"So which is it, Mom and Dad? Are we rich or are we poor?"

[Aelias]

My husband and I had a good laugh the other day realizing that, as our kids get older and start comparing lives with their friends and thinking more about concepts like "rich" and "poor", they're going to be totally baffled by our lifestyle. We played out how the analysis might go:

--We had a playroom full of toys (rich), but most of them were second hand (poor).
--We had a single family house (in our area, rich) that we were constantly working on ourselves (poor).
--We had a fancy wood-burning stove in the living room where we'd make fires (rich) with wood we got for free when a tree went down at a friend's house (poor) because we kept the house so cold (poor).
--We went on plenty of vacations (rich) but mostly long road trips (poor) with packed lunches (poor).
--We watched Hulu and Netflix on the iPad (rich) until Hulu stopped working because the iPad was 10 years old (poor).

Anybody else going to confuse their kids with their own weird combination of rich and poor habits?

[okits]

Absolutely!  Though until they’re older I think they’ll just more be puzzled as to why I have no shame around having “poor” habits (washing and reusing milk bags, mending clothes, bringing our own food and water, etc.), though I’d like to think I talk about reducing waste and healthy living as well as frugality).

[Louisville]

Absolutely!  Though until they’re older I think they’ll just more be puzzled as to why I have no shame around having “poor” habits (washing and reusing milk bags, mending clothes, bringing our own food and water, etc.), though I’d like to think I talk about reducing waste and healthy living as well as frugality).

Ok, I'll bite.
WTF is a milk bag?

[UndergroundDaytimeDad]

Absolutely!  Though until they’re older I think they’ll just more be puzzled as to why I have no shame around having “poor” habits (washing and reusing milk bags, mending clothes, bringing our own food and water, etc.), though I’d like to think I talk about reducing waste and healthy living as well as frugality).

Ok, I'll bite.
WTF is a milk bag?

Canadian thing.  Relic of complete compliance with the Dairy Commission (supply management cartel) https://en.wikipedia.org/wiki/Canadian_Dairy_Commission

Milk in Canada can't be sold in whatever types of containers that customers or even retailers may want, there are a select amount of permitted shapes and types of containers.  Big ones in Ontario are bags (think easily torn plastic garbage around a liquid) and cartons of two sizes. 

Dairy supply management is one of the most contentious political issues in Canada, while also being incomprehensible to the rest of the world. 

[moof]

I am waiting for that day to come any time.  Our kid has yet to figure out that there may be more video games out there than the half dozen Wii games we have for our ~13 year old console.  Meanwhile we have an obscene amount of Legos, which I can only attribute to personal weakness and over the top grandparents.  Mostly personal weakness though.

[Morning Glory]

Absolutely!  Though until they’re older I think they’ll just more be puzzled as to why I have no shame around having “poor” habits (washing and reusing milk bags, mending clothes, bringing our own food and water, etc.), though I’d like to think I talk about reducing waste and healthy living as well as frugality).

Ok, I'll bite.
WTF is a milk bag?

Canadian thing.  Relic of complete compliance with the Dairy Commission (supply management cartel) https://en.wikipedia.org/wiki/Canadian_Dairy_Commission

Milk in Canada can't be sold in whatever types of containers that customers or even retailers may want, there are a select amount of permitted shapes and types of containers.  Big ones in Ontario are bags (think easily torn plastic garbage around a liquid) and cartons of two sizes. 

Dairy supply management is one of the most contentious political issues in Canada, while also being incomprehensible to the rest of the world.

I am in the US and we get milk in a bag from the gas station (seriously that is the cheapest place for milk in my town). The bags need to be cut open so are not reusable.

[kanga1622]

My kids hear a lot of “that’s not in the budget” or “that’s just too expensive.” We talk a lot about only having a finite amount of income and planning how to spend it before any is actually spent. It isn’t unusual for us to talk to the kids about how required monthly payments make your life very inflexible when challenges arise.

We have a TON of Legos. The biggest original amount came from a garage sale. A good majority of the additional Legos have been gifts. Or the kids have earned money by making good behavior choices that helped to purchase the most expensive Lego set.

We do have a new sofa and sectional but the kids hear often that this is the first new furniture we have ever bought. And we had a free couches for 10 years before buying this furniture.

I wanted a captain’s bed for our youngest because the (second-hand) captain’s bed for our oldest was such a great storage option. When I couldn’t find a reasonable price for what I wanted, I built my own. The kids routinely see me taking apart the dryer to clean the lint system, installing updated light switches, grooming the dog, cutting DH’s hair, and making minor clothing repairs with my basic sewing machine.

We hope the kids continue to incorporate the tidbits of information we sprinkle into our conversations. I don’t want them to feel rich or poor. We want them to feel comfortable enough not to worry but also know that having a saving and spending plan is critical to being financially solvent.

