least. It’s really disappointing to see. Sometimes my 80-year old mom will say “I wish we could have done/given you kids more when you were younger” and I say “Are you CRAZY???!!! Because you didn’t, made us responsible young adults – working, showing up on time, managing money, etc. It was THE BEST thing you and dad could have ever done for us!!” We had a great childhood with parents who were involved with us and our jobs – we ate dinner together every night. Dad usually carted us around to jobs or helped when we had paper routes. We will all be forever grateful for all they DID NOT do for us!!!!

    Reply
  • Kimberly April 10, 2013, 8:39 am

    Thank you so much for confirming that I am NOT crazy because I don’t intend to save for my twin daughters’ educations.

    I talk with them openly about money and school and all the millions of ways you can contribute to society and get paid for it. If they want something, I ask them how they are going to find the money for it–or make it! It’s just a good lesson. I paid for my University Education and that was very educational.

    Thanks again, from Burlington, Ontario. BTW, I grew up on a farm in Ancaster, eldest girl in a family of 5 kids. Extra money? Hee hee hee.

    Reply
  • mbhunter June 23, 2013, 8:02 pm

    A four-year degree need not cost more than $20k. It does involve testing out of the first two years with CLEP exams and not living on campus the other two years, though, so it’s not the “fun” college experience. But it does result in a degree.

    Reply
  • Viv in Montreal August 18, 2013, 1:04 pm

    I’m a new reader of MMM and I’m extremely inspired and impressed.
    For years I’ve been having inward struggles with all of the concepts you propound. We used to be car-free and used our bikes a lot, now we have 3 cars for some reason. One of them is going to be gone by the end of the month and another may also be on its way to the chopping block. Since reading my first post I have had my bike out 3 times! In 2 days!! It feels great! As for how much we spoil our kids, I think we lie in the middle ground somewhere. We saved for their education, enough to go to university for 2-3 years in Quebec, where we live. Our daughter used it, our son chose to go to college for free (yay Quebec!) so we gave him the money we had saved for him and said, “Use it as you will!” He’s living on fumes apparently,(while he’s designing a video game he hopes to sell) because he still has $12,000, what with a small inheritance he received from his grandmother. He cut up his credit card a few years ago and our daughter is paranoid about running a balance. I think somehow we did something right. I totally agree that doing everything for your kids teaches them nothing and does them zero favours.

    Reply
  • Douglas Stuart Neilson September 27, 2013, 10:21 pm

    Feel the same as the post implies and do tend to live pretty fugaly. At work I have now been fondly nicknamed ‘frugal rock’ which I enjoy. Ride my bike to work and cant remember the last time I didn’t eat a packed lunch…
    Where my situation slips a bit is when it comes to my own son. He lives with his mother on the other side of the world in Germany. I am in nz.

    Though I would love to teach him the ways of the moustache and show him how I live I only get small windows of time to spend with him. I either fly to see him and give gifts -( usually expensive) or have him in New Zealand and fork out for good hotels and travel experiences and gifts. I don’t want to spoil him but find myself doing it time and time again. My rational is that I don’t get to spend the time… So I’ll give him stuff.

    I feel like a good parent despite the time and distance limits but would be grateful to anyone for tips on treating my 13 year old right with out the material excess.

    Regards Doug

    Reply
  • JT October 7, 2013, 3:30 am

    We grew up dirt poor, did extensive chores and missed out on things like going to the annual fair. BUT we had a close and loving extended family structure and I didn’t realise we were poor until later. The thing that struck me was the absolute ‘Poor Man’s Orange’ psychology of being poor. It has been quite challenging breaking that. MMM you have taught me to embrace the frugal ways we grew up with, but this time with empowerment. A humble thanks. Re education, I wonder if spoiling a young child with handouts delays their self sufficiency? I do know the odd young adult who has no student debt and they’re the ones who have worked in the summer break to save for their fees.

    Reply
  • Edith October 11, 2013, 10:46 am

    Don’t get me wrong, I think your blog is amazing. However, I’ve found a lot of the content is focused on living in the U.S.A. or other first-world countries (an euphemism to say colonialist super-powers).

