Why You Should Tell Your Children How Much You Make(nytimes.com)
nytimes.com
Why You Should Tell Your Children How Much You Make
http://www.nytimes.com/2015/02/01/your-money/why-you-should-tell-your-kids-how-much-you-make.html
162 comments
I had parents that shared quite a bit about money with me.
I remember, when I was a kid, any cash gifts that I got on my birthday, festivals, etc. would be divided in two equal piles. 1/2 would go to my savings account, and the other half would be given to me to do with as I pleased. This was my parents way to encourage savings.
A bit later, when I was in the 5th of 6th standard (we don't call them grades), and my parents spoke to me about their investments in the stock market, I began saving up my half of the gifts (from the last paragraph) and invested that in stocks. They really liked me doing this, and decided that they will match all my investments in stocks (really tiny sums of money then) provided I do not sell until I am eighteen. I realise now, they wanted me to get into the right kinds of stocks. Stable enterprises, with good leadership, etc. After seeing me doing this for about a year, they handed me my savings bank account, with all the 1/2's of all cash gifts I had been getting for all my life (about 14/15 years). This was there way of telling me that they had some confidence in my dealing with money. At around this same time, my dad was buying a new office. He spoke to me about the loans that he would be taking to buy this. There was some cash that I had (a gift from my grandfather, to be given to me when I turned 18) and I asked him to use that to offset the loan. I'd already realised, that I was not going to need this money until 18, and it made more sense to use this cash and offset the loan. Why pay more interest to banks that you need to?
On the whole, there have been a lot of incidents in my life, where my parents have been rather open about their income with me. Now, I'm 2 years out of college, I see the difference, in that, I am able to advise friends and colleagues, some older than me, on where to invest cash, how to save tax and a few stock tips a year. (I'm still a really long term investor :) )
I remember, when I was a kid, any cash gifts that I got on my birthday, festivals, etc. would be divided in two equal piles. 1/2 would go to my savings account, and the other half would be given to me to do with as I pleased. This was my parents way to encourage savings.
A bit later, when I was in the 5th of 6th standard (we don't call them grades), and my parents spoke to me about their investments in the stock market, I began saving up my half of the gifts (from the last paragraph) and invested that in stocks. They really liked me doing this, and decided that they will match all my investments in stocks (really tiny sums of money then) provided I do not sell until I am eighteen. I realise now, they wanted me to get into the right kinds of stocks. Stable enterprises, with good leadership, etc. After seeing me doing this for about a year, they handed me my savings bank account, with all the 1/2's of all cash gifts I had been getting for all my life (about 14/15 years). This was there way of telling me that they had some confidence in my dealing with money. At around this same time, my dad was buying a new office. He spoke to me about the loans that he would be taking to buy this. There was some cash that I had (a gift from my grandfather, to be given to me when I turned 18) and I asked him to use that to offset the loan. I'd already realised, that I was not going to need this money until 18, and it made more sense to use this cash and offset the loan. Why pay more interest to banks that you need to?
On the whole, there have been a lot of incidents in my life, where my parents have been rather open about their income with me. Now, I'm 2 years out of college, I see the difference, in that, I am able to advise friends and colleagues, some older than me, on where to invest cash, how to save tax and a few stock tips a year. (I'm still a really long term investor :) )
It's inescapable if they go to college. That's the only way I would have found out.
There's a line on the FAFSA form.
There's a line on the FAFSA form.
My parents simply told me they had too much in savings for me to get financial aid so filling out the FAFSA was a waste of time. But the entire time I was growing up they acted like we weren't in the best financial shape and couldn't afford name brand cereal and stuff so I learned to be thrifty through a false sense of being worse off than we actually were.
It is important to teach kids to live with in reasonable means and how to prioritize needs over desires to stay within budget when everything is accounted for. It is not important in my opinion for them to know an exact amount anyone makes, but the article does outline a way the former was achieved by doing the latter.
It is important to teach kids to live with in reasonable means and how to prioritize needs over desires to stay within budget when everything is accounted for. It is not important in my opinion for them to know an exact amount anyone makes, but the article does outline a way the former was achieved by doing the latter.
My parents did something similar.
FAFSA is supposed to provide some degree of assistance for nearly everyone in the middle class, and overwhelming amounts for working class families.
We left money on the table at a time when money was short because my parents didn't want to break out the tax forms, and assumed assistance was for Other People.
FAFSA is supposed to provide some degree of assistance for nearly everyone in the middle class, and overwhelming amounts for working class families.
We left money on the table at a time when money was short because my parents didn't want to break out the tax forms, and assumed assistance was for Other People.
FAFSA was required to get merit-based scholarships from my college, so I filled it out even though my parents made too much to get any need-based aid. I did get some money that way even.
Opposite of others' stories, my mother always put a very low number on the FAFSA form. It always annoyed me because I thought she was lying just so I can get more financial aid, and I'd argue about it because it felt like fraud.
Some years later, as I got good at personal finance and started helping family with budgeting, debt reductin, taxes, etc -- I saw all her financial info and realized she wasn't lying. She really did have very little. I was lucky to have been able to attend college.
(Everything's fine now, but I still carry some of that guilt for not believing her.)
Some years later, as I got good at personal finance and started helping family with budgeting, debt reductin, taxes, etc -- I saw all her financial info and realized she wasn't lying. She really did have very little. I was lucky to have been able to attend college.
(Everything's fine now, but I still carry some of that guilt for not believing her.)
>It's inescapable if they go to college.
I can confirm for you that it is not inescapable. And, yes that does make paying for college quite a bit more difficult for the student.
I can confirm for you that it is not inescapable. And, yes that does make paying for college quite a bit more difficult for the student.
Indeed, it's a particularly powerful tool if your parents don't want you to graduate from college. My sister was the only one to escape this trap due to attending a very inexpensive state school (they even rent the textbooks) just to get a generic business degree, being able to live with our grandmother, and having acquired skills that earned her above average wages.
Yes, and that is mentioned in the article:
> Keep in mind that if you are planning on applying for financial aid for college, you will have no choice but to disclose your financial information when your child is a senior in high school. That’s because anyone who wants financial aid must fill out a form called the Fafsa. It asks for information about income and assets. Parents sign it, and so must the students; everyone attests to the accuracy of the information.
> Keep in mind that if you are planning on applying for financial aid for college, you will have no choice but to disclose your financial information when your child is a senior in high school. That’s because anyone who wants financial aid must fill out a form called the Fafsa. It asks for information about income and assets. Parents sign it, and so must the students; everyone attests to the accuracy of the information.
"he decided to do something that many parents would consider radical: show them exactly what he earned."
Huh? Really? That's radical? I always knew how much my mom made. Do parents really keep this from their children, the same way they keep it from other coworkers?
Huh? Really? That's radical? I always knew how much my mom made. Do parents really keep this from their children, the same way they keep it from other coworkers?
I never knew how much my parents made when I was growing up. All I knew was that they worked hard, there was always food on the table, and we got to go on cool vacations once in awhile. I think that's really all you need to know at a young age. Doing chores, mowing lawns, etc, is a good way to learn the value of a dollar at a young age. At 14 I started working a real job and opened a checking account, seems like a perfect age to be learning about how to manage your own finances.
Usually when people say kids must "learn the value of a dollar", they imply kids underestimate how important that dollar is... but to me it feels like the reverse.
Kid-me would have been absolutely shocked at how many potential candy-bars/toys/etc. are being spent on adult things like rent or gas or insurance.
Kid-me would have been absolutely shocked at how many potential candy-bars/toys/etc. are being spent on adult things like rent or gas or insurance.
It goes both ways. At first money is meaningless, completely free. Then as you learn its value, it is incredibly valuable to you. Five whole dollars! Wow!
Why not younger, though? My parents included me in budgeting decisions much earlier, helping me create my own budget at around 6 or 7 (with my weekly $3 allowance), and showing me their thought process when they made decisions about how to spend money.
I think starting talk about budgeting and managing money needs to happen at the same time as kids learning about how money works. I never had a time that I knew about money but didn't know about budgeting; they went hand in hand. Because of this, I have never had any of the standard financial issues a lot of my peers had (never ran up credit card debt, always lived within my means, saved for retirement from my first job, etc).
I guess my question is more "Why NOT share this important life information with your kids early on? What is the point of keeping it from them?"
I think starting talk about budgeting and managing money needs to happen at the same time as kids learning about how money works. I never had a time that I knew about money but didn't know about budgeting; they went hand in hand. Because of this, I have never had any of the standard financial issues a lot of my peers had (never ran up credit card debt, always lived within my means, saved for retirement from my first job, etc).
I guess my question is more "Why NOT share this important life information with your kids early on? What is the point of keeping it from them?"
My dad never even told my mom how much he made, exactly - and she worked full-time too! His logic was that if we (kids, mom) knew how much was in the bank, we'd always be saying, "Why can't we have that? We have the money!"
All we knew was that we were living within our means, that mom and dad made enough - but that more was always better - and that the family budget was always made to fit inside my mom's (lower) salary, just in case.
Worked out well. We knew better than to bug him for stuff. He ended up socking a bunch away. And, we still managed to learn about the value of money when we got our own jobs - as kids.
All without knowing exactly how much my parents made.
All we knew was that we were living within our means, that mom and dad made enough - but that more was always better - and that the family budget was always made to fit inside my mom's (lower) salary, just in case.
Worked out well. We knew better than to bug him for stuff. He ended up socking a bunch away. And, we still managed to learn about the value of money when we got our own jobs - as kids.
All without knowing exactly how much my parents made.
I know quite a few Midwestern families that are like this. I think it's considered "adult topics" not suitable for children for various reasons.
A big one is that they don't want the neighbors to know.
Oh really? That may explain my family's situation. There were many "adult topics" which I was excluded from (to include death, sickness and funerals). My family originally was from the midwest and later relocated to the east coast.
It's radical among the kind of parents who make 10 grand a month (which happens to be the same set that these NYT culture articles are always about).
