Teaching Friends of Children about Money

[Culture]

I am the parent of a young teenager and am starting to see the effects of our lifestyle on our child. While he still treats our money like it grows on trees, he is as frugal with his own money as we are with ours. While it is still to early to tell for sure, I think his is right on track with becoming a rational economic being (at least as we would define the term).

However, he has a best friend that is driving me nuts. Normally, how others raise their children to treat their money or what others think about my financial situation does not bother me (In fact I generally get a kick out of people thinking I am "poor" relative to them). However, my son's friend is as close as he could be to an adopted son without actually filling out the paperwork, so I actually have an emotional stake in his financial education.

His parents are classical high wage earners/big spenders (He is a doctor and his wife is a lawyer who recently had to go back to work to "make ends meet"). While they do not have excessive debt (relative to income), they spend every penny they make and then some (I am good friends with his father and have a pretty good picture of their finances). Even thought we earn about the same annual income, they probably spend twice what we do per year.

My son's friend has made comments to me or my son several times about our "lack" of income. This has always been in appropriate circumstances or manner, not obnoxiously, say when he comments that he wishes we could afford to buy the lake house next to his parent's lake house, which is for sale. He clearly thinks we make only a fraction of what his parents make.

What I would like to tell him is that I am financially independent in my 40's, work only because I want to, and could purchase five lake houses and still and still have enought left over to live on at my current standard of living.
This is not going to happen, because I have a very strong principle that no one is allowed to know our financial status, as I see only negatives and no positives to this situation.

Anyway, I hint around the bush with him, noting that in order to become a capitalist you need capital, and that if you owe money rather than lend it you are on the loosing team rather then the winning team. However, he obviously does not get it, at least not yet. He obviously believes that wealth is a function of what you spend rather than what your save, as this is what has been modeled by his parents.

So, to get to the point, what have your done in this situation? How do you educated the children of others without spilling the beans and begin explicit about your financial situation? Obviously I do model a frugal lifestyle, and I explicitly point out that we save a "significant" portion of our income for the future purposes. He has also seen that when we actually want something, we have no problem purchasing it (I.e. we are not misers). However, I think he would be more impressed if I bought an expensive new car every year, rather than driving a 6 year old Honda with 100,000 miles on it .

[Leonidas]

Quote:

Originally Posted by Culture So, to get to the point, what have your done in this situation? How do you educated the children of others without spilling the beans and begin explicit about your financial situation? Obviously I do model a frugal lifestyle, and I explicitly point out that we save a "significant" portion of our income for the future purposes.

There is a manual for this type of situation - Kiyosaki's Rich Dad Poor Dad.

Sorry, I just couldn't resist.

My youngest son has a friend who sounds similar to the young man you're talking about. One of the things in the area of financial education for my sons was that a few years ago I helped them get organized in going to garage sales and storage unit foreclosures and then reselling the stuff on eBay. The older son got a lot out of it, but the younger one was a little too young. His interest in things financial has grown a lot in the last year or so and I think it may be time to do the "have your own junk business" thing again. It helps that I can use as an illustration a man I knew when I was growing up who started at 10 years-old buying old car batteries and reselling them to scrap yards - when I knew him he was a millionaire several times over with scrap yards across the South.

Anyway, my son really likes his friend and he recognizes how screwed up his folks are in the area of finances (and other areas as well), and we talk about it often. My thought has been to see if I can't get them to partner up in a junk reselling business over the summer.

[HpRyder]

What you say to your "adapted" teenager will have no impact. His parents are his role model. He may or may not learn differently when gets out on his own, unless his family has a very large financial crisis. So continue on as you are, being a role model to your own son to counter balance your neighbors influence.

[HFWR]

When I was a teen, I didn't listen to anyone...

[A854321]

Why do you care what this snotty kid says? I doubt you are going to educate him financially if his parents have laid a poor foundation. He will likely just want more toys as that is what will be reinforced at home.

Just tell him you can't afford the lake house and leave it at that.