    You see, my mom is a Mustachian (or was, while I was growing up), and my dad has always been pretty frugal too.They’re divorced now, and mom moved to Canada.

    I think they taught me a lot about frugality, but the economy in Mexico is not really good. Despite my education and two jobs, I don’t have access to a mortgage, and I don’t have any benefits either.

    My husband and I save money (after reading this we will certainly save more, I already gave the bad news to my cleaning lady) but here it is much harder to get ahead.

    Two years ago, when we got married, mom bought us a small house. She wanted to help us just with the down payment, because of the same philosophy you explain here, but getting a mortgage with a bank in Mexico is really expensive. It was so expensive, we would have had to pay almost half of our earnings for twenty years. So she paid it all. Knowing that, despite our unstable jobs, we would always have a place to go back to, was a relief. Without having to pay rent, we saved even more, and started investing for our retirement. It gave us confidence. It gave us peace of mind. I think under certain circumstances, and to certain kind of kids, it’s good when your parents help you out.

    Reply
  • Tim January 8, 2014, 1:36 am

    THANK YOU. I *knew* there was a way to raise children other than feeding them money ‘in order to get them into a good college’. This removes one of my biggest unknowns in planning a family and ERE. Jacob plain ignores children and I can’t bear to do that. Again, Thank you.

    Reply
  • SpeedReader February 28, 2014, 8:24 pm

    My dad was in the Army, my mom a SAHM – so you know the pay was not huge. Before my older sister started HS Dad sat us both down and said they would pay for half our college expenses. Any scholarships we got counted towards our half. Also said if we got married before graduation the money ended! We alternated paying for each quarter, so I really appreciated the work that went into each tuition payment. Worked retail and fast food, never had to take a student loan. Of course, tuition was much lower in the 80s.

    Reply
  • susie May 5, 2014, 7:03 pm

    Hi, MMM. I found your blog through Get Rich Slowly and am loving combing through all your posts.

    I would like to throw in my experience, as the daughter of an incredibly frugal single father. He taught me all kinds of lessons in how to save money, from taking the bus and walking everywhere, to recycling aluminum cans. In fact, I can’t think of one place where he didn’t teach me to be self-sufficient and frugal. As a kid I was convinced we were dirt poor. We grew up in a pretty worn-down neighborhood, always owned used cars, and frequented thrift stores. For all of the wonderful lessons that he bestowed upon me, I think he succeeded a little *too* much in his quest to teach me independence. In fact, I think his own frugality ended up skewing towards the negative from time-to-time. For example, living in a worn-down city neighborhood exposed me to some pretty unsavory characters at a very early age. Some of those experiences still haunt me psychologically. And eschewing American consumerism my whole life created a very independently-minded character that I struggle to keep in check. I have a hard time relating to peers and making lasting friendships because I can’t discuss pop-culture, or waste nights going out to bars. It seems my brain is constantly thinking about money, at the expense of all other human relationships, because I’ve watched my dad sacrifice every relationship the second they became a financial burden. Where do you strike the balance? At what point does giving a child the advantage of being independent skew towards creating a social outcast? I ask this not as a criticism, but for genuine advice. Thanks, and great blog!

    Reply
    • Mr. Money Mustache May 5, 2014, 10:46 pm

      Wow, that is pretty interesting story Susue, and I can certainly see the downside to an upbringing like that. It sounds like your dad might have been drawing the line on the wrong side of frugal vs. cheap if he actually had lots of money but was hiding it. On the other hand, if he was just scraping by, his behavior was commendable compared to the alternative of going into debt and faking a spendier lifestyle for a while. http://www.mrmoneymustache.com/2012/10/24/frugal-vs-cheap/

      And with human nature being the compulsive thing that it is, many people probably do the same thing.

      This is one of the reasons we have a pretty spendy lifestyle ourselves (fancy house in good neighborhood, best food available, trips, cars, computers, etc.) – partly just to blend in to the US culture and make things easier. Another contrast is that I rarely think about money.