Do you have data for this? I don't, but anecdotally, I grew up with parents with around this income who openly discussed wages. While they might be outliers (both economists), many of my friends who grew up with similar family incomes have also mentioned their families discussing salary.
That's how my parents were. When I was 18 or so my father walked me through his income and all his retirement accounts, wills, life insurance policies, etc. He wanted me to understand at least the basics of his finances in case anything happened to himself and my mother.
I knew where all the paperwork was kept in the house and had access to the safety deposit box where he kept copies.
I knew where all the paperwork was kept in the house and had access to the safety deposit box where he kept copies.
I have my own anecdotes, but no, I don't have data.
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I grew up in the same situation. My mom always let me know and gave me a lot of details on the status of our family. In fact once I got older she started having me manage a lot of her online accounts and such because she had trouble with it. Now she's got my younger siblings doing it.
I also am surprised to find that this is considered radical. This has never been a sensitive topic in my family. I know my parents' salaries and I know what they've got saved for retirement. I even know what some of my other family members make (cousins, uncles, etc.) because they're open about it.
Another anecdotal data point: My parents have always been open about their finances with me and my siblings, but my father says that's largely because his father (my grandfather) would never discuss money with the family. Money can cause a lot of stress, so I can see how you would want to avoid discussing it with your kids.
Yes. I didn't find out my father's income until it was time for me to fill out my first FAFSA.
I think this is radical for bad parents. It's not normal to think this is radical.
Although I do understand if money is really tight, then you might not want to worry the kids.
As in real poor, not, I bought a 4 bedroom house with a huge tv and boat and now I'm worried about being laid off self induced poor, but struggling poor.
Although I do understand if money is really tight, then you might not want to worry the kids.
As in real poor, not, I bought a 4 bedroom house with a huge tv and boat and now I'm worried about being laid off self induced poor, but struggling poor.
The day when folks are in no way defined by their income can not come quickly enough. It saddens me to know that it will likely not be near my lifetime.
Money is essentially a measure of your influence/ability to make people do things, so it's not surprising it's tied up with status.
I suppose that is true. However, I see money as giving me the ability to not have to do what others want me to do (within legal bounds of course).
It's the same thing - your immunity to that power is your status.
No, it's not the same thing. Your influence on others is proportional to money and unbounded. Your immunity to others approaches 100% and stops. There's very little to brag or be guilty about, and we can share a goal of getting everyone close to that 100%.
I disagree. Using a probably hyperbolic metaphor: I don't want to be a slave but neither do I wish to be anybody else's master.
That is (or was) the definition of the middle or burgher class, though. The middle class is independent enough to be a check on the power of the upper class since they can't be bought, but not so wealthy or powerful that they control others. I think the analogy fits well.
It can often work the opposite of that. My brother is stuck in an industry he hates and unable to leave because his lifestyle is such that he couldn't take the income hit starting from near-scratch in another industry. He can't even really afford the income hit moving from a huge corporation to a fun little startup type gig.
And yeah, some of that is lifestyle, but lowering your standard of living is a lot harder when you've got a wife and 3 kids.
And yeah, some of that is lifestyle, but lowering your standard of living is a lot harder when you've got a wife and 3 kids.
But I mean, all that stuff is a measure of his influence (to have people give him big houses or whatever), which his employer was willing to give in exchange for your brother doing some work he wouldn't otherwise do, and so on.
Not surprising. Doesn't mean it is laudable, though. And what I am most uncomfortable with, is the influence it has on potential education.
I was surprised to read so much concern about children learning what their parents make or what their home is worth, as well as concern they might share that with outsiders. I have three kids, aged 1, 3, and 5, and I don't worry about that. Maybe it's because I'm a freelancer so I think about income more often than someone with a stable paycheck. Do other people fear those things?
If so, and sorry to veer off into a different thread, but maybe salary and home value are good answers to "I have nothing to hide." :-)
If so, and sorry to veer off into a different thread, but maybe salary and home value are good answers to "I have nothing to hide." :-)
There's slot of weird psychology at play here.
Many people harbor guilt or are otherwise insecure about money.
Many people harbor guilt or are otherwise insecure about money.
Hard not to notice that you didn't include your income in that post. Also it isn't so hard to understand income confidentiality. Some people have spendthrift relatives and acquaintances always on the lookout for loans. Some people will treat you different if they know how much you make. Envy is a thing, along with jealously.
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I agree that parents should tell their kids how much they make. Even better, bring them in on the budgeting process, explain how much of their paycheck goes to taxes, etc.
I was raised not knowing any of that -- my mother absolutely hated talking about her finances with me. So I never really had a clue what a reasonable wage or salary was, or how much I would actually lose to taxes, or what a reasonable budget was... and of course, none of that stuff was taught in high school, either.
Even with the FAFSA, etc., I remember being told to just sign it and my mother would insist on taking the form and going to fill in the blanks herself.
I think that parents talking to their children about this kind of thing provides them with a healthier financial barometer overall, which would be useful when they start getting pounded with credit card pre-approval letters out of the blue.
Edit: Even now, as a 29-year-old adult, I have no clue what my mother makes, what (if anything) she has for retirement, what she inherited from her father last year, the status of the house she lives in, etc. She just won't talk about that kind of thing because it "has nothing to do with me."
As a child, it can be a handicap, but as an adult, it can be massively stressful. I can understand the need to be independent (especially as a single mother), but money is just a sensitive topic when there isn't a lot.
I was raised not knowing any of that -- my mother absolutely hated talking about her finances with me. So I never really had a clue what a reasonable wage or salary was, or how much I would actually lose to taxes, or what a reasonable budget was... and of course, none of that stuff was taught in high school, either.
Even with the FAFSA, etc., I remember being told to just sign it and my mother would insist on taking the form and going to fill in the blanks herself.
I think that parents talking to their children about this kind of thing provides them with a healthier financial barometer overall, which would be useful when they start getting pounded with credit card pre-approval letters out of the blue.
Edit: Even now, as a 29-year-old adult, I have no clue what my mother makes, what (if anything) she has for retirement, what she inherited from her father last year, the status of the house she lives in, etc. She just won't talk about that kind of thing because it "has nothing to do with me."
As a child, it can be a handicap, but as an adult, it can be massively stressful. I can understand the need to be independent (especially as a single mother), but money is just a sensitive topic when there isn't a lot.
I'm in favor of this sort of disclosure in principle, but I have a (perhaps uncommon) problem with it.
I don't want to disclose my income because my kids are unlikely to ever earn what I do - and I don't want them ever to feel bad about it, and I don't think the budgeting aspect would be very useful/instructive given that it's "not normal".
We have lived far below our means, and I'm a known cheapskate. While my kids know we're "comfortable" the frugality seems to have rubbed off. They're savers (agonizing over substantial purchases, delaying gratification) and when they earn wages or get monetary gifts it goes in the bank rather than into clothes/gadgets/cars. I'm proud of that. They recoiled at my hints that they might consider a college major that would lead to a decent wage, claiming that they don't care about status buying and owning stuff. I hope it lasts beyond youthful idealism.
So here's the thing. If I show them my salary, it's likely 3X to 4X what they'll ever earn (based on median wages for college grads) so I can't show them "reasonable". I can show them some sort of freak-show budget with >60% going into savings, but it's still not likely to be very useful to them.
Part of me wants to share this info, and I'm happy to hear other opinions, but on balance it seems like it could do more harm them good. They're already financially wise for their ages. Maybe I should just show them our bills? Then they'd at least know what it takes to run an average home.
I don't want to disclose my income because my kids are unlikely to ever earn what I do - and I don't want them ever to feel bad about it, and I don't think the budgeting aspect would be very useful/instructive given that it's "not normal".
We have lived far below our means, and I'm a known cheapskate. While my kids know we're "comfortable" the frugality seems to have rubbed off. They're savers (agonizing over substantial purchases, delaying gratification) and when they earn wages or get monetary gifts it goes in the bank rather than into clothes/gadgets/cars. I'm proud of that. They recoiled at my hints that they might consider a college major that would lead to a decent wage, claiming that they don't care about status buying and owning stuff. I hope it lasts beyond youthful idealism.
So here's the thing. If I show them my salary, it's likely 3X to 4X what they'll ever earn (based on median wages for college grads) so I can't show them "reasonable". I can show them some sort of freak-show budget with >60% going into savings, but it's still not likely to be very useful to them.
Part of me wants to share this info, and I'm happy to hear other opinions, but on balance it seems like it could do more harm them good. They're already financially wise for their ages. Maybe I should just show them our bills? Then they'd at least know what it takes to run an average home.
My dad earns 2.5x my graduation salary (which in France is a huge difference - I'm 31 now). Don't worry about your kids knowing the figures, I've always rationalized about my father: He's from a business school (earns more than engineers), he explained me stuff about fluid mechanics theory (=He's smarter than me), he had 30 years of experience when I had 0.5, he manages 150 people when I would be incapable of that, and most of all, if your child isn't that rich, you may have 3 kids when he can adjust to having 2 or 1 if necessary.
If anything, knowing the figures will help kids plan their life accordingly and with more anticipation; the only drawback is I'm not good at holding secrets and a few friends have known about my father's salary.
The most important is probably something your kids already know: My father has a belly, and that's the result of long years of stress; In other terms he paid his wealth with his health.
If anything, knowing the figures will help kids plan their life accordingly and with more anticipation; the only drawback is I'm not good at holding secrets and a few friends have known about my father's salary.
The most important is probably something your kids already know: My father has a belly, and that's the result of long years of stress; In other terms he paid his wealth with his health.
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Why not be frank about it, if they're old enough? Tell them just what you wrote here and be honest about why you make so much and why they should not take that as a "normal" salary. Maybe talk in terms of percentages -- rent/housing this percent, expect taxes to be this percent, food this percent, etc.