[RFAAOATB]

When do kids start noticing economic differences?  There’s a lot of economic inequality within families.  Have any of you had problems with your kids noticing that some cousins have more or less toys or some cousins go on more or fewer expensive vacations?  How do you have nice things without having a kid be big headed about it?

[okits]

Absolutely!  Though until they’re older I think they’ll just more be puzzled as to why I have no shame around having “poor” habits (washing and reusing milk bags, mending clothes, bringing our own food and water, etc.), though I’d like to think I talk about reducing waste and healthy living as well as frugality).

Ok, I'll bite.
WTF is a milk bag?

Canadian thing.  Relic of complete compliance with the Dairy Commission (supply management cartel) https://en.wikipedia.org/wiki/Canadian_Dairy_Commission

Milk in Canada can't be sold in whatever types of containers that customers or even retailers may want, there are a select amount of permitted shapes and types of containers.  Big ones in Ontario are bags (think easily torn plastic garbage around a liquid) and cartons of two sizes. 

Dairy supply management is one of the most contentious political issues in Canada, while also being incomprehensible to the rest of the world.

I am in the US and we get milk in a bag from the gas station (seriously that is the cheapest place for milk in my town). The bags need to be cut open so are not reusable.

Once all the milk is consumed I cut the top all the way open, wash the bag, then put whatever other food in it and tie the top shut with a knot or by twisting the top into a rope, folding it on itself, and securing that with a rubber band.  As @Le Poisson stated, it’s food-safe plastic and they work great in the freezer for small-quantity things.

[A Fella from Stella]

I'm in the same boat.

My house is very old (poor), but the new playground rivals the park around the corner (rich).

I paid cash (rich) for a used (poor) Civic, which was totaled 2 months later, so I paid cash (rich) for a used Kia while haggling (rich) for a month with the insurance co over a fair settlement.

Most of our travel includes free stays (poor) with friends and family. We used to go to timeshare presentations, but the "hour long" presentations got too annoying.

We're skipping out on a wedding, but sent the bride and groom a generous gift in advance since they are paying for it.

I haven't contributed enough to my Roth IRA (poor), but my kids have retirement accounts (rich).

[Morning Glory]

Absolutely!  Though until they’re older I think they’ll just more be puzzled as to why I have no shame around having “poor” habits (washing and reusing milk bags, mending clothes, bringing our own food and water, etc.), though I’d like to think I talk about reducing waste and healthy living as well as frugality).

Ok, I'll bite.
WTF is a milk bag?

Canadian thing.  Relic of complete compliance with the Dairy Commission (supply management cartel) https://en.wikipedia.org/wiki/Canadian_Dairy_Commission

Milk in Canada can't be sold in whatever types of containers that customers or even retailers may want, there are a select amount of permitted shapes and types of containers.  Big ones in Ontario are bags (think easily torn plastic garbage around a liquid) and cartons of two sizes. 

Dairy supply management is one of the most contentious political issues in Canada, while also being incomprehensible to the rest of the world.

I am in the US and we get milk in a bag from the gas station (seriously that is the cheapest place for milk in my town). The bags need to be cut open so are not reusable.

Once all the milk is consumed I cut the top all the way open, wash the bag, then put whatever other food in it and tie the top shut with a knot or by twisting the top into a rope, folding it on itself, and securing that with a rubber band.  As @Le Poisson stated, it’s food-safe plastic and they work great in the freezer for small-quantity things.

Ahh, I will have to start doing that when I save bones to make soup. The milk bags are a little heavier plastic than the Ziploc freezer bags.

[Cranky]

I always emphasized "Those aren't really our values..."

My kids thought we were poor when they were elementary school, because we didn't have an above ground pool, a trampoline, and we shopped at the thrift store and yard sales. I tried hard to explain to them why those were things that we choose.

Once they got to middle school, they started to notice the many things that they had that their friends did not have.

But we have consciously lived in a "poorer" neighborhood. My kids are grown now, and I am happy with the choices we made. They really did line up with our values.

[Slow road to freedom]

I love this. Our kids know that work income is good, but don't realise the savings rate (c 75%) - but they don't miss what they've never had. And my eldest has just finished Rich Dad Poor Dad, has The Simple Path To Wealth to read next, and my youngest is talking about being FI before children. That's just after the 'ooh, can I have one of those...' questions.

No idea where those thoughts came from ...

[SimpleLifer]

I answer this question by focusing on how much money I save each month, both tax-deferred and post-tax savings and how much money we are not spending buying things we don't need. 

Then I tell them that we are rich because of these things...not because of the car we drive (depreciating asset) or the house we live in.

