WageSlave wrote:snowman, thank you for sharing, that was great reading. Would you be willing to share where you live, just out of curiosity? Though I have a nagging suspicion your experience is probably typical of upper middle class suburbia in the USA.
I have two girls and the scenario you painted scares the heck out of me. As someone who has been reading Mr Money Mustache since he started, this scene is the exact antithesis of his philosophy. Fortunately, it sounds like your daughter is well-adjusted, in contrast to many of her peers. Any tips you can share? My kids are both under five, so I (hopefully) have time to plan and prepare...
As I said before, I can't help but wonder if this environment is fairly common, and maybe it can be offset by strategic relocation. A lot of upper middle class suburbia appeals to me: generally safe, clean, quiet neighborhoods, big yards, good schools... but it seems like in your case there is a hardcore "keeping up with the Joneses" (KUWTJ) mentality that is actively being instilled in the kids. I'd argue that KUWTJ is not only the antithesis of MMM, but of Bogleheads in general (or maybe commonsense personal finance in general).
Oh boy, where do I begin! This will be the longest post ever, but hopefully helpful to you and maybe other parents out there. This is strictly my experience, not a suggestion on how to raise your kids.
It’s not easy these days to navigate the “KUWTJ” minefield, I certainly was not prepared for it. I came here 25 years ago from a poor European (former communist) country, and even there my family was poorer than most. I landed at JFK with $100 in my pocket (borrowed from my cousin), did not know a soul on this continent, and my English consisted of “Hello”, “How are you”, “Thank you”, and “My name is...”. All I had was a desire and determination to succeed. I mention this because it gives different perspective on things, vs. you or my wife who grew up here and were familiar with the KUWTJ concept. BTW, my wife comes from poor background too, but the concept of poor here vs. elsewhere on the planet is very different, as I am sure many BHs are aware of.
I think we held up OK, but it wasn’t easy; in fact, sometimes you need to make some very tough decisions. It’s extremely important that you and your spouse are on the same page all the time, every time! We live in Colorado, in one of the many upper middle class subdivisions growing up everywhere around us. We don’t have too many rich people here, but we have a lot of people with high incomes. A lot of transplants from other states, mostly from CA, who think that buying a $500K house here is a bargain.
Why did we buy here? For the same reasons you mentioned – safety, natural beauty, recreational opportunities, clean, quite, excellent schools, not necessarily in that order. Was it expensive? Yes, it was. Do we like it here? Yes, we love it! Would we have done it again if we could? Yes, without question! Are we going to stay here for the rest of our days? Nope, the house goes on the market when the youngest one goes to college.
We had a concept of how we wanted to raise our kids. You have to start early, and you cannot veer off when first headwinds arrive. If you wait till Middle school age, it’s too late.
My wife started reading to both kids from day 1, I think that made a big difference. I read them as well, though not as often as I was tired after work, but I did read to them in my language only. They knew mommy and daddy speak different language, and THAT was normal to them; when they first made friends, they were surprised both of their parents spoke English. Looking back, I think that was important fact, because it established in their mind very early on that we are different, and that it’s OK.
They loved going to friends’ birthday parties (some of them so lavish they made me feel very uncomfortable), they asked if they can have one like that too. We said no, it’s not something we do, instead we will spend a day together as a family having fun, then mommy will make you a meal of your choice, and she will also make you a really great cake! It became a tradition everyone loves to this day, although as they grew up we started having 2 b-days – one with friends coming over for a sleepover, and one just us. But we never jumped on the bandwagon of throwing big b-day parties just because everyone around us was doing it.
Instead of hiring landscaping company planting large trees and such that every neighbor was doing, I took my kids to HD, loaded the van with dirt, plants, trees etc, and than planted my garden with their “help”. I did it mostly myself, but little kids love to help and they love to play in the dirt, so we spent a lot of time in the yard planting and working together. We played soccer or volleyball or whatever they wanted to play afterwards, so they got used to the idea that work and fun can coexist. I also built a small vegetable garden for my wife, and the kids helped her plant seeds and water the ground, and learned where the food comes from (this may sound funny, but most kids these days believe food just “happens” in the grocery store).
When grocery shopping, my wife would tell them we had a budget of say $30, and we have some coupons, and we need to figure out how we buy what we need and stay within the budget. Oh, what a game that was for them – they calculated in their heads running total and other math problems without knowing they are doing math. While other kids where whining and begging for stuff, ours were solving problems. Kids love doing math, and ours got a chance to do it in 2 different languages - a bonus.
For vacations, we went camping. We love the great outdoors, and wanted to share that love with our kids. The kids love being outside if you are spending quality time with them – hiking, biking, fishing, or just hanging around. Every trip is an adventure, bonds the family together, creates positive character traits and memories, and is super cheap! Those expensive cruise and beach trips friends were taking? They were not interested – instead, they asked when and where the next camping trip is going to be. As they became older, we involved them in the planning part as well, which especially my daughter enjoyed.