As a child (rather than a parent), for me, this:
1. Reinforces that saving is something everyone should be doing no matter what their income.
2. Helps reassure me that parent is making and saving enough to retire.
3. Gives me passive reinforcement in knowing that other people are also budgeting [despite whatever they make].
As a child (rather than a parent), for me, this:
1. Reinforces that saving is something everyone should be doing no matter what their income.
2. Helps reassure me that parent is making and saving enough to retire.
3. Gives me passive reinforcement in knowing that other people are also budgeting [despite whatever they make].
I'll never match my grandfather's income. That's fine.
I didn't understand the need to be frugal, when I was young, because of this. But dealing with my own money and my own jobs, gave me hands on experience with the value of being frugal. This went well with their sharing of their own experiences - the value they got out of being frugal.
The lessons sunk in well. It's not just "savings are good" and a list of abstract rationalizations - savings feel good because I absolutely get it why they're good to me even this moment.
Understanding my grandfather's wealth taught me other important things beyond frugality, however:
I was able to learn from my grandfather's success about managing money - the value of compound interest, savings, calm and diverse long term investments. The dangers of panicked short term day trading.
I was able to learn from my extended family's failures with managing money - putting all their eggs in one basket, throwing good money after the bad, the disadvantages of lending to family - really underscoring what these mistakes can inflict on people, losing more money than I'll ever earn.
All the frugality in the world won't secure one's financial future if you can't resist shoving a retirement fund all in on the housing market. Or into a tech bubble. Or any number of baskets you couldn't see were going to come to an end eventually.
I didn't understand the need to be frugal, when I was young, because of this. But dealing with my own money and my own jobs, gave me hands on experience with the value of being frugal. This went well with their sharing of their own experiences - the value they got out of being frugal.
The lessons sunk in well. It's not just "savings are good" and a list of abstract rationalizations - savings feel good because I absolutely get it why they're good to me even this moment.
Understanding my grandfather's wealth taught me other important things beyond frugality, however:
I was able to learn from my grandfather's success about managing money - the value of compound interest, savings, calm and diverse long term investments. The dangers of panicked short term day trading.
I was able to learn from my extended family's failures with managing money - putting all their eggs in one basket, throwing good money after the bad, the disadvantages of lending to family - really underscoring what these mistakes can inflict on people, losing more money than I'll ever earn.
All the frugality in the world won't secure one's financial future if you can't resist shoving a retirement fund all in on the housing market. Or into a tech bubble. Or any number of baskets you couldn't see were going to come to an end eventually.
I am really struggling to follow your reasoning. Why can't you explain exactly what you just said here to your kids? Explain to them why you are so frugal (I imagine you either want to be prepared for any down swing in finances, or to retire early? Whatever your reasons are, tell them!)
I think the key is to always explain your thinking process to your kids. That is the important part, and that will translate no matter what their future earnings are.
I think the key is to always explain your thinking process to your kids. That is the important part, and that will translate no matter what their future earnings are.
My reasoning came from my concern that they'll somehow feel less satisfied with their economic status someday if they struggle to get ahead and fall short. I admit this may be entirely wrong; I may be "projecting" based on my own minor but lingering discomfort from being told (as an adult) what my Dad's peak earnings were (more than mine..).
I think you hit the nail on the head with the comment that it's explaining the thinking process that's most important. I've long had a goal of being able to retire early, and that has driven much of my frugality. For most people, the key long term financial security is living below your means, and that's really the message I'd want to communicate - not that you need to earn a ton. I can also explain that my savings are intended to last through 30+ years of retirement (one can only hope..) with some cushion against a market crash, etc. This seems like the right approach to sharing our finances - and how the relative balance of income, expenses, and savings all factor into my goal of early retirement.
I realize now too that part of my discomfort in sharing income information comes from the fear of either showing off, or seeming excessively materialistic - but with this approach of "goals driving behavior", it need not seem that way at all.
Thanks.
I think you hit the nail on the head with the comment that it's explaining the thinking process that's most important. I've long had a goal of being able to retire early, and that has driven much of my frugality. For most people, the key long term financial security is living below your means, and that's really the message I'd want to communicate - not that you need to earn a ton. I can also explain that my savings are intended to last through 30+ years of retirement (one can only hope..) with some cushion against a market crash, etc. This seems like the right approach to sharing our finances - and how the relative balance of income, expenses, and savings all factor into my goal of early retirement.
I realize now too that part of my discomfort in sharing income information comes from the fear of either showing off, or seeming excessively materialistic - but with this approach of "goals driving behavior", it need not seem that way at all.
Thanks.
It sounds like you've already done a great job instilling the virtues of budgeting and the value of money. I don't think you need to share your salary.
If you still had young kids, you could share instead your budgeted amount. Just don't even consider the savings income as being in the picture.
I think the strength of the lesson is to go from "wow, that's a lot of money on the table that I can touch," to "wow, almost all of it is gone due to overhead."
A secondary lesson is the concept of private information, formation of trust with sensitive sharing, and the harm in gossip.
If you still had young kids, you could share instead your budgeted amount. Just don't even consider the savings income as being in the picture.
I think the strength of the lesson is to go from "wow, that's a lot of money on the table that I can touch," to "wow, almost all of it is gone due to overhead."
A secondary lesson is the concept of private information, formation of trust with sensitive sharing, and the harm in gossip.
You sound like my parents. Though, they left the monthly budget lying around and I'd browse it on occasion. From that, I now know that I'll never earn near what they made. As well compensated as software development is, managing big projects for oil companies pays better. Especially when you get options and the economy is booming.
That's fine. I still earn enough to live very comfortably off half my income. I'm perfectly happy with that.
That's fine. I still earn enough to live very comfortably off half my income. I'm perfectly happy with that.
Your last point reminds me of a post from MMM that's slightly weak on the detailed math, but conceptually very sound: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...
If you have a high salary and live far below your means, then you have substantial savings. Do you disclose your overall assets / amount of savings to the kids? If you have savings and kids do you want to gift the maximum each year, and do you discuss estate planning and such?
I think annual income is just a single metric in a much larger equation which should be discussed by every family. E.g. the realities of what support you might need in the future, or what support you might be able to provide.
I think annual income is just a single metric in a much larger equation which should be discussed by every family. E.g. the realities of what support you might need in the future, or what support you might be able to provide.
My Dad (early 50's) has made more than I'm ever likely to (late 20's). He was always very circumspect about it, as it sounds like you are, but as I just became a father (and for some other reasons as well) he recently decided to share some hard numbers with me. I don't know how I feel about it, but I don't think I'd have been any worse off for not knowing.
tl;dr As someone in a similar position to your kids, I think your reasoning is sound.
tl;dr As someone in a similar position to your kids, I think your reasoning is sound.
It strikes me as odd that you would think that your kids are "unlikely to ever earn" as much as you have, or even less than a third as much. I'm curious about your basis for that assertion. Perhaps you're American, and it's grounded in the increasing concentration of wealth. Or perhaps it's just probabilistic. But in any case, isn't it better to share all of that with them?
maybe his children are disabled
My parents were incredibly insistent that my sister and I understand how they did their personal and business finances and it's among the best things they taught us (neck-and-neck with how to cook).
They ran their own business until I was in my mid-20s, so during school holidays we would often go with them to work. In addition to us helping out in their warehouse, they also used to get us to do things like writing up the deposit slips for incoming cheques to take to the bank.
They seemed like menial chores at the time to keep us busy, but it really did help us understand how the whole thing worked. They essentially showed us "this is how we do it and why" rather than saying "this is how you must do it" and considering nothing like that was taught to us at school, in hindsight I am very grateful for it.
So yes, definitely bring your kids in as much as possible on finances - even the most basic things like budgeting to live within your means is essential.
They ran their own business until I was in my mid-20s, so during school holidays we would often go with them to work. In addition to us helping out in their warehouse, they also used to get us to do things like writing up the deposit slips for incoming cheques to take to the bank.
They seemed like menial chores at the time to keep us busy, but it really did help us understand how the whole thing worked. They essentially showed us "this is how we do it and why" rather than saying "this is how you must do it" and considering nothing like that was taught to us at school, in hindsight I am very grateful for it.
So yes, definitely bring your kids in as much as possible on finances - even the most basic things like budgeting to live within your means is essential.
> So I never really had a clue what a reasonable wage or salary was, or how much I would actually lose to taxes, or what a reasonable budget was... and of course, none of that stuff was taught in high school, either.
A few years ago in Guatemala I bumped into a bunch of American final-year dentistry students who were volunteering down there. They were all around 22-24 and extremely friendly, so we got to talking.
It eventually came out that they all knew they were going to make ~$120k a year when they started work, but they had no idea what that meant. One guy admitted he had no idea if he'd be driving a Porsche or a civic on that salary, and another wondered if he could buy a house outright, would have to get a mortgage, or wouldn't be able to afford a house at all and would rent in a share house his whole life.
I honestly believe their parents had done them a massive disservice.
A few years ago in Guatemala I bumped into a bunch of American final-year dentistry students who were volunteering down there. They were all around 22-24 and extremely friendly, so we got to talking.
It eventually came out that they all knew they were going to make ~$120k a year when they started work, but they had no idea what that meant. One guy admitted he had no idea if he'd be driving a Porsche or a civic on that salary, and another wondered if he could buy a house outright, would have to get a mortgage, or wouldn't be able to afford a house at all and would rent in a share house his whole life.
I honestly believe their parents had done them a massive disservice.
Reaky you goto University and have no idea what a $120k sallary means - unless your a trust fund kid i can't realy belive that espesialy for medical degree.
And Clasic 911's are quite afordable and you dont get the massive loss you do on buying a new one.
And Clasic 911's are quite afordable and you dont get the massive loss you do on buying a new one.
U drunk?
No I am a dyslexic - no ofence are you stupid :-)
Ah very sorry! I thought you may have been typing on mobile or something. You are totally cool by me and I'm sorry if I offended you.
I'm actually wondering about the "Porsche or a civic" question now. Can you afford a Porsche on ~$120k a year in the US? (I'm not a car guy)
You piqued my curiosity - a quick search turned up an article[1] that has some info:
"Take the Porsche 911. Its buyers are 86.8% male with the average age of 51 and median income of $390,000."