[living_la_vida_mi]

I would say it depends on the perspective and how you define these words. Compared to some people we are poor, but to others we are rich. Right now my son (7) is fixated on numbers and asks HOW MUCH we really have every so often (wants to hear an astronomical number). I just say we have enough, and it depends if we just spent or saved that day/ week. He does not like this answer too much LOL.

[Margie]

We used to tell our kids that 'we don't chose to spend our money that way" if they asked for things out of budget or just things we didn't want them to have.  As they got a bit older we would tell them we were saving for their education and to take them on holidays (my kids have been to a lot of places VS having a lot of stuff).

Now that they are teens they know if they study we will cover most or all of their education...VS the many friends who had tons of stuff who are now realizing how little if any money their parents have saved.  It has been eye opening for them.

I would say we are reasonably generous with our kids - we don't buy them a lot of stuff but we do buy them good gear (bikes, sporting equipment, etc...)  We let them play travel sports and generally keep them busy with wholesome activities.    (hiking, biking, camping, fishing....etc...) 

They don't feel deprived and now that they are working PT they seem to have a reasonably good grasp on thinking through purchases that they want by considering how many hours of work it takes to earn the money.

I have also started sharing our financial statements so they can see how things work...and I have promised them that baring any really traumatic event our biggest gift to them is that we will not be a financial drain on them when we are older. 

I truly do think financial literacy is one of the greatest gifts you can share with your kids.  If they do their 20s right they are laughing and will save them so much stress!

[TVRodriguez]

Lots of great answers here.  Earlier this year we had the question from our oldest about how come we're "not rich."  Here's a thread about that with lots of great comments from other posters:

https://forum.mrmoneymustache.com/mini-money-mustaches/'mom-why-aren't-we-rich'/

[Dicey]

Love this topic!

[Hirondelle]

I'm not a parent yet, but I was a kid not too long ago and I loved how my mom handled these type of questions with me and my siblings.

My best friend who happened to live next door had 2 college educated working parents with high salaries. Upper middle class/upper class. But also lots of overtime. My friend would regularly stay at our house bc her parents weren't home yet. We were a working class family with my dad working full time and my mom being a SAHP when I was young, picking up some part time gigs later.

Best friend went for a 4 week camping holiday to France each year. We usually went 1 week camping in our own country. When I asked why we didn't go for longer holidays my mom told me that it was too expensive. She asked me if I wanted her to work more so we could afford a longer holiday, but that it would come with the trade off that she wouldn't be there during lunch break or after school or that my dad would get home later from his job bc he'd have to work overtime. 6yo me picked everyday quality time over holidays to France in a heartbeat.

[Aelias]

I remember the "Mom, why aren't we rich?" thread, @TVRodriguez !  A Forum Classic, and really well handled on your part.

My six year old hasn't really figured out rich versus poor lifestyle signifiers yet, but yesterday he suggested that we should live in a bigger, fancier house.  Our house is neither big nor fancy, but because it's in a HCOL, it's actually worth a truly ridiculous amount, but he doesn't know that.  I pointed out that to afford a bigger, fancier house, me and Dad would have to work harder and we wouldn't get to spend as much time with him, and that would make me sad because I love him and I like spending time with him.  I said I liked our current house because we could afford it without having to work so hard.  Watching his reaction was like watching a lightbulb turn on. 

[TVRodriguez]

I remember the "Mom, why aren't we rich?" thread, @TVRodriguez !  A Forum Classic, and really well handled on your part.

Sweet of you to say!

My six year old hasn't really figured out rich versus poor lifestyle signifiers yet, but yesterday he suggested that we should live in a bigger, fancier house.  Our house is neither big nor fancy, but because it's in a HCOL, it's actually worth a truly ridiculous amount, but he doesn't know that.  I pointed out that to afford a bigger, fancier house, me and Dad would have to work harder and we wouldn't get to spend as much time with him, and that would make me sad because I love him and I like spending time with him.  I said I liked our current house because we could afford it without having to work so hard.  Watching his reaction was like watching a lightbulb turn on.

That's sweet, too.

[zolotiyeruki]

I find it interesting that "rich" and "poor" are most frequently defined by a comparison to other people.  We mostly homeschool our kids, so they aren't exposed as much to the materialism that their public-schooled cousins see (brand name clothes? what's that?).

We used to tell our kids that 'we don't chose to spend our money that way" if they asked for things out of budget or just things we didn't want them to have. 

We've had lots of similar conversations with our kids, which makes me feel awesome, because it teaches the kids how much is tied to choices.  The "we don't choose" line is one I've grown to love, because it emphasizes that 1) people make different choices, 2) they have different reasons for those choices, and 3) they are responsible for their own choices, and the consequences.  It frames the topic in a non-judgmental way--"You're right, the Joneses just bought a brand new SUV.  That's not what I would have done, but it's their money and their choice.  I would have paid $5k for a used Corolla because they're inexpensive, reliable, and economical."

[CindyBS]

For my son who is rather anxious, this question was of upmost importance around age 10 or so when we were going through some rough times.  Essentially, what he was asking us is "are we going to financially be ok?  Will I have to move?  Will I have enough food to eat?  Will I have to leave my school and friends?"  Saying things like "we can't afford it" would have turned his anxiety up to 110% - I would really caution against saying that to an anxious kid - that can lead them to believe their life is less secure than it is.

The answer I gave is:  Compared to the majority of the people you know, and the majority of the people in the world, we are rich.  Compared to super wealthy people that are often showed in movies and on TV - we are poor.  We have plenty of money and will be ok, we just choose to wear used clothes and drive old cars (insert other mustascian activity) so we can go on vacations, go out to eat, (insert item of luxury they'd understand).

I also completely agree that comparison is key.  Among our social group, most families have similar levels of wealth.  But I find going to public school in a diverse school district has been key to his understanding of how others live.  He goes to a school with kids who just came to America from a refugee camp, kids on free/reduced lunch, kids who have never lived in a house, or gone on a vacation, or had parents that were married, etc.  So while he does know the kids who have all gadgets he doesn't, he also knows some who really struggle and that he is pretty lucky.  To me this is one of the biggest benefits of not living in a homogeneous environment.

[Alfred J Quack]

When do kids start noticing economic differences?  There’s a lot of economic inequality within families.  Have any of you had problems with your kids noticing that some cousins have more or less toys or some cousins go on more or fewer expensive vacations?  How do you have nice things without having a kid be big headed about it?

This is one major reason why I won't go to my sister for celebrating the local version of christmas. She gets her kids a bag full of crap with a few expensive toys. My kids get 1 thing, each, paid for by Grandma.

The irritating thing is that when we did participate, she would buy gifts for my kids because she couldn't explain to hers why mine only got one gift. I don't get why her kids wouldn't understand it (8 and 9 at the time) but I think it's mostly because my choises don't match hers and she simply cannot explain because she doesn't get it herself.

My kids have plenty of toys (thrift store, 2nd hand etc) so it's not like they are missing anything...

[zolotiyeruki]

The irritating thing is that when we did participate, she would buy gifts for my kids because she couldn't explain to hers why mine only got one gift. I don't get why her kids wouldn't understand it (8 and 9 at the time) but I think it's mostly because my choices don't match hers and she simply cannot explain because she doesn't get it herself.

That is profound.  Consumerism in a nutshell.

[formerlydivorcedmom]

Saying things like "we can't afford it" would have turned his anxiety up to 110% - I would really caution against saying that to an anxious kid - that can lead them to believe their life is less secure than it is.

It's not just the anxious kids.  I made the mistake of using "That's too expensive/we can't afford it" for a long time, and my oldest, a generally mellow 12-year-old, freaked out when she needed glasses.  Epic crying meltdown.  It was a few days after Christmas, and she thought we'd be really really broke and not be able to eat.  We (deliberately) live in an area where half the kids are upper middle class and half of them qualify for free lunches, so my kids have friends who might have had to choose between glasses and groceries. 

I sat her down and gave her ballpark numbers of our savings and showed her how we structure the budget to make sure we can afford unexpected expenses like glasses.  She promptly announced to her younger siblings that our family is rich. Now we use the language "Spending on X isn't one of our priorities".

Since they were tiny, we've been talking to the kids about the perils of judging people by things they own or how much money they earn.  We talk about the importance of savings and how small choices can impact how many years you have to work.  We talk about looking at value when we purchase something - the cheapest item might not be best, but the most expensive might not be either.  So it made sense to them that we were rich (in terms of assets) yet some of our habits are more like those of their friends who are poor. 

I discovered it's important to talk to more than just my kid, too.  My nephew thought I was rich because we live in a two-story house.  Last time he spent the weekend here, we had a great talk about savings rates and early retirement and looking at employability when you choose a career.  It was eye opening for him, and I think I have a convert now (he's 13).

[Alfred J Quack]

Answer: "you're trapped in a false dichotomy, kids."

Hoorah, force them to use a dictionary!

[meandmyfamily]

This is does get interesting as the kids get older.  I am enjoying this thread!  haha

We re-frame it more as we spend more on our priorities. 

[Pizzabrewer]

I’m loving this thread too. Our kids are 29 and 27 and have embraced the MMM philosophy more than we have. We didn’t raise them in an extravagant fashion by any means but I’m proud to see them taking charge of their financial futures much more than we did.   

[Aelias]

Answer: "you're trapped in a false dichotomy, kids."

LOL -- winner!