Do you teach your kids to be poor?

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8/10/2011 12:14 PM ET | By Liz Weston, MSN Money

Do you teach your kids to be poor?

Sometimes parents pass on to their children poor advice about handling money. Here are some messages that won't be helpful when those offspring strike out on their own.
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Lots of people complain to me that their parents didn't teach them about money. Maybe they're the lucky ones. Sometimes the lessons parents teach about finance are just plain wrong. It can take years for their kids to recover, if they ever do. Kelvin Leeds of Seal Beach, Calif., said his parents had told him that rich people were lucky. "Fortunately," he wrote on my Facebook page, "I learned that it mostly involves hard work." Colleen Sluss Gorman of Champaign, Ill., absorbed an even worse message. "Growing up, my folks were poor," Gorman wrote. "I learned that all rich people are evil, all corporations are rich, people who are 'well off' (earning more than around $50,000) were overpaid and lazy." If you're taught that wealth is the result of luck or misdeeds, what would motivate you to handle money responsibly, grow your income and increase your net worth? Gorman eventually realized the shortcomings of her parents' worldview, but it still affects her. RECENT ARTICLES ON FAMILY & MONEY The high cost of caring for parents How to avoid fights over Mom's stuff The cost of wedding-day cold feet The best time (financially) to divorce Survive a disaster -- in your condo
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"I occasionally feel guilty about the amount of money I and my husband make and the amount we have in savings," she wrote. If you're a parent, you should think twice about passing on these messages. If you received them as a kid, now is the time to shake yourself free from unhelpful lessons, including:

How much should I save for college? Am I saving enough for retirement? Try the 50-30-20 budget Average U.S. savings by age, income More LIZ WESTON Allison Burnell of Reston, Va., grew up in a family of six and wrote that her parents had "never planned ahead for anything (or maybe they couldn't afford to, raising six kids)." "Their attitude was more or less 'God will provide' or that things would take care of themselves," Burnell wrote. "I grew up never learning to plan ahead or save for things as a result." Often, failure to plan can mean ever-deepening debt, as the grasshopper (of the ant-and-grasshopper fable) reaches for a credit card to handle "unexpected" expenses. "My mother is of the belief that it's just money (and) not a big deal," another reader wrote. "She figures there will always be more coming in, and is in more debt than I ever care to encounter." Calculator: Find your credit card payoff date Buying a home? What's your credit score? 3 money lessons you should teach your kids View more MSN videos Go to TODAY DONNA FREEDMAN

'The universe will provide'

Liz Weston

In one sense, it's true: A lot of money will flow into your hands during your lifetime. What counts is what you do with it.

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Do you teach your kids to be poor? - - MSN Money

http://money.msn.com/family-money/do-you-teach-your-kids-to-be-poor-w...

Another reader who has parents with the same attitude despairs that they'll ever change the behavior that causes the need for "another windfall . . . (to) save your financial butt." "What??? Use the financial windfall to save or get ahead??? What's that about?" she wrote.

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'You can't trust anybody'

You have to wonder about someone who thinks no one else is trustworthy. Is he not trustworthy himself? But the reality is that money can get complicated, and you need to build some reliable resources to help you answer questions about taxes, insurance, investing and estate planning, among other topics. If you never learn to distinguish between honorable, upright people and their opposites, you're likely to get burned when you try to get help. If you avoid others' counsel entirely, you could make some costly mistakes. Here's just one example: A reader once wrote to rail about the estate tax and how the after-death levies had cost his family its business. After more correspondence, it turned out his father had hated lawyers. Had he consulted one, the dad could have taken advantage of estate-planning opportunities before he died that could have preserved the company he founded. His family paid the price for his paranoia. MORE FROM BING What is the secret to saving money? How much of my pay should I save? I want to retire at 50. How much do I need? How can I budget to save money? How is a credit union different from a bank? Should an adult have an allowance? MUST-SEE ON MSN

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I hear from a surprising number of 20-somethings that their parents are pressuring them to buy homes -- even now, after millions of foreclosures have made it quite clear that not everyone should be a homeowner. "My dad still to this day urges me to buy a house," wrote one of the recipients of this pressure, who describes herself as a single 20-something living in New Jersey, which has some of the highest property taxes in the nation, on an annual salary of under $50,000. "Meanwhile, what it costs me to rent my apartment (is one-third the cost) to afford a house here." Buying rather than renting makes sense in most cities, according to Trulia, a real-estate website. But that's only if the buyer plans to stay put for several years, and many people in their 20s aren't ready to settle down. Calculator: How much house can you afford? In high-cost areas, buying may never make financial sense compared with renting. Before you give in to the pressure to buy, run some numbers through MSN Money's buy-versus-rent calculator. And read "Are you crazy to buy a home now?" Do dog owners get more exercise?

