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Old 05-06-2008, 06:33 PM   #61
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My parents were intelligent people with a high school education who actually did a great job of managing their money. They shared their understanding of basic finance with me as early as I was able to absorb it. They had a healthy fear of debt for consumer goods and believed in paying off mortgage debt ASAP. I had a bank account since babyhood and can still remember going to invest my communion money and reviewing the compound interest with the bank teller. I recall reading my Dad's retirement planning brochures when I was 10 and he was 50 (he figured it was time for some serious retirement planning but didn't retire for anther 12 years). I remember learning about mutual funds, dividends and withholding taxes at age 12 when my Mom had an inheritance and years later, when she put it in trust for me, learning about estate planning. As soon as I became an adult, my parents and I made a list of all our accounts and exchanged it. I didn't need to know their cash flows or net worth. They never calculated NW anyway, because they had structured excellent pension income. When she needed eldercare Mom agreed to put my name on one of her accounts so I could take care of the bills.and appointed me as executrix, I really appreciated having a good understanding of the financial situation. Keeping me in the loop enabled me to help them, prevented much worry, and certainly has significantly helped me to become LBYM and FI.
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Old 05-06-2008, 06:34 PM   #62
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I hope their kids drove them to the games !

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Old 05-07-2008, 08:28 AM   #63
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I'm 25. I have an idea of what my mom inheritted from my grandfather, and guess that my father is somewhat well off. But neither or them have intimately discussed their finances with me. My grandfather always said "Let everyone else believe you have nothing more than a pot to piss in." He was very well off but led no one to believe that he was.
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Old 05-07-2008, 01:22 PM   #64
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70's is not that old . This is the second post I've seen infering that 70's is old . . . I for one am not giving up my independence until it is time and I seriously doubt it will be in my 70's.
Sorry to hijack the thread but need to briefly add my agreement here with Moemg.

I have two friends who are 70. One is almost finished earning a Masters Degree in linguisitics that she started at age 68. The other travels all over the world without her husband because he doesn't like to go anywhere the citizens don't speak English. She is full of fun and did the zip line in Costa Rica!

I hope that I am similarly awake and energetic at 70.

Back to the topic. My parents never talked to me about money, gave me a measly allowance and pretty much told me you're on your own after high school. My dad had never talked about money with me until my divorce and he wanted to find out how much I ended up with. Also in recent years he has shown me his investment balances. I guess he wants me to know that he has enough to take care of all his needs.

That's basically my attitude with my grown children. I let them know that I have the means to support my lifestyle so they don't worry that I'm spending too much when I go traveling to exotic places.
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Old 05-07-2008, 04:45 PM   #65
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I never knew what my parents were making when I was a kid. I don't know what I would have done with the information had I known.

I did find out when we bought our first house in 1975 (payments $198 ) that my mom and dads first house (1948 ) cost them $57 a month on $200 a month income.

I also know when my grandfather retired from the railroad in 1957 he was making about $80 a week. Found that little tidbit in his diary.

After my dad died in 88 my younger sister thought she could help herself to manage mom's money. She couldn't wait to find out where and how much there was. She got more than a little bent out of shape when mom told her to butt out and whatever was left when she got done with it would be divided three ways.

Mom's plan was to spend all her kids inheritance.

About the most sage advice I got from my parents about finances...Money doesn't grow on trees.
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Old 05-07-2008, 05:37 PM   #66
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I always worried about my dad's financial situation. He was super paranoid about discussing his finances and suspicious of any effort on our part to assess his financial situation. I didn't want to kill him and take his money, I just wanted to make sure that he had enough to buy groceries and pay bills. After my mom died, he got so that he only ate soup and crackers. We couldn't tell if he was depressed or poor.

Being a depression child, he was also constantly afraid that he would run out of money, so he lived super frugally, which was good, but he also wouldn't fill prescriptions or get new eyeglasses and so on, which was bad. We were never able to talk to him about finances. Period.

I remember he had a rage attack when I was filling out my FAFSA (35 years ago) and he refused to submit any of his financial information, which made it tough on me. I guess that was his privilege, though.