[1] http://www.forbes.com/2008/02/05/cars-sex-signals-forbeslife...
"Take the Porsche 911. Its buyers are 86.8% male with the average age of 51 and median income of $390,000."
[1] http://www.forbes.com/2008/02/05/cars-sex-signals-forbeslife...
With leasing,you can afford pretty much any car you like(unless you start talking about ferraris of Bentleys) if you make an ok salary[1]. My only experience is in the UK,but I am certain that if you made $40-50k a year you could easily find a leasing plan that would let you afford the monthly payment on a Porsche - even better if you pick one that's a few years old, then it's really easy. You couldn't buy it outright, you probably wouldn't want to pay off the rest of the car at the end of the lease,but yeah, you could absolutely do it.
[1]and don't have kids/mortgage to pay off.
[1]and don't have kids/mortgage to pay off.
define "afford". lots of people see that they have around $300 left over every month after paying rent, food, verizon and cable tv, and drop that directly on a $300/month BMW lease. can they afford that?
Bit dated, but interesting:
http://www.csparks.com/bmw/CarPriceVsIncome.xhtml
Thank you for that, certainly the most interesting is to see the most/least frugal car owners at the bottom of the page.
Seeing Lexus and Audi owners in the frugal list is kind of funny.
Seeing Lexus and Audi owners in the frugal list is kind of funny.
All the Lexus owners I know have emphasized the TCO rather than the luxury aspects to me. It's a nice car, but it's also a pretty reliable value.
Similarly, I've known some people who wished they had a Lexus, who I wouldn't call frugal.
I was hoping there would be an obvious answer. I guess I could rephrase the question this way: "is it common for people who make ~120k/year to drive a Porsche?" or "if you'd have a median income of all Porsche owners, what would it be?". I just want to get a general idea.
If you bought the Civic instead, and invested the difference, you'd be able to buy a lot more than a Porsche.
It's definitely not common. Partly because $120k doesn't go as far as you'd think if you live in a nice city, and partly because not everyone wants a Porsche. If you're into cars, and really wanted one, you could be driving a used 911 on that salary (if your other bills/expenses are reasonable, and you go with a tame model.) The thing to remember about expensive cars though, is the high cost of ownership. Insurance will cost more; Parts will cost more; Repairs will cost more; Tires and gas will cost more...
Is it common? No. Is it possible? Yes.
Engineering is the process of making trade offs to accomplish specific goals. Budgeting is the same thing. At 120k you definately have enough money for a porche. However whether you can "afford" it depends on what trade offs you make.
You could easily afford at least a boxter at that price and I don't think a 911 would be too much of a stretch[1]. It really depends on your priorities, though (i.e. do you also want a really nice house/condo, boat, cabin on a lake, etc.) But I would say anyone making $120k/year who wants a Porsche definitely has one. (We are only talking about financial restrictions/opportunities, of course.)
[1]MSRP:
911: $85k
Boxter: $52k
[1]MSRP:
911: $85k
Boxter: $52k
See @simantel stat above. Almost no one earning just $120k / year is driving a Porsche. There's not as much disposable income in a $120k/yr wage as you might think.
Just because not many people making $120k/year aren't driving a Porsche doesn't mean that they can't afford one. In his first question sysk asks if people making that much can afford one. Later, he rephrases the question as, do people making that much drive them. The answer to the second question is no. But I still believe the answer to the first question is yes.
How is it possible for someone to survive okay on $40k/year, but if they earn an additional $80k/year (maybe an extra 40k/year after taxes?) they can't afford a $50k car? As I said, it comes down to priorities. (We're assuming that they don't live in NYC. I don't think it's fair to use that as an example for car affordability.) Even if we assume 80k/year as the baseline, that's about $20k/year extra after taxes. Can you buy a Porsche with cash without saving any money up? No. But if you save for a little bit or get a 3-5 year car loan it's easily affordable. So as I said, I believe that anyone who makes that much and wants a Porsche can easily make it happen.
How is it possible for someone to survive okay on $40k/year, but if they earn an additional $80k/year (maybe an extra 40k/year after taxes?) they can't afford a $50k car? As I said, it comes down to priorities. (We're assuming that they don't live in NYC. I don't think it's fair to use that as an example for car affordability.) Even if we assume 80k/year as the baseline, that's about $20k/year extra after taxes. Can you buy a Porsche with cash without saving any money up? No. But if you save for a little bit or get a 3-5 year car loan it's easily affordable. So as I said, I believe that anyone who makes that much and wants a Porsche can easily make it happen.
There's as much disposable income as you're willing to dispose of. I live comfortably on less than 20k a year. If I had a 120k/yr job but otherwise maintained the same lifestyle I could totally drive a Porsche, but my inclination would be to give it away or save it instead.
Few would consider money "disposable" if you had to make sacrifices for it.
@zaroth probably has NYC/SF in mind, where most $120k+ salaries probably are. Pay $40k tax (fed+state+local), at least $30k for rent+utilities, and you're left with $50k for food, clothing, gym, social expenses, travel, and everything else. Out of that, you'll be paying for gas, tolls, insurance, maintenance, and parking. Parking alone will run you $5-10k (unless you're okay with street parking and having that sweet ride scraped up end to end by a truck next week). You could do it, but not because $120k is Porsche-driving income.
@zaroth probably has NYC/SF in mind, where most $120k+ salaries probably are. Pay $40k tax (fed+state+local), at least $30k for rent+utilities, and you're left with $50k for food, clothing, gym, social expenses, travel, and everything else. Out of that, you'll be paying for gas, tolls, insurance, maintenance, and parking. Parking alone will run you $5-10k (unless you're okay with street parking and having that sweet ride scraped up end to end by a truck next week). You could do it, but not because $120k is Porsche-driving income.
I really can't understand the mentality of hiding financial information from your kids. I learned about budgeting and how to allocate your money at the same time I learned about what money was; the two concepts were inseparable for me. My parents always shared their thought processes when they would decide to spend money on things. They showed me how they were saving for retirement, and what things they were considering when deciding how much to save.
We would often have family budget meetings, where we could all make our cases as to why we should spend more on one thing than another. Of course, my parents always had the final say, but they would listen to me and explain why they made the decisions they did (sorry, your sister's braces are a higher priority than your PowerWheel car).
Because of this early exposure, I never had the same financial problems my friends did, even when I was a very poor student and recent grad. I never accumulated credit card debt, nor did I buy a car that was too expensive for my budget. I always saved for retirement, starting with my first job. Budgeting and money management is just second nature to me.
I can't think of a single argument as to why you would want to hide this valuable learning experience from your kids.
We would often have family budget meetings, where we could all make our cases as to why we should spend more on one thing than another. Of course, my parents always had the final say, but they would listen to me and explain why they made the decisions they did (sorry, your sister's braces are a higher priority than your PowerWheel car).
Because of this early exposure, I never had the same financial problems my friends did, even when I was a very poor student and recent grad. I never accumulated credit card debt, nor did I buy a car that was too expensive for my budget. I always saved for retirement, starting with my first job. Budgeting and money management is just second nature to me.
I can't think of a single argument as to why you would want to hide this valuable learning experience from your kids.
> I can't think of a single argument as to why you would want to hide this valuable learning experience from your kids.
For me, the top ones to bubble up are
1. Shame
2. Embarrassment
3. Trying to shield children from difficulties
For me, the top ones to bubble up are
1. Shame
2. Embarrassment
3. Trying to shield children from difficulties
Fair enough, I guess I could have imagined arguments... I just don't feel they are very good ones. Your kids are your family, they are going to pick up on any shame and embarrassment you feel, and hiding the details isn't going to make them not see that in you. Explaining the actual situation might actually make them feel better, rather than their own guesses as to why their parents are ashamed and embarrassed.
Same with shielding your children from difficulties; they are going to sense things, and their imagination will be worse than the reality. Tell them your problems, but do so in a way that conveys your confidence that you can overcome them. You are teaching them about life, which is really just a series of difficulties that you overcome.
Same with shielding your children from difficulties; they are going to sense things, and their imagination will be worse than the reality. Tell them your problems, but do so in a way that conveys your confidence that you can overcome them. You are teaching them about life, which is really just a series of difficulties that you overcome.
Not sure I agree. When I was a child I knew my family was struggling, but had I actually been burdened with knowing how far behind we were on paying for housing etc I might have had a nervous break down. There is some information that may be to heavy for a kid
I thank my parents for shielding me from the dollars we didnt have. Only know looking back do I realize how tight times must have been. Sharing that yoke with the children would have hurt all of us a little.
Yeah, I guess I wasn't thinking about people who are really struggling. There might be a point where it is bad enough that it would be too heavy for a kid.
> I can't think of a single argument as to why you would want to hide this valuable learning experience from your kids.
To avoid financial information being compared between families. This already happens via secondary signals, like clothes and possessions, adding direct financial comparison makes the poison stronger.
A better way is to make a toy budget based on allowances.
To avoid financial information being compared between families. This already happens via secondary signals, like clothes and possessions, adding direct financial comparison makes the poison stronger.
A better way is to make a toy budget based on allowances.
You're so right. I don't want to raise them to live in a fantasy bubble (when I have kids, that is). The world is a big bad place; I'd rather prepare them, than shield them.
Not to sound disrespectful to differing opinions, but I can't see a single good reason of not exposing your kids to the realities of life (money or otherwise) when they're old enough (starting from 8-9 maybe).
_The world is a big bad place_
Are you really going to teach tham that it's bad?
Are you really going to teach tham that it's bad?
At the right age absolutely. When I say big bad place I mean make them street smart.
If they still believe in fairy tales, santa, etc. and believe that life ahead is a bed of roses, it's so easy to fall off the wagon.
If they still believe in fairy tales, santa, etc. and believe that life ahead is a bed of roses, it's so easy to fall off the wagon.
> I can't think of a single argument as to why you would want to hide this valuable learning experience from your kids.
I doubt people make a rational decision not to do it; they just avoid it because it makes them feel bad.
I doubt people make a rational decision not to do it; they just avoid it because it makes them feel bad.