[A854321]

The only person he might listen to is your son. If you do a good job of getting your son to understand finances and financial responsibility, he might be able to educate the young lout.

[ats5g]

Quote:

Originally Posted by Culture So, to get to the point, what have your done in this situation? How do you educated the children of others without spilling the beans and begin explicit about your financial situation? Obviously I do model a frugal lifestyle, and I explicitly point out that we save a "significant" portion of our income for the future purposes. He has also seen that when we actually want something, we have no problem purchasing it (I.e. we are not misers). However, I think he would be more impressed if I bought an expensive new car every year, rather than driving a 6 year old Honda with 100,000 miles on it .

How about saying, "Oh, your parents still have to work... that's too bad."

Seriously though, have you met a teenage boy who didn't idolize a person with an expensive hot new car? When I was younger [teenage - mid 20's], I thought my parents where just cheap and purposely torturing me with the 10 year old ford hatchback and no cable. In my late 20's, after having kids, I realized that they were just being sensible.

- Alec

[Bestwifeever]

I understand your intentions are good but you have nothing to gain by "educating" your son's friend. I would be really ticked if my kid came home and said Tommy's mom/dad said whatever about finances, and you could cause a rift between the boys. Also how do you know so much about how much his parents earn and how they spend their money yet they know nothing apparently about your income and how you spend it? Maybe that's part of the problem?

[brewer12345]

Culture, I applaud your notion, but I think you have a tough row to hoe, since this boy's main role models are spendthrifts. Assuming you do not care to divulge your financial details, all you can do is try to make the point that saving early and often keeps you out of a lot of trouble and can make life a lot easier than expensive toys can.

[Grizz]

This topic hits home. My daughters are 9 and 11 yrs. We are a fairly high income family. Although we save a large portion of our money and our house, business, and toys are paid for, we still spend at a level that is a few steps higher than most of their friends families. The kids come with us to the Caribbean every couple of years, we have snowmobiles, ATV's, a nice boat, a lake cabin, newer loaded up vehicles, big screen TV's, etc.

My daughters have certain chores that they get paid for. I often tell them of our humble beginnings. In terms that I hope are age appropriate I also explain holding stocks and other investments and the importance of having little debt, the monumental waste that is casino's and the lottery, and when we are in the Caribbean, I point out to them that they are very fortunate to live in the circumstances that they do rather than the poverty that they see there. These topics are all re-hashed fairly often.

Hopefully when they get older they either don't care to have the things that we have, or see those things as goals to work hard toward. The potential other side of the coin is that once they get out on their own, they will expect to have all of the "stuff" that we have and that if they never earn a great deal of money, that they will either be disappointed with their lot in life or they may decide to go heavily in debt to get the "good life" again.

[Milton]

Quote:

Originally Posted by Bestwifeever I would be really ticked if my kid came home and said Tommy's mom/dad said whatever about finances, and you could cause a rift between the boys.

Agreed. It is challenging enough to raise a child without neighbours chiming in and seeking to impose their own values / lifestyles.

In any case, the contents of your post strongly suggest that what is really "driving you nuts" about this situation is mere chagrin resulting from the boy's condescension. Relax! As A854321 says, why worry about what he thinks?

[Culture]

Quote:

Originally Posted by Grizz Hopefully when they get older they either don't care to have the things that we have, or see those things as goals to work hard toward. The potential other side of the coin is that once they get out on their own, they will expect to have all of the "stuff" that we have and that if they never earn a great deal of money, that they will either be disappointed with their lot in life or they may decide to go heavily in debt to get the "good life" again.

I constantly remind my son that we are rich, he is not, and if he wants to maintain his current standard of living once he leaves home at 18 to go to college, he needs to consider the career path that he is going to follow.

[Culture]

Quote:

Originally Posted by Bestwifeever I would be really ticked if my kid came home and said Tommy's mom/dad said whatever about finances, and you could cause a rift between the boys.

I agree. This is why I "beat around the bush" rather than out-and-out discuss the situation with him.