I have no reason to fear my kids. They will become co-executors on our estate when they are old enough. Neither one is particularly greedy or acquisitive, so I have no worries about them slipping rat poison in my soup. Beats a nursing home, anyway.
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Old 05-07-2008, 08:44 PM   #67
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This is a long thread - I'll try to add one thing I haven't heard so far.

I wish we would have shared more about our spending with our kids when they were early teens - weekly food bill, utilities, clothes, etc.

The reason is that we covered their basic college costs, and they were very high compared to our LBYM lifestyle. I think the kids could have made the comparison and felt the importance we were putting on getting them through school without loans.
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Old 05-07-2008, 10:46 PM   #68
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Good point. I thought I was fairly financially aware as a youngster but in retrospect one thing I had no clue about was what it cost my parents to send me through college. As I now look back at all the flights home for breaks, long distance phone calls back when that was expensive, not to mention tuition room and board which was expensive even with financial aid and loans.

These days living as a frugal FIRE, I can't imagine paying the costs of sending even myself to school.
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Old 05-08-2008, 08:13 AM   #69
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My folks at no time EVER talked about finances with me. If I get marrried and have children, I will not make that kind of mistake. Fortunately in my late 20's a friend of mine started talking to me about retirement, 401k, reccomended this forum, etc. I owe him an enormous debt of grattitude. Without the flash of inspiration I would not be in the much better situation that I am today.
To this day, I still have no idea what my folks financial situation is. But I gather it is probably not too good. When I mentioned to my father that he should have around 1 million for retirement his eyes got really big, and he confessed, he had no where even near that much (he is currently 62). Sadly my folks seem to live (and have lived for most of their lives) in a permanent state of denial, and wishful thinking. My mother has taken on the attitude that she is retired already, and that all financial stuff is my fathers job. So I bought a few retirement books for my father, which I guarantee will sit on a shelf and never be read.
I truly believe the reason why so few parents talk to their children about the financial situation, is lack of planning for, or thinking about the future. There are so many people that I have met that view retirement as something that just sort of "magically" happens, without any planning or forethought on the part of the retiree. I can remember mentioning to my mother that I am currently saving for retirement. Her reaction was, "You are far to young to even think about that right now". Some people still believe that somehow the job, govt, children, will be taking care of them completely one day, so why bother. They live blissfully unaware that sooner or later reality will make a comeback into their lives, and it will probably not be too pleasent.
Just a question to the forum. I personally beleive that my folks will be heading for a complete financial train wreck in the next 10-15 years. (This is when the reality of their situation will finally dawn on them). I realize that I will prbably have to financially save the day at some point (still considering how much I will want do or not). Can I start some sort of tax defered fund if I want to help offset this eventuality? I have the standard 401k, roth IRA, bank savings, etc. I was just wondering if there was some sort of (save your parents in 20 years because they left their future to chance) fund out there somewhere. Probably not... but I thought I would ask anyway...
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Old 05-08-2008, 08:20 AM   #70
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I was just wondering if there was some sort of (save your parents in 20 years because they left their future to chance) fund out there somewhere. Probably not... but I thought I would ask anyway...
There needs to be a fund like that. Maybe there will be 20 years from now as more aging parents are unable to care for themselves and don't have any money saved up for long-term care. However, in most cases the children who'd be taking care of them aren't much better off!
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Old 05-08-2008, 10:53 AM   #71
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....
I remember he had a rage attack when I was filling out my FAFSA (35 years ago) and he refused to submit any of his financial information, which made it tough on me. I guess that was his privilege, though.
....
My did didn't have a rage attack (although that was within his personality), he just didn't fill out the forms. Years later my mom appolozed for that. My sibs speculated that he didn't want me to know that he had a large business debt. Family legend goes that his partner moved out over night taking all the equipment with him. It seems that my dad finished paying off that debt some 30 years later, just before he died. My sister was older and remembers the expression on dad's face when he saw that his partner's house was empty.
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Old 05-08-2008, 04:11 PM   #72
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I believe that kids should have some idea of their parents financial situation.

I recently discovered that my parents are in a financial mess. We did not know since it was taboo to discuss finances with them (don't ask, don't tell). However, as they are entering retirement, I forced the issue to better understand their retirement income.

I was shocked. 0 net worth and declining. Large credit card debt that consumes majority of income. It is clear that I will need to provide some sort of bailout but would have been much better off had I knew what was going on several years ago. Culprit here is that they have (and are) living beyond means and do not understand the credit card game. We now have a game plan, but will be painful.