>Even now, as a 29-year-old adult, I have no clue what my mother makes...
Just curious, what would you do with that information if you had it?
Just curious, what would you do with that information if you had it?
I am not who you asked, but I don't know much about my parents' finances, either.
If I had access to that information I could make educated guesses about how to care for them as they age. Are they able to retire? How long can they live before they are out of money? How much do I need to have saved by the time they are X years old to ensure they are cared for?
Unless I was going to let them live on the street, it's something I must consider.
If I had access to that information I could make educated guesses about how to care for them as they age. Are they able to retire? How long can they live before they are out of money? How much do I need to have saved by the time they are X years old to ensure they are cared for?
Unless I was going to let them live on the street, it's something I must consider.
Well, more than the salary (which I do suspect is low), I would like to know her retirement/medical budget since she's heading for retirement and her family has a history of very heavy medical issues (Parkinson's and Alzheimer's).
This is why I'm especially skeptical of her assertion that is "has nothing to do with you." It _does_, because if/when she needs help, of course you're going to want to be there. Still I can't think of a way to say "It is my business because it's possible that one day you will have dementia and I'll have to pay for someone to care for you all day."
Sure, the assertion is fallacious. Pointing that out doesn't actually change anything, though. You can't force intimacy (and sharing otherwise private/sensitive information can definitely qualify if you feel that way) where it's not welcome. The 'problem' (if you see it as one) is that sdrothrock's mother doesn't see them as an ally on this front. That's what'd need to change.
That sounds like exactly the way to say it. Well, maybe add in "because I love you" as well. ;)
When you hit a certain age, it does have something to do with you. At some point you may need to take financial or physical care of your Mom. That said, it's not an easy topic to broach. But better to do it while she still has her wits. (I've taken care of one parent, and perhaps have another on the way. Much easier to sort through stuff while they still can explain it.)
This is all very well when finances are good. But a friend of mine grew up poor, and their mother held back nothing in telling them exactly how broke the family was. To this day they are extremely jittery about all things financial - I think there is such a thing as too young to be worrying about money. But when you're a young adult, absolutely.
Even now, as a 29-year-old adult, I have no clue what my mother makes
Hey, my wife doesn't know how much I make. But nor does she care. If she asked, I wouldn't hide it :) It is unusual to know other people's income in the culture I grew up in and live in here in the UK though, so it's not too bizarre.
Hey, my wife doesn't know how much I make. But nor does she care. If she asked, I wouldn't hide it :) It is unusual to know other people's income in the culture I grew up in and live in here in the UK though, so it's not too bizarre.
Now that sounds really weird to me, and here in Germany people aren't publishing their salaries either.
But I can't imagine not even stumbling over it by chance after at least a few years.
Apparently you're a lot less likely than I am to let your bank statements on your desk or the kitchen table.
But I can't imagine not even stumbling over it by chance after at least a few years.
Apparently you're a lot less likely than I am to let your bank statements on your desk or the kitchen table.
When I was 16 my dad made me balance the check book and pay all the bills for a year. It is why I feel I am successful now. He also taught me to ask how can I expand my means to afford something vs cutting. A great idea for sure!
You forgot that HN readers are cool bros who travel the world and code from cafes in Thailand while writing books about now to be cool. They don't have kids.
I'm probably risking my karma to respond in agreement with an already downvoted post but whatevs. You're mostly spot-on about the demographic even if also something of a prick about it. ;)
You can generally sort out the parental from the non-parental voices by content, too. Amateur data science!
> Some parents start with even larger line items. Trisha Jones, a stay-at-home mother in Norfolk, Va., sends her children, who are 6 and 8, to private school. Each month, she has them sit with her while she pays the tuition online, asking them to click the button. “We jokingly say that it costs $92.50 to send them each to school every day,” she said, adding that they know that the daily number is akin to a nice Lego set. “But it’s a privilege to go to the school that they do, and we want them to know that we are making sacrifices to send them there.”
This really made me cringe. Specifically why should you admit to your kids that what they have is a privilege. Isn't it the same as saying we're rigging the contest? We're making the world more unjust?
Your kids should know that is not really that good for them to be away from the poor/slow/racially inferior/wrong religion kids (or whatever your reason is), but it's actually really harmful for the public school kids not to have the kids who can afford private school in the same class.
This really made me cringe. Specifically why should you admit to your kids that what they have is a privilege. Isn't it the same as saying we're rigging the contest? We're making the world more unjust?
Your kids should know that is not really that good for them to be away from the poor/slow/racially inferior/wrong religion kids (or whatever your reason is), but it's actually really harmful for the public school kids not to have the kids who can afford private school in the same class.
This really made me cringe. Specifically why should you admit to your kids that what they have is a privilege.
I think it's important for people to be aware of the privileges they can and do take advantage of. Even (especially?) kids can benefit from learning this early on.
Your kids should know that is not really that good for them to be away from the poor/slow/racially inferior/wrong religion kids (or whatever your reason is), but it's actually really harmful for the public school kids not to have the kids who can afford private school in the same class.
So you're saying that parents should intentionally give their kids a (presumably) inferior education, just because others aren't quite so privileged?
My opinion is that recognizing and doing something about your own privilege shouldn't be about handicapping yourself, but should be about helping to elevate those without the same privilege.
Now, you can argue that putting the more-well-off kids in a regular public school would do that, but the problem is it's another one of those solutions that only works if everyone does it simultaneously. And that's just not something someone is going to be able to make happen. So, instead, you have to compromise: you give your own kids an advantage that some people may not have access to. If you have the ability, you might also try to help out the less-advantaged kids by donating time or money (or something) to improving their education in other ways. Certainly not a perfect situation, but many families don't have that much wiggle room in what their finances will allow.
Of course, this is all assuming as fact your assertion that private school = rich, smart kids and public school = poor, dumb, disadvantaged kids, which... I don't really buy as a blanket statement.
I think it's important for people to be aware of the privileges they can and do take advantage of. Even (especially?) kids can benefit from learning this early on.
Your kids should know that is not really that good for them to be away from the poor/slow/racially inferior/wrong religion kids (or whatever your reason is), but it's actually really harmful for the public school kids not to have the kids who can afford private school in the same class.
So you're saying that parents should intentionally give their kids a (presumably) inferior education, just because others aren't quite so privileged?
My opinion is that recognizing and doing something about your own privilege shouldn't be about handicapping yourself, but should be about helping to elevate those without the same privilege.
Now, you can argue that putting the more-well-off kids in a regular public school would do that, but the problem is it's another one of those solutions that only works if everyone does it simultaneously. And that's just not something someone is going to be able to make happen. So, instead, you have to compromise: you give your own kids an advantage that some people may not have access to. If you have the ability, you might also try to help out the less-advantaged kids by donating time or money (or something) to improving their education in other ways. Certainly not a perfect situation, but many families don't have that much wiggle room in what their finances will allow.
Of course, this is all assuming as fact your assertion that private school = rich, smart kids and public school = poor, dumb, disadvantaged kids, which... I don't really buy as a blanket statement.
You have some good points and I admit that what I wrote came mostly from a gut reaction. However there are a lot of studies showing that there are few benefits for more well-off kids to avoid social mixing, while the damage inflicted to those who can't afford private schools and are deprived of interaction with other social classes is great.
I personally don't believe in solutions like charity and volunteering to make a society more egalitarian and fair. I'm thinking specifically at the impact of this type of philosophy on American society vs advanced socialdemocracies like Scandinavian countries.
If you realize you have a cultural or economic advantage I think you should really put it to use by sending your kid to the same school as everybody else and improving it passively by their sole presence, and actively by making your local public school as good as possible for everyone else.
I personally don't believe in solutions like charity and volunteering to make a society more egalitarian and fair. I'm thinking specifically at the impact of this type of philosophy on American society vs advanced socialdemocracies like Scandinavian countries.
If you realize you have a cultural or economic advantage I think you should really put it to use by sending your kid to the same school as everybody else and improving it passively by their sole presence, and actively by making your local public school as good as possible for everyone else.
Not knowing that what you have is a privilege is the definition of spoiled. If they know it's a privilege, they can be thankful for it and (perhaps) perform better in school. What you said is beneficial for children to learn, too, but it's irrelevant here.
"Listen kiddo, since your dad got a high score in SAT you get to a 500 points headstart on other kids in your class. So make the most of it."
I think we'd all agree this would be a perverse incentive. My point is that there are already a bunch of advantages privileged kids get: more money, more access to culture, better social connections do we really need to actively try to rig the game any more in their favor?
I think we'd all agree this would be a perverse incentive. My point is that there are already a bunch of advantages privileged kids get: more money, more access to culture, better social connections do we really need to actively try to rig the game any more in their favor?
I don't understand how admitting the game is rigged actively makes it more rigged?
No, sending your kids to private school is actively making it more rigged. If you tell them, it means you know.
Let me rephrase my previous post:
"Listen kiddo, since your dad got a high score in SAT he can apply to get you a 500 points headstart. Other kids can't get it so make the most of it."
You can still choose not to send your kids to private school if you feel it's an unjust advantage.
Let me rephrase my previous post:
"Listen kiddo, since your dad got a high score in SAT he can apply to get you a 500 points headstart. Other kids can't get it so make the most of it."
You can still choose not to send your kids to private school if you feel it's an unjust advantage.
I'm still unsure why knowing really matters.
Anyway, I think the impact on the other kids is much more important than whether it's an advantage or not.
If giving the advantage to one kid removes an equal amount from the other kids, that's bad.
If it removes even more from the other kids, that's terrible.
If it doesn't affect the absolute education level of other kids, then probably go for it, even if it's unfair.
Raise the average quality of education, even if it's selfish.
Anyway, I think the impact on the other kids is much more important than whether it's an advantage or not.
If giving the advantage to one kid removes an equal amount from the other kids, that's bad.
If it removes even more from the other kids, that's terrible.
If it doesn't affect the absolute education level of other kids, then probably go for it, even if it's unfair.
Raise the average quality of education, even if it's selfish.