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'You don't need a college education'

This may have been true in the 1970s, when someone with a college degree made only 25% more than someone with just a high school education. Today, though, that gap has widened to 84%, according to a new study by the Georgetown University's Center on Education and the Workplace. People without college degrees are fast losing ground as manufacturing and other well-paying jobs that don't require degrees disappear or get outsourced overseas. A separate Georgetown study estimated that by 2018, 63% of U.S. jobs will require some kind of postsecondary education or training. Currently, only 40% of high school graduates get a degree after high school. Connect with Liz Weston on Facebook The current horrible employment situation, with college graduates waiting tables or boomeranging back home, has convinced some that investing in a college education isn't worth it. But the unemployment rate for college graduates still is about half that for people with high school degrees. Even those having a rough time getting launched today likely will make far more over their working lifetimes than those who skipped college, as long as they picked the right majors and didn't overdose on debt. For more, read "Should your kid skip college?"

'Avoid debt at all costs'

If this attitude keeps you out of credit card debt, then great. If it keeps you out of college, then not so much. If you want to build wealth, you need to understand the difference between good debt, which can help you get ahead, and bad debt, which erodes your financial security. A moderate amount of student loan or mortgage debt can be an investment in your future. Calculator: Do you have too much debt? Avoiding good debt or paying it off too fast, instead of saving for retirement or other goals, can leave you poorer in the long run. Read "The 5 worst pieces of financial advice" for more information.

'Hoard your money'

Hoarding can take many forms. Readers wrote of parents who refused to give to charity or pay for a child's needed dental work. Other parents were overly frugal, often wasting money because they bought on the cheap rather than investing in quality. One reader called it a "poverty mentality" that was the opposite of a balanced, healthy approach toward money.

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10/23/2011 11:13 AM

Do you teach your kids to be poor? - - MSN Money

http://money.msn.com/family-money/do-you-teach-your-kids-to-be-poor-w...

"Neither one of my parents came from much, so when they got older and both got good jobs with large companies, my father turned into an extreme saver," wrote Lauren Lang of Lakewood, Colo. "Every penny that didn't go towards paying bills went towards his retirement account to the point where we would walk around with holes in our slippers, etc. . . . I believe in saving, but I also believe in living. There has to be a balance, and that's what my father lacked."

'Give until it hurts'

This attitude is at the opposite end of the spectrum from the hoarding mentality but is just as unbalanced. Parents with this attitude give away money even as they deny their families necessities or sink further into debt. Sometimes the recipients are charities, while other times the beneficiaries are family members who can't or won't take care of themselves. A recent poll indicated that 59% of parents were providing financial support to adult children who weren't in college. Of the parents offering support, 26% had taken on additional debt, and 7% had delayed retirement. We parents don't want to see our kids suffer. But our most important job is to make ourselves obsolete, raising financially independent offspring rather than adults still entwined in our financial apron strings. When we sacrifice our retirements or go into debt to support grown kids, we're teaching them exactly the wrong financial lessons. Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy." Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Click here to find Weston's most recent articles and blog posts.

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NEWEST OLDEST BEST WORST CONTROVERSIAL 1 2 3

Metamother

3 hours ago

God WILL provide - He expects people to plan, invest, and use those provisions wisely (ever heard the Parable of the Talents?). Stop discounting wisdom just because it comes from a non-sectarian source. Just because that particular family might not have planned ahead and used God as an excuse doesn't mean that's what God asked of them (and I say "might not" because here was their grown child "remembering" that they didn't plan. She didn't really know. Usually families with lots of kids are experts at planning ahead. That's how the family thrives and enjoys life.) Good article, otherwise. 7 10

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10/23/2011 11:13 AM

Do you teach your kids to be poor? - - MSN Money

http://money.msn.com/family-money/do-you-teach-your-kids-to-be-poor-w...

johnQcitizen

8 hours ago

you had better teach them how to get by as poor people.free trade/job exporting is going to eliminate 40 percent of the middle class in the next 10 years.doesnt matter what education you have if industry that uses it is exported 7 7

malinfluenciaDD i dont even want kids in the first place.... sooo yeaaa

9 hours ago

Someone

9/09/2011 6:39 AM

I agree with most of the article except college and debt. You do need post high school training as the article states. That could be the military, trade school, on the job training or apprenticeship. Unless you know exactly what you want to do and it requires a degree then its usually a waste of time and money. By the way, since when do high school graduates get a "degree." As to debt , the best policy is stay out of it as much as possible. When you owe money you are a servant to your lender. There is no such thing as good or bad debt. 19 2

MediaManipulates

9/05/2011 11:46 PM

I don't think people are teaching their children to be poor or hate the rich. What I do believe is that many people haven't taken the time to learn about money hence, they have little to share with their children. Path of least resistance....just denounce what you cannot achieve. There are many people with wealth (whether they care to admit it or not) that have inherited it, won it, found it, scammed it, extorted it, sued for it, been grossly overpaid for the job they do and so on....(they are usually the most arrogant also) we can't change that. Luckily, there are also many people out there that have straight-up earned it ! These are the people that we all can learn from. They know the ropes from bottom to top and don't feel the need to keep others down just so they may stay on top. What they can teach us is that working hard is good and goes hand-in-hand with education, relationships and finding easier ways to generate income in a legal fashion. The young ones need to be