Posted by Tim Stobbs on February 8, 2013
I was reading a comment on a website the other day about the fact they would never tell their kids their net worth. Which of course to me sounded odd, but then again I do publish mine online for strangers to read.
Yet it did get me thinking, how am I going to explain to my children when I finally retire that Daddy doesn’t need to go to work anymore? According to my plan that would be roughly when the kids will be 14 and 12 years old when this will occur. I’m somewhat tore on the idea of how to approach the topic, since on one hand I do want to be honest with them, but on the other don’t let them think they are rich (My wife and I may be, but they won’t be).
I think the approach used will change based on their ability to understand the numbers or not. I do think I will explain the basic concept of we lived below our means for many years and saved the extra money. After we invested the extra money it began making its own money. Once our invested money made more income then our current spending I didn’t need to go to work anymore unless I wanted to. From there I’ll likely just answer questions.
Yet for now I don’t hide our conversations about money. It’s just something that Mom and Dad talk about in front of the kids. Besides when I comment to my wife that our investment accounts are nearly $200,000, the kids never made a comment. To them it was only a number and frankly they don’t have any context for it.
I think it helps that we never argue in front of the kids, instead we endlessly debate things. So they are used to hearing bits of conversations on ethics, social policy, government debt, social dynamics….well just about anything that either one of us reads during a day. So money really isn’t a taboo topic in the house which should help with things when I do have to sit them down and explain: Daddy got a new job as a private wealth manager…for my wealth.
So would you tell your kids your net worth? Why or why not?
Posted by Sheryl on August 29, 2012
This is a guest post from Sheryl in Ontario, who is 40 years old with a grown daughter, and is trying to rebuild her retirement dream just 20 years too late for early retirement.
** Disclaimer** I know everyone has their own parenting style, and strong feelings about how a child should be raised. I am not the perfect parent, but I am sharing what I did with the hopes that it will help someone else, not to advise anyone on what they should do. We all know our own children the best, and what will work in your situation.
My daughter is not an emotional type. She, like me, is an INTJ. She speaks when she has something she feels is of value to say, and gets very annoyed at idle chit-chat, meaningless drivel, and words that have not been thought about before spoken. Yes, she was a pleasure to parent (said with heavy sarcasm). She rarely acknowledges if she is pleased with something major I have done for her, and if she does, it is a few years after the action. When she does “thank” me, it is more said as an approval than a direct thank you. For example, when she was going through chemo in her mid teens, I didn’t dote over her. I was there if she needed something and asked for it, tried to make life easier for her without being obvious, but also didn’t “do everything” for her. It was hard for me not to over-mother her, but I believed that one of the best things I could do was keep my home running as normal as it could. If she wanted something to eat or drink, and was able to do it herself, she did it herself. No special treatment, breaking curfew or buying special things just because she had cancer. A few years later she told me that was the best thing I could have done. It kept her going, she knew she had something solid to cling to when the effects of the chemo were especially horrible, and gave her a chance to feel normal when everyone else was treating like she was sick.
The latest approval came about how I handled money with her. I didn’t get any lessons as a child about money, other than “Here’s 50 cents, make it last the week” and then we would go to yard sales and the local market that had a
bulk candy store. By Saturday night, my money was gone, I’d have some trinket from a yard sale, and empty bags that had held candy from the bulk store. Saving only happened if I got money for my birthday, my mum would take me to the bank and I’d deposit it in my savings account. In hindsight, I was taught to spend all I had, and only save if I got a windfall, not as a regular behavior. I wanted to do better with my daughter. I’d read about things like ” kids have to have enough money to budget in order to learn how to budget”. As a point of reference, when I was getting 50 cents, a chocolate bar cost 35-40 cents, and my “allowance” went up about the same as chocolate bar inflation.
The summer before she went to high school (she turned 14 that September), I implemented a new allowance system. I feel as a parent it is my responsibility to provide clothing, shelter, food and some comforts to my child, so the system did not make her work for her base allowance. I figured out how much money per year I spent on clothes, school supplies, minimal spending money, toys, and impulse purchases. I divided that amount by 12, and gave her that amount at the beginning of every month. She was not allowed to ask for impulse purchases when we went out anymore. There were things I said I would continue to pay for like school trips, friends birthday presents, horse stuff, and other irregular expenses. She had the option of doing extra work around the house to earn more money, those paid about $5/hour. The first few months, she bought $100 running shoes or other teenage have to haves, but she soon learned that if she did that, she didn’t have any more money for the rest of the month. She started going to outlet or thrift stores instead of the mall, renting videos instead of going to the movies, comparing prices on supplies. Soon, she started having money left at the end of the month, and would save for larger purchases. I stopped giving her money when she started earning more at her part time job than I was giving her.
Now, she is a careful shopper who only spends what is needed. She has no debt. In a conversation she had with me the other day, she was appalled at the amount of money spent by an acquaintance of hers for a prom. She talked about the attitude of consumerism and entitlement and expressed concern that the person wouldn’t do very well on their own with that mentality towards spending and money.
I’ve brought up the topic of saving enough to achieve FI, but she’s not there yet, and knowing her, that’s something she will have to discover for herself (if I leave enough information lying around). I feel that I have at least given her a chance to not end up like so many other sheeple: consuming and spending with no end in sight. I’ve changed the habits passed from parent to child. I’m proud she dares to be different, and if she ever reads this, You’re Welcome.
Posted by Tim Stobbs on June 1, 2012
It started with some noises: swish, thud and then a cry of pain. Then I had a crying pre-schooler in my face saying between tears “He hit me!” To which his older brother replied “Because he hit me first.” I then comforted the crying one and then both gave them ‘the talk‘ on hitting…again. For most parents with two or more kids this is a familiar scene, heck, even if you don’t have kids most people have seen a similar clip at some point.
Yet strangely enough adults do a similar behaviour all the time and there is no talk. It starts with one person buying something new and ‘cool’. They talk about it at work and show it off. Then other people start buying the same thing, yet no one says “I bought it, because he did it first.”
Pardon? Really folks, just because someone doesn’t say it, doesn’t mean the behaviour isn’t just a pathetic sounding as when kids do it. What are you mindless worker bee following orders or a grown person with your own mind?
I occasionally wonder if consumerism shouldn’t be classified as a disease since those who are infected tend to spread it around to others. Then occasionally someone seeks treatment by cutting up their credit cards, using cash in jars and paying down their consumer debt. For at a while, until they hear about a friend’s trip to Cuba, then they break down and put a few plane tickets on the credit card and get infected again.
Yet in the end, I suppose I just really don’t feel that pressure like others to spend to their level. Does that make me immune to consumerism? Or am I just nuts? Perhaps, honestly, a little of both.
I think major difference between me and other people is I’ve seen the long term results of people living those lifestyles and it isn’t anywhere I want to be in life. I can project the results of my choices now into the future so I understand the full cost of my actions. Yes, I could eat a donut every day and a coffee for breakfast, yet I don’t want to be fat and have less money for my other goals in life. I refuse to live in the extreme poverty to just save more and at the same time I won’t spend all that I earn (or perhaps more realistic more than that). I’ve found my own little hilltop of enough, and I’m not particularly interested in climbing someone else spending hill or mountain.
Does that make me right? Hell no, it makes me comfortable with my choices in life. Being ‘right‘ assumes there is a specific answer on what is the right way to live. There is no ‘right‘ way, just your way. So don’t be sucked into “He did it first”, instead be “I did it” and accept responsibility for your choices. After all being accountable only to your own head is somewhat refreshing in a world of consumerism.