Private schools are usually better schools; if you have the means to provide your children a better education than the state can, why wouldn't you? I never understood this Harrison Bergeron mentality of holding people down in the name of equality.
Why is it that you immediately associate avoiding public school with identity politics?
I think you'd be well served reading the works of Ivan Illich (in particular Deschooling Society), John Taylor Gatto and John Holt that all just about debunk the fundamental idea of schooling as inherently inefficient and originating in a rather peculiar turn of events during the 19th century which had little to do with actually educating the masses.
That said, I don't think most private schooling is a proper solution either, but rather free/democratic/Sudbury schools, unschooling, apprenticeships and a general rise in people associating education with autodidacticism rather than formal institutions.
I think you'd be well served reading the works of Ivan Illich (in particular Deschooling Society), John Taylor Gatto and John Holt that all just about debunk the fundamental idea of schooling as inherently inefficient and originating in a rather peculiar turn of events during the 19th century which had little to do with actually educating the masses.
That said, I don't think most private schooling is a proper solution either, but rather free/democratic/Sudbury schools, unschooling, apprenticeships and a general rise in people associating education with autodidacticism rather than formal institutions.
Look at the UK where 90% of the establishment went to public school - liek wise for Harvard in the USA
Public school in the UK is private school in the US.
Er no, public school _and_ private school in the UK are the equivalent of private school in the US. State school in the UK is the equivalent of public school in the US.
I sort of feel like is a middle class/upper class problem or lesson to be learned. When you grow up poor none of this is really a mystery. You understand very early on the value of a penny, where it goes, and why it's spent. Still a valuable lesson.
But do "you" really understand?
My parents have always been on a tight budget -- they got most of their cutlery, plates etc with loyalty schemes for the biscuits I'd eat every morning. They bought a second-hand campervan so that they could go on holiday without paying for hotels, and could afford a house only thanks to old-school "socialist" policies here in Europe. They always fixed what they broke and always talked about the importance of using money wisely, for real things etc etc. They were also politically active, so I know how the sausage gets made, so to speak.
The result? I've always been rubbish at managing big sums of money. When my salary went over a certain threshold, I just stopped caring. I get anxious at the first sight of debt, yeah; but in many ways, that's also a handicap because it stops me from effectively leveraging debt as an instrument of growth. I can't get myself to talk about money with clients, and I'm thankful someone else does it for me. I used to spend days looking to save a few quid on this or that £20 gadget, and now I buy my cars from an expensive official dealer that is clearly overcharging me. When numbers go over a certain threshold, it just becomes "funny money" and my brain switches off. Right now I'm probably living beyond my means and balancing my budget by pure luck, I just have no idea.
Growing up poor can give you a certain inner fire and a sense of the importance of money in society; but it doesn't necessarily give you a full picture, in the same way knowing how to develop a simple webapp with Django or Ruby doesn't mean you know how to implement a scalable and highly-available system with queues, nosql, AWS orchestration and so on. You know the value of a penny, but not necessarily the value of a grand.
My parents have always been on a tight budget -- they got most of their cutlery, plates etc with loyalty schemes for the biscuits I'd eat every morning. They bought a second-hand campervan so that they could go on holiday without paying for hotels, and could afford a house only thanks to old-school "socialist" policies here in Europe. They always fixed what they broke and always talked about the importance of using money wisely, for real things etc etc. They were also politically active, so I know how the sausage gets made, so to speak.
The result? I've always been rubbish at managing big sums of money. When my salary went over a certain threshold, I just stopped caring. I get anxious at the first sight of debt, yeah; but in many ways, that's also a handicap because it stops me from effectively leveraging debt as an instrument of growth. I can't get myself to talk about money with clients, and I'm thankful someone else does it for me. I used to spend days looking to save a few quid on this or that £20 gadget, and now I buy my cars from an expensive official dealer that is clearly overcharging me. When numbers go over a certain threshold, it just becomes "funny money" and my brain switches off. Right now I'm probably living beyond my means and balancing my budget by pure luck, I just have no idea.
Growing up poor can give you a certain inner fire and a sense of the importance of money in society; but it doesn't necessarily give you a full picture, in the same way knowing how to develop a simple webapp with Django or Ruby doesn't mean you know how to implement a scalable and highly-available system with queues, nosql, AWS orchestration and so on. You know the value of a penny, but not necessarily the value of a grand.
Perhaps thinking of your spending as a percentage of your net income, rather than an absolute amount, would help? Have a read over:
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...
I found it provided a very useful perspective.
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...
I found it provided a very useful perspective.
Very useful, thanks. Basically: "your age to retirement depends entirely on your savings rate, as a percentage of your take-home pay".
So, in short, try to live on less, put the rest in the bank and don't spend it. Live on what you need, avoid needless luxuries. And avoid credit card debt like the plague, right?
So, in short, try to live on less, put the rest in the bank and don't spend it. Live on what you need, avoid needless luxuries. And avoid credit card debt like the plague, right?
This is just an idea, but it sounds like you have a hindering emotional reaction to large sums of money. I wonder if you could "disable" that reaction by using a new representation that your unconscious mind wont recognize. Like if you think about money with scientific notation for instance.
>I earn 1.5E5 units per year. After 20% taxes that's 1.2E5 units.
>My mortgage is at 4E4 units.
etc
>I earn 1.5E5 units per year. After 20% taxes that's 1.2E5 units.
>My mortgage is at 4E4 units.
etc
I remember learning that you can't rely on listed price for grocery items, but must check the per kilogram or per liter price. Because bigger containers are usually cheaper. But not always.
I still buy tuna that's 0.1 euro per kilogram cheaper ... I really don't know whether the savings are ever going to add up to anything and I'm almost certain it's not worth the 30 seconds it takes to check. But I can't not do it.
I still buy tuna that's 0.1 euro per kilogram cheaper ... I really don't know whether the savings are ever going to add up to anything and I'm almost certain it's not worth the 30 seconds it takes to check. But I can't not do it.
You also have to factor risk of spoilage. 2 units of milk is cheaper than 1 unit. But what is the risk of .5 units being thrown out since you normally don't use 2 units within the time it takes to spoil. You could increase consumption to not throw it out, but then you need to balance that out or all you did is increase the amount you spend on groceries and the calories you consume while attempting to actually reduce the money spent on groceries.
Stores are good at using sales to trick us into comparing prices as if we were going to buy on sale items anyways (in which case money is definitely being saved) instead of comparing it to what our actual behavior would have been had the items not been on sale.
Stores are good at using sales to trick us into comparing prices as if we were going to buy on sale items anyways (in which case money is definitely being saved) instead of comparing it to what our actual behavior would have been had the items not been on sale.
Sort of. I grew up in a working poor household and while I learned the value of money, simple things like budgeting and how much debt is too much debt I had to teach myself.
[deleted]
> [E]ven the youngest generally understand when budgets have become tighter and want to know why.
I don't think this is true for everyone. Children could write off a lack of stuff to any reason other than "budgets have become tighter", or give it no thought at all, or be proud that they are not spoiled. Also, "I never thought we were poor" stories are not uncommon. I don't know if that's a better way to go, but at least it's sometimes possible.
I don't think this is true for everyone. Children could write off a lack of stuff to any reason other than "budgets have become tighter", or give it no thought at all, or be proud that they are not spoiled. Also, "I never thought we were poor" stories are not uncommon. I don't know if that's a better way to go, but at least it's sometimes possible.
Budgeting with older kids, as part of teaching about general responsibility, is probably a great idea. I'm also bewildered why anyone would hide their finances from their kids. Neat idea to dump it out in cash and divide it out, as an easier way to visualize.
But, some kids worry. Having to tell them we have to be careful with money, that we can't do something because of money... eh, that introduces an unnecessary thing for them to be concerned about when they're only 6, or 8 or so. They're already terrified about death, plus all the other "stresses" of whatever kids deal with (getting to the bathroom on time, not being made fun of, studying, etc.).
So my line to my kids is: I earn enough, and I always will find a way. You should never worry about this. Don't let money be the deciding factor in decisions. Even at one point when I was a kid and we were on food stamps, my father always tried to make it clear that money would not be a concern. Dealing with teen stuff, no matter how insignificant it now appears, plus worrying about my parents budgeting? What's for?
As far as "Why can't I get <newitem>?" -- I don't buy them every toy they want, but that's due to clutter and accumulating shit. I let them get any new toy they want, if they trade in several old toys (so that they'd approach only having a few, plus presents that don't require trade in). That's a separate discussion though.
But, some kids worry. Having to tell them we have to be careful with money, that we can't do something because of money... eh, that introduces an unnecessary thing for them to be concerned about when they're only 6, or 8 or so. They're already terrified about death, plus all the other "stresses" of whatever kids deal with (getting to the bathroom on time, not being made fun of, studying, etc.).
So my line to my kids is: I earn enough, and I always will find a way. You should never worry about this. Don't let money be the deciding factor in decisions. Even at one point when I was a kid and we were on food stamps, my father always tried to make it clear that money would not be a concern. Dealing with teen stuff, no matter how insignificant it now appears, plus worrying about my parents budgeting? What's for?
As far as "Why can't I get <newitem>?" -- I don't buy them every toy they want, but that's due to clutter and accumulating shit. I let them get any new toy they want, if they trade in several old toys (so that they'd approach only having a few, plus presents that don't require trade in). That's a separate discussion though.
My parents completely hid all finances from me and my sister growing up. My mother in particular would be horrified to think that their kids were stressing out over mortgage and utility bills. They didn't have to sit down and show us their pay-stubs for us to know roughly what types of things we could afford though. Perhaps if my parents had been really wealthy and could afford anything, then I would have grown up with no concept of money. But, as it were, I had a small allowance that I could spend as I pleased and I knew pretty well what price range we could afford for birthdays and such.
I would like to think I'm a moderately successful entrepreneur with a decent ability to manage personal and corporate finances. I'm thankful I didn't have that "adult" stress on my shoulders and was allowed to just be a kid.