They were also spending good amount of time with my relatives overseas over the summers. As money was tight and those flights expensive, they went alone. Those trips I think were very important for several reasons: 1. They grew up knowing there is another world out there, very different from theirs; 2. They now had 2 anchor points – not just the Jones’s here, but the “poors” over there; and 3. They learned financial aspect of decision-making process – i.e. this is how much the ticket costs, this is how it affects our budget, what are we willing to give up as a family; it was a financial sacrifice, they knew it, they were part of it.
In another thread, I outlined my idea of teaching them financial responsibility starting at age 6 or so – you get tiny allowance (to them getting $5/week was huge, to our Jones's it was probably child abuse), you get excel spreadsheet, you track that money in 3 categories: 25% to investments (VTI), 25% to savings, 50% spending on whatever you want. I don’t think they ever spent that 50% part; since they saw us always talking about saving money for a purchase (airfare, trees, car, clothes etc.), they naturally did the same. At about 8, when they could comprehend better, I showed them the table with compound interest, they were at awe, they said “it’s like free money!”, and I am like “yep, it is, but it requires sacrifice, you cannot touch that money for a long, long time”. They both were fine with it – now they don’t even blink when they move 25% of their earned money to TDA.
Another pressure point came from travel sports and activities – that’s where we spent IMO an enormous amount of money. I struggled with that all these years, I think it’s just insane, particularly if your child is talented and your only 2 choices are recreational league where they get bored and will quit, or travel which literally means travelling all over the country and costs you $5K+/year. I have seen parents spending $15-$20K/year/child, which really is insane! I think a lot of parents struggle with that, both financially and emotionally. We did our best to keep expenses down, but the peer pressure to spend is immense! Parents pick the best and most expensive restaurants when travelling to eat at as a matter of fact, when we would not even consider that for a special occasion within our family. Same with hotels. Stuff like that.
it does get especially hard when your kid tells you he is the only one in the locker room without an iPhone, for example, and other kids are making fun of him. At first, I thought he must be joking; he wasn’t as I found out. And what made it particularly hard for him was the fact that he had just bought himself the best smartphone he could afford to buy with his own money (our deal with both kids was if you want smartphone, you buy it yourself). It almost made me cry. I spoke with one of the parents who I knew did not have high income – he said that’s why he just buys stuff, he knows it’s wrong, but he does not want his kid to be “left out”. He said most parents do that, that I am truly unusual (gee, where did I hear that? Oh yea, my daughter). And don’t I care for the feelings and well-being of my son? My thought was – how do we, parents, expect our kids to handle peer pressure, when we ourselves are not capable of resisting it? I also learned that a lot of parents are financing these activities with HELOC, or they get financial help from their parents.
It actually gets harder with girls. Below that confident, mature skin of my daughter is a fragile human being. Girls can be very mean creatures, especially in middle school, but also in HS. The peer pressure is unimaginable, constant, everywhere. How you look, how you dress, your make up, shape, brains, boobs, shoes, phone, lunch, friends, clicks, everything! She earns most of her money babysitting, she has several clients in our neighborhood and very little competition – most girls don’t work. So it actually works out well for her. We also decided to give her clothing allowance in HS – it’s not big, but it helps her buy the clothes herself, and forces her to find bargains. She really likes this system, and so do we.
Also, as I mentioned before, none of this would be meaningful if us parents were not behaving the same way. It would not work if we were the spenders while asking the kids to be frugal. My car is 13 years old, and it’s only my second car ever. That’s very uncommon. Kids see that. They realize we sacrificed a lot for them, and they clearly appreciate it. Our son, now in college, told me he is really glad we raised him the way we did, so that’s the ultimate reward you can get as a parent. He already has a plan, he says, how to raise his future kids to be good people and hard workers – he says “the key is to know to say NO, and stay firm, while giving them unconditional amount of love”. I told him sounds good, you just need to marry the right person, but that’s a different topic.
Could we have avoided KUWTJ by “strategically relocating” to a different area? Not sure, probably not, peer pressure would still be there, just different. I see it now even in my old country, it’s crazy! Our main draw were the schools, and we made the right decision there, so no regrets. We did not want to deal with lower income neighborhood if it meant higher crime, worse schools, boats and trucks on the street, barking dogs, noise at night, etc. Financially we could afford to live in this area, we have no debt besides mortgage, our other expenses are low, like MMM’s – cooking at home, shopping on sale, cheap hobbies and vacations, I can fix and maintain almost anything myself, so we don’t really have large recurring or one time expenses. Also, in the 2008-2012 housing debacle, our property values barely budged, despite the wave of foreclosures – exactly the kind of stability you expect when buying in an upper income area with top rated school district.
But you need to be aware there is a price to be paid for all that - the pressure to “belong” will be huge on your little girls, multiplied these days by social media and all that nonsense. I can shrug it off and not give it a second thought, and so can you. For the kids, especially girls, it’s much, much tougher, you will see. Talking to them, earning their trust, leading by example, just being there for them as they are growing up is very important, as is your unconditional support when they hit hard times. Boys get over stuff quickly, girls will hold it in for a long time. I wish you good luck, it’s a wonderful journey!