[Culture]

Quote:

Originally Posted by Bestwifeever Also how do you know so much about how much his parents earn and how they spend their money yet they know nothing apparently about your income and how you spend it? Maybe that's part of the problem?

I find that in general people who spend to maintain status (which is explicitly part of the problem here as directly stated by the father) are more willing to share financial information. I am told things that I would never share about my finances. Nothing wrong with this, I just choose keep my financial information closer to the vest.

[Culture]

Quote:

Originally Posted by A854321 Why do you care what this snotty kid says? I doubt you are going to educate him financially if his parents have laid a poor foundation. He will likely just want more toys as that is what will be reinforced at home. Just tell him you can't afford the lake house and leave it at that.

Actually, he is not snotty and his family is very generous with my son. We try hard to return the favor within reason. I actually purchased two jet skis so that when we go to the lake, his friend will have one to ride also. Seriously, the kid is like part of my family.

To be clear, I am not saying we live like paupers, we just live below our means.

[Culture]

Quote:

Originally Posted by ats5g Seriously though, have you met a teenage boy who didn't idolize a person with an expensive hot new car? When I was younger [teenage - mid 20's], I thought my parents where just cheap and purposely torturing me with the 10 year old ford hatchback and no cable. In my late 20's, after having kids, I realized that they were just being sensible.

I think this is the biggest factor I am fighting. My son sees directly the benefit of saving, since I am semi-retired, but his friend does not see this as clearly. OTOH, they do see that I make all the baseball games and other school functions, but the other father rarely does. Not from lack of interest, he is actually a good and interested father, but he works long hours.

[youbet]

Quote:

Originally Posted by Culture I find that in general people who spend to maintain status (which is explicitly part of the problem here as directly stated by the father) are more willing to share financial information.

That must vary then...... because I find, by far, LBYM types are more anxious/willing to talk about financial matters.

[Culture]

Quote:

Originally Posted by Milton In any case, the contents of your post strongly suggest that what is really "driving you nuts" about this situation is mere chagrin resulting from the boy's condescension. Relax! As A854321 says, why worry about what he thinks?

True, but not in the way that you probably think. I actually get a real kick out of listening to people tell me about investments, their toys and such, when I am secure in the knowledge that 1) they are clueless, and 2) I could purchase them outright. It is quite humorous. I get a lot of amusement in social situations by playing a completely credulous financially newbie. I am quite good at it. You would be amazed what people will tell you.

Note: I am not stating that I am wealthier and more financially educated than everyone I talk to. I am talking about this situations where I am.

However, I actually would like to see this child succeed in life. He is bright and articulate, and has great potential. He will probable be successful regardless, but not as successful as he could be. I already see his older brothers in college in trouble due to their total lack of financial skills. it bothers me that I see him headed down the same path.

[Culture]

Quote:

Originally Posted by youbet That must vary then...... because I find, by far, LBYM types are more anxious/willing to talk about financial matters.

You know, you are probably correct that LBYM types are just as willing to discuss finical issues, but I think that type of information that the two groups want to talk about are very different.

[brewer12345]

Quote:

Originally Posted by Grizz This topic hits home. My daughters are 9 and 11 yrs. We are a fairly high income family. Although we save a large portion of our money and our house, business, and toys are paid for, we still spend at a level that is a few steps higher than most of their friends families. The kids come with us to the Caribbean every couple of years, we have snowmobiles, ATV's, a nice boat, a lake cabin, newer loaded up vehicles, big screen TV's, etc.

Ooh, this hits home. We live in a fairly blah middle class neighborhood, although some are better off and others are worse off. Mostly, we fit in with our lifestyle/spending. But In the past year or so we have remodeled the kitchen and a bathroom, had the landscaping redone, and recently bought a travel trailer (which sits conspicuously in our driveway). Don't imagine this has escaped the notice of our neighbors or the local kids, and I imagine that as our girls get older we will have lots of explaining to do. Haven't figured that out yet, though.