I would like to think I'm a moderately successful entrepreneur with a decent ability to manage personal and corporate finances. I'm thankful I didn't have that "adult" stress on my shoulders and was allowed to just be a kid.
I wholeheartedly agree. Our consumer-led marketing manipulated society casts a massive shadow over the reality of just how much things cost and no sum of money is too big. When you're a child or teenager, you don't have the pressures of life on your shoulders, you don't realise just how hard things can be. You have no bills, little to no responsibilities and everything is so much easier.
I actually had this conversation with my wife the other day. We decided we would raise our child to be aware of just how much things cost and teach him from a young age to be successful in life and get the things you want, you have to work for them and that nothing is ever handed to you.
This is why I think it is important to instil good values into your children from a young age and teach them the importance of money, how it is earned and where it is spent. When they're old enough to do things for themselves, encourage them to earn money through chores but also ensure they do some chores for free. Maybe give them a few dollars for mowing the lawn, but make them do the washing up and clean their room for free.
When I was about 10, my father who is a small engine mechanic gave me a full can of fuel, a whipper snipper and a mower. He then suggested I go door-to-door and ask people in the street if they would like their lawn mowed for $15 (for a small yard). When the fuel ran out, I had to use my own earned money to buy more fuel, oil (for two stroke mixture) and whipper snipper cord. I remember one stage I had like $40, but I spent half of that on fuel, oil and cord.
Because of that experience my father taught me, I believe it actually made me grow up to be more conscious of money and taught me the basics of running a business and managing money. I have very little personal debt, I earn an okay salary and have some savings. Sadly, we're seeing the current generation getting into massive amounts of debt thanks to credit cards, expensive electronic items and even in-app purchases on our cellular phones.
I learned to be more budget conscious when I go shopping with my wife because I grew up going to the store with my mother who knew to go at a certain time of day to get discounted; fruit, meat and vegetables. The importance of buying in bulk, the importance of knowing what you want to buy by writing a shopping list before you even set foot in the store.
When I was growing up, money was a taboo subject that my parents didn't like discussing in-front of me and my siblings. I would see my parents sometimes argue about money, not very often, but I didn't really know first-hand some of the stresses until I got older and paid more attention. I wish my parents involved me and my sisters in the budgeting process so we could all be a little more grateful for what we had and the sacrifices my parents had to make raising us.
Honestly, I think the whole money subject should be taught in school. I know some schools do to an extent, but children need to be taught the honest basics and realities of everyday life financial responsibilities as an adult and the consequences of things like debt.
I actually had this conversation with my wife the other day. We decided we would raise our child to be aware of just how much things cost and teach him from a young age to be successful in life and get the things you want, you have to work for them and that nothing is ever handed to you.
This is why I think it is important to instil good values into your children from a young age and teach them the importance of money, how it is earned and where it is spent. When they're old enough to do things for themselves, encourage them to earn money through chores but also ensure they do some chores for free. Maybe give them a few dollars for mowing the lawn, but make them do the washing up and clean their room for free.
When I was about 10, my father who is a small engine mechanic gave me a full can of fuel, a whipper snipper and a mower. He then suggested I go door-to-door and ask people in the street if they would like their lawn mowed for $15 (for a small yard). When the fuel ran out, I had to use my own earned money to buy more fuel, oil (for two stroke mixture) and whipper snipper cord. I remember one stage I had like $40, but I spent half of that on fuel, oil and cord.
Because of that experience my father taught me, I believe it actually made me grow up to be more conscious of money and taught me the basics of running a business and managing money. I have very little personal debt, I earn an okay salary and have some savings. Sadly, we're seeing the current generation getting into massive amounts of debt thanks to credit cards, expensive electronic items and even in-app purchases on our cellular phones.
I learned to be more budget conscious when I go shopping with my wife because I grew up going to the store with my mother who knew to go at a certain time of day to get discounted; fruit, meat and vegetables. The importance of buying in bulk, the importance of knowing what you want to buy by writing a shopping list before you even set foot in the store.
When I was growing up, money was a taboo subject that my parents didn't like discussing in-front of me and my siblings. I would see my parents sometimes argue about money, not very often, but I didn't really know first-hand some of the stresses until I got older and paid more attention. I wish my parents involved me and my sisters in the budgeting process so we could all be a little more grateful for what we had and the sacrifices my parents had to make raising us.
Honestly, I think the whole money subject should be taught in school. I know some schools do to an extent, but children need to be taught the honest basics and realities of everyday life financial responsibilities as an adult and the consequences of things like debt.
I personally figured most of this out whilst growing up by just, well, looking at what we had, where we lived, occupations, etc. All the data is there... I saw a world dominated by fun coupons, researching it was just a given, like asking 'why is the sky blue?'.
What I can remember intensely, is thinking that the amount of work that seemed to occur for what we had seemed obscene. It was very difficult not to see that as a failing in my parents. (I don't feel that way now). Why would they choose to work for such low pay? The people on the TV, on the Internet seemed to be doing well.
I try, but it's hard to not feel despair when reading these sorts of articles. There are so many issues with this... the college debt throwaway, for example. The choice looks completely different to a poor child in social housing, than it does to a child whose parents are well on the way to owning the family home outright.
What I can remember intensely, is thinking that the amount of work that seemed to occur for what we had seemed obscene. It was very difficult not to see that as a failing in my parents. (I don't feel that way now). Why would they choose to work for such low pay? The people on the TV, on the Internet seemed to be doing well.
I try, but it's hard to not feel despair when reading these sorts of articles. There are so many issues with this... the college debt throwaway, for example. The choice looks completely different to a poor child in social housing, than it does to a child whose parents are well on the way to owning the family home outright.
I grew up with no idea how much my parents made and they often sent very conflicting messages about how much they had or how much we were able to spend, giving me money freely one minute and then screaming at me for being selfish about money the next. I never did have a clear picture and probably never will, after a while I didn't care. If I got something I got it, if I didn't then I didn't. Instead of money being used as something I could earn respect with or be trusted with, they used it to control me and get me to do things whenever they wanted.
Now I am older and they desperately beg me to know about my finances. I don't answer and I plan on never giving them the slightest clue. There is a complete lack of mutual respect and this is something I WILL NOT screw up with my kids if I ever have any.
Now I am older and they desperately beg me to know about my finances. I don't answer and I plan on never giving them the slightest clue. There is a complete lack of mutual respect and this is something I WILL NOT screw up with my kids if I ever have any.
> Each month, she has them sit with her while she pays the tuition online, asking them to click the button. “We jokingly say that it costs $92.50 to send them each to school every day,”
I don't like this at all. If you decide to send your kids to private school, don't lord it over them and make their education a source of guilt to keep them in check.
I don't like this at all. If you decide to send your kids to private school, don't lord it over them and make their education a source of guilt to keep them in check.
> don't lord it over them and make their education a
> source of guilt to keep them in check
It probably wasn't their choice not to go to a public school (and if it was, come on, they shouldn't have the ability to make that choice all by themselves).
I knew what my parents made as long as I can remember. THey also explained there health care and retirement situation to me at a young age. This helped me realize that since they are teachers and were grandfathered into the systems before benefits started getting massively cut that I needed to take into account more then just my salary. While my starting salary was much higher then theirs with inflation taken into account I also realized that I had t start saving as soon as I got a job. I am lucky that I enjoy programming and it allows me to live comfortably. While if money were no issue I may have gone into history talking with them about finances made me realize that I should find a happy medium with something I both enjoy and will allow me to be comfortable.
We got our daughters checking accounts when they were 8. (actually USAA savings accounts that you could write 3 checks a month on) and we set up some auto-deposits for their allowance.
Generally the question wasn't about how much money we made, rather it was about how money "works". And why would you save it rather than spend it, and what is debt, and what are luxuries. We also made some of the things that other parents were paying for out of pocket, come out of their allowance. That exercise forces them to choose amongst a couple of things to spend their money on, and they get to experience both good and bad choices. Like spending money on going to a movie versus waiting and buying it as a DVD and having a movie night at home with your friends. Same net expenditure of cash but very different experiences.
And we tried to impress upon them the notion of 'current' money (money in the bank) 'future' money which was inbound assuming you met the conditions, 'mandatory' expenses, and 'optional' expenses.
The goal was to show how saving money "pushes" it into the future while taking on debt "pulls" money from the future into the present.
I think in general we were reasonably successful. They all knew how to balance a checkbook and make a budget when they got to college. The hard part as a parent is to know that you could make a temporary hardship "go away" but holding back so that your kids can get the experience and feeling of getting past it. The trick is doing it early, so the 'hardship' is they don't have any money left to buy ice cream from the snack shop, rather than something more serious like coming up with enough money to pay first and last month's rent on a new place to stay.
The only thing I really didn't like about the article was responding "Why do you ask?" which is always heard as a challenge by my kids, as if they have over stepped their place by asking a question. I much prefer, "Great question! What are you trying to figure out or understand?"
Generally the question wasn't about how much money we made, rather it was about how money "works". And why would you save it rather than spend it, and what is debt, and what are luxuries. We also made some of the things that other parents were paying for out of pocket, come out of their allowance. That exercise forces them to choose amongst a couple of things to spend their money on, and they get to experience both good and bad choices. Like spending money on going to a movie versus waiting and buying it as a DVD and having a movie night at home with your friends. Same net expenditure of cash but very different experiences.
And we tried to impress upon them the notion of 'current' money (money in the bank) 'future' money which was inbound assuming you met the conditions, 'mandatory' expenses, and 'optional' expenses.
The goal was to show how saving money "pushes" it into the future while taking on debt "pulls" money from the future into the present.
I think in general we were reasonably successful. They all knew how to balance a checkbook and make a budget when they got to college. The hard part as a parent is to know that you could make a temporary hardship "go away" but holding back so that your kids can get the experience and feeling of getting past it. The trick is doing it early, so the 'hardship' is they don't have any money left to buy ice cream from the snack shop, rather than something more serious like coming up with enough money to pay first and last month's rent on a new place to stay.