      But this still allows the “work for what you get” method of child raising, and it also still allows you to consume a lot less than your average middle-class person, drive less, bike more, etc.

      Prescription: instill the values of frugality AND generosity, and throw in the feeling that you will live in a lifelong surplus of money if you work hard and invest well. But it still helps to find some non-vacuous friends to hang out with :-)

      Reply
  • Alex May 7, 2014, 10:09 am

    This is actually probably the biggest obstacle I’m going to have to fight if I’m to become a mustachian badass (as I plan to do). My parents weren’t absurdly wealthy, but they were well off, and although they themselves had a good work ethic and tried to pass it on, there was definitely a tendency to err on the side of praise and material comfort over hard lessons. I fear I’ve got an underdeveloped sense of responsibility and am a little lazier than I’d like to be.

    Like any problem, there’s almost certainly a way to solve it, though if anyone has advice on developing this particular muscle in one’s twenties, I’m eager to hear it.

    Reply
  • Boris May 11, 2014, 9:25 pm

    I realize I am commenting on this article about a year late. I agree with everything you are saying except for one issue that is specific to my circumstances, which relates to Ivy League college degrees.

    My parents gave me the “gift” of poverty in two ways. First, they had little money so they taught me to be frugal, so much of what you are saying on this blog comes naturally. Second, when I was accepted to a great Ivy League college, they had virtually no money to pay for it. Why was it such a great thing? Because, as Amicable Skeptic correctly points out above, Ivy League and similar schools do not ask parents to pay beyond their ability. Consequently, if a kid comes from a poor family they will end up going to an Ivy league school for virtually nothing.

    Now let’s suppose my kids get into an Ivy league college when I am retired. That college will look at my retirement savings and will (quite reasonably) conclude that I have a lot of money stashed away. They will demand a significant chunk of those savings. My heart will break if I am forced to tell my kids that they cannot go to the same or similar school where daddy went, because daddy is retired and cannot be bothered to commute to an office.

    Now, I know that an Ivy League school does not guarantee success. In fact, the smartest people I know went to nameless state colleges. Nevertheless, I do owe my kids the same educational opportunities that were afforded to me.

    My situation does not mean I cannot retire until kids finish college though. Here is an excellent article discussing college financial aid calculation. It’s worth pointing out that, to my knowledge, all Ivy League schools use CSS methodology to calculate aid.

    http://www.forbes.com/sites/troyonink/2014/01/31/2014-guide-to-fafsa-css-profile-college-aid-and-expected-family-contribution/

    The bottom line is that parents are expected to fork over 5% of their savings (including home equity but excluding IRAs and 401(k)) for every year their kid is in school. With four years of college this adds up to 22% above and beyond the savings necessary for one to retire. That’s not an impossible number but it does make retirement quite a bit harder.

    Again, this situation is specific to my circumstances and I cannot claim that it applies to everyone.

    Reply
    • Ben May 12, 2014, 5:54 pm

      You scared me for a moment since my plan is to pay off the house right before applying for aid. I currently have a mortgage because it is cheap money and I make more in investments, but I plan to reallocate and pay off the house once the kids are near college-age so the equity should help. Home equity counts under the Institutional Methodology, but only up to 1.2 times the parent’s adjusted gross income (AGI) under the Consensus. So if you are retired by the time your kids are in college your AGI should be pretty low theoretically speaking.

      Not sure how long you have until college years, but keep maxing out retirement accounts for yourself and spouse. 17.5 x 2 + roth iras should you give you at least 46k/year of assets that don’t hurt you.

      Reply
  • Parker June 13, 2014, 8:38 pm

    More than paying or not paying for their own school, it would be nice if young adults actually understood the costs of a university education and how long it takes to save for it or pay it back (given student loans). It is a tough time of life and I think most people don’t have the perspective (I know I didn’t) to understand that being 25 and having a huge debt is really a big burden. By understanding the costs too, it might make some people think about community college or other options. Colleges are getting proactive about debt-education, but it is a lesson that often takes a dose of real-life to really learn the consequences.

    Reply

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