I discuss financials with my 9 yr old to reinforce the fact that the way some of her friends live is not normal (we live in an affluent neighborhood) and encourage savings and spending below means. She knows that college and neccessities are on us. Discretionary items come out of her allowance but we are happy to know that she is a saver (brokerage acct is at $4k and growing). She senses that we make a good living but that there is no free lunch.

Overall, I think sharing financial information with the kids is a great learning opportunity (call it a real life case study) and can only help.
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Old 05-08-2008, 05:37 PM   #73
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\ She senses that we make a good living but that there is no free lunch.

Overall, I think sharing financial information with the kids is a great learning opportunity (call it a real life case study) and can only help.
Soooo..... does she just sense that you make a good living? Or did you share financial information? You know, actually show her the add up of your total net worth, your check stubs, etc.

I think most have agreed it's good to discuss finances in general with the kiddies, but OP wants to know if we share our detailed salary and net worth information.
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Old 05-08-2008, 06:57 PM   #74
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My kids know where the safe is, where the list of our accounts is in it and our general net worth. They knew what we were making college years and what we had saved for them as well as what we gave them. We showed them 401K balances and how they went up each year.
Now approaching thirty, they have good 401k's and ask for advice on how to asset allocate etc. They talk about saving up for things instead of paying credit. I believe this is due to our influence.

If they want to kill me for my money I don't want to live anymore so have at it.
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Old 05-08-2008, 07:14 PM   #75
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I've tried to teach my kids a few basics about money:

1) Avoid debt, debt is evil.
2) LYBM
3) Look after your finances, no one else will

That being said, they have no clue of our NW. If they did (and thought they might inherit), they might try to ER at 25 & 28.

I always thought I could guess the finances of my M and FIL. I was executor for both. When M died, I guessed within 5% what her estate was worth (although she had never discussed it with me). When FIL died, I was shocked at what he had, the ultimate LYMB'er.

I hope my kids get a similar shock, whether or not they are the recipients.
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Old 05-08-2008, 07:52 PM   #76
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Generally kids think: "having lots of stuff equates to being rich".

We've tried to show the kids there's no correlation between "stuff" and "being rich" (if anything, an inverse relationship....).

We have talked in general terms about families as examples: comparing family's probable income and their consumption habits.

I would not give kids specific details on income and net worth.
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Old 05-08-2008, 08:01 PM   #77
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Delawaredave5....

I understand where you're coming from but sort of disagree. I think the rich frequently have lots and lots of nifty toys, big homes, travel a lot, drive fancy cars and all that. And they have nice portfolios that they constantly add to because, despite the expense of all their material possessions, they are LBYM!
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Old 05-08-2008, 08:21 PM   #78
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Delawaredave5....
I understand where you're coming from but sort of disagree. I think the rich frequently have lots and lots of nifty toys, big homes, travel a lot, drive fancy cars and all that. And they have nice portfolios that they constantly add to because, despite the expense of all their material possessions, they are LBYM!
Yes, there's rich people with lots of stuff and still save a lot.

Unfortunately, there's many more Americans that "look rich" and spend everything they earn. We've tried to show our kids the downside of this behavior.

We've tried to teach the kids that "life is more than stuff". We've demonstrated this through our lifestyle - driving used cars and travelled with the kids all over the US and Europe (frugally, of course)...
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Old 05-08-2008, 08:40 PM   #79
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Yes, there's rich people with lots of stuff and still save a lot.
Yep. That's why we call them "rich."
Quote:
Unfortunately, there's many more Americans that "look rich" and spend everything they earn. We've tried to show our kids the downside of this behavior.
I always had the problem of looking poor and spending everything I earner......
Quote:

(frugally, of course)...
of course.......
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Old 05-08-2008, 11:13 PM   #80
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I don't see any need to share net worth with minor children, but I could easily see the value of a simple analysis like:

This is what we earn a year.
These are the expenses that it pays for.
This is how we maintain our emergency fund.
This is how we saved our car fund.
Here's how much college will cost and how we are saving for it.
Here's how much retirement will cost and how we are saving for it.
Here's how much the plasma TV cost and how we saved for it.
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