The only thing I really didn't like about the article was responding "Why do you ask?" which is always heard as a challenge by my kids, as if they have over stepped their place by asking a question. I much prefer, "Great question! What are you trying to figure out or understand?"
Information has value and power when it is scarce and loses value when shared. Honestly, I think more people should be open about how much they make, how much profit margins their businesses have, etc. because transparency in the long run deflects a lot of questions and problems.
Many/most people are basically rational and understand things in somewhat reasonable terms, even if greed is problematic. For example, Bill Gates is worth like $50 billion or whatever. I'm not rushing to take his money, company, or job.
Yet, if I know that I'm charging $85/hr. for developer consulting when my competition is charging $150/hr. perhaps I'd be better off adjusting my rates higher. Or, at $250/hr if I'm already top of market maybe I don't have as much room to raise my rates.
Knowing that I can make rational decisions about what to charge and so on and people won't freak out about that. The way people handle salary negotiations by and large is really bad simply because we are a nation of price takers, not price setters. Thus, the majority takes what they are offered and doesn't bat an eye.
The handful of people with professional negotiators or who are good negotiators themselves are making far more than everyone else.
If you tell your kids how much money you make and explain why, they have a better chance of making the same or more money than you do.
Many/most people are basically rational and understand things in somewhat reasonable terms, even if greed is problematic. For example, Bill Gates is worth like $50 billion or whatever. I'm not rushing to take his money, company, or job.
Yet, if I know that I'm charging $85/hr. for developer consulting when my competition is charging $150/hr. perhaps I'd be better off adjusting my rates higher. Or, at $250/hr if I'm already top of market maybe I don't have as much room to raise my rates.
Knowing that I can make rational decisions about what to charge and so on and people won't freak out about that. The way people handle salary negotiations by and large is really bad simply because we are a nation of price takers, not price setters. Thus, the majority takes what they are offered and doesn't bat an eye.
The handful of people with professional negotiators or who are good negotiators themselves are making far more than everyone else.
If you tell your kids how much money you make and explain why, they have a better chance of making the same or more money than you do.
Revealing the salary is one thing but i think revealing the monthly expenses is even more important for kids to realize how much money actually just "disappears", into recurring bills like rent, for one to live a comfortable life.
There's a reality TV show in Sweden, called the teenage boss(tonårsbossen), where in each episode the teenager of a family get's to control the whole budget for his family for one month. Surely there's selection bias on what type of family they put on the show but it's quite revealing to see how kids think when they get that much money because they don't understand how much or how little it is. Even when the hosts help them lay out a budget they always always end up overspending. First they go buy tons of clothes the first week, they give their parents less pocket money than what they themselves normally got before, the food bill is always double because they don't know what's normal price for grocery items, there's always some recurring monthly expense that's easy to forget like gas for the car, they don't take into account unexpected events like the fridge breaking down, nothing goes into savings etc etc.
I think every kid would benefit greatly from doing this kind of exercise at least once, at least letting them join the budgeting and let them see where the money goes.
There's a reality TV show in Sweden, called the teenage boss(tonårsbossen), where in each episode the teenager of a family get's to control the whole budget for his family for one month. Surely there's selection bias on what type of family they put on the show but it's quite revealing to see how kids think when they get that much money because they don't understand how much or how little it is. Even when the hosts help them lay out a budget they always always end up overspending. First they go buy tons of clothes the first week, they give their parents less pocket money than what they themselves normally got before, the food bill is always double because they don't know what's normal price for grocery items, there's always some recurring monthly expense that's easy to forget like gas for the car, they don't take into account unexpected events like the fridge breaking down, nothing goes into savings etc etc.
I think every kid would benefit greatly from doing this kind of exercise at least once, at least letting them join the budgeting and let them see where the money goes.
There are some good tips in this piece I am definitely going to apply.
Growing up I remember very well that I always felt my parents had a near unlimited budget but that they just didn't buy everything because they wanted me to learn that that was somehow bad. It real took until somewhere in my mid teens to understand that this was not the case.
My father never shared his salary. Taking all this cash home sounds like a lot of fun! OR perhaps you could just sit your kid down and make Python/matplotlib script that shows some pi/bar charts where you add categories... Get the kid excited about programming too ;)
Growing up I remember very well that I always felt my parents had a near unlimited budget but that they just didn't buy everything because they wanted me to learn that that was somehow bad. It real took until somewhere in my mid teens to understand that this was not the case.
My father never shared his salary. Taking all this cash home sounds like a lot of fun! OR perhaps you could just sit your kid down and make Python/matplotlib script that shows some pi/bar charts where you add categories... Get the kid excited about programming too ;)
You should tell your children how much you can do and what you know.
Being is important, not having.
Being is important, not having.
Education is also important. We have created economies so that we can conduct business and allowing children to remain ignorant of these things is a direct harm.
One of the benefits of growing up Jewish is that business talk at the dinner table each evening drowns out even the TV. Of course, you learn pretty quick that not all families are like this.
I'm happy to give lessons but I'll never give an exact net worth. Stealth wealth FTW
http://www.joshuakennon.com/stealth-wealth-why-americas-rich...
I'm happy to give lessons but I'll never give an exact net worth. Stealth wealth FTW
http://www.joshuakennon.com/stealth-wealth-why-americas-rich...
My family, from a Chinese heritage, has a similar thing. We talk about business, our salary, our financial plans etc within ourselves, but silence outside the family. I heard similar stories from other families. I always wonder how pervasive that is in other cultures.
I actually envy you guys. I come from an European Christian family, and it was only my father that occasionally engaged in discussions regarding wealth, earnings, business. It was not a popular thing to do where I grew up. Although I firmly believe this is the right thing to do, properly executed it brings family together and gives support to everyone's plans.
Unless transparency is of the utmost importance to your
occupation, such as sitting on the United States Supreme Court,
it is advisable to keep a significant portion, if not a vast
majority, of your holdings, income sources, and assets a secret,
even from the people you love; your spouse and the IRS, the
obvious exceptions.
I felt like this article actually begs a bigger question, why don't we tell each other how much we make? I get the sense that because we keep this so extremely private, it makes it so much easier for the class division between the wealthy, the 'middle class', and the poor to continue to grow.
If everyone truly understood just how much less the 'rich' people they know earned than any of the 700,000 or so folks in the global elite, would we still be having the same sort of disdain for progressive taxation?
If everyone truly understood just how much less the 'rich' people they know earned than any of the 700,000 or so folks in the global elite, would we still be having the same sort of disdain for progressive taxation?
Because it leads to discontent:
www.youtube.com/watch?v=meiU6TxysCg
I think the title could have been rephrased.
It's definitely a good idea to build some financial sense from young age, helping kids figure out how budgeting works, where the money gets spent, how it all works, etc. It also works if they are able to learn why someone pays you that money in the first place - how a business makes profit because of your work, which justifies the salary (or some other value gained if it's a non-profit organisation). Finally it also makes sense to let them understand money as a means of exchanging value, rather than some magical paper that just helps buy stuff.
The earlier they learn about stuff like interest rates, debt, investments, etc. the better prepared they are to take on their life.
However, just telling kids that "hey kids, I make $xxxx" and doing nothing after that is never a great idea!
It's definitely a good idea to build some financial sense from young age, helping kids figure out how budgeting works, where the money gets spent, how it all works, etc. It also works if they are able to learn why someone pays you that money in the first place - how a business makes profit because of your work, which justifies the salary (or some other value gained if it's a non-profit organisation). Finally it also makes sense to let them understand money as a means of exchanging value, rather than some magical paper that just helps buy stuff.
The earlier they learn about stuff like interest rates, debt, investments, etc. the better prepared they are to take on their life.
However, just telling kids that "hey kids, I make $xxxx" and doing nothing after that is never a great idea!
> “We jokingly say that it costs $92.50 to send them each to school every day,”
That might actually have an adverse effect. Kids doing worse at school for whatever reason, get a huge guilt complex because their parents pay a lot of money for them to be there. Reminds me of the "disappointed Asian parents" meme / stereotype.
That might actually have an adverse effect. Kids doing worse at school for whatever reason, get a huge guilt complex because their parents pay a lot of money for them to be there. Reminds me of the "disappointed Asian parents" meme / stereotype.
Some parts of this article struck me as bizarre, like the "Why do you ask?" part. And the parenthetical "this also works well for questions about sex and drugs" was even worse! I guess in some cases it's useful or important to ask "Why do you ask?" but using that line every single time? I think that would get old very fast.
The counter-examples seemed plastic. Who doesn't tell their kids "because it costs too much money" when they ask for some stupid toy they are going to play with for 5 minutes and then forget. I explain the cost of things all the time to my kids, it would never occur to me to dodge the subject.
The counter-examples seemed plastic. Who doesn't tell their kids "because it costs too much money" when they ask for some stupid toy they are going to play with for 5 minutes and then forget. I explain the cost of things all the time to my kids, it would never occur to me to dodge the subject.
I don't tell my kid how much I make because they use it to compare with the other kids' parents. It is uncomfortable and embarrassing to overhear them bragging among themselves that their dad earns more than that ones.
It's easy, if you don't have kids, to theorize on how you should instruct and mentor your would-be offspring, but few plans survive first contact with the real world.
It's easy, if you don't have kids, to theorize on how you should instruct and mentor your would-be offspring, but few plans survive first contact with the real world.
I love seeing this. I run a full-disclosure household. We talk about money (savings, income, assets for now; they're young) and careers and aspirations often. Justice themes bubble up naturally out of this. As a parent, I can only recommend bringing your kids into the conversation.
Basically: instead of performing QE by giving all the new money to banksters, we give a Universal Dividend to all human being, at a rate determined from the average lifespan, so that each human being gets the same relative amount of money during his life who ever he is, and WHENEVER he lives. (Of course, this doesn't precludes normal economic exchanges, and therefore differences in paychecks, but at least the QE are done systematically in a reasonned system, contrarily the aphasard releases of the Fed). (For the European Union, given the average lifespan here, this would give a Universal Dividend of about 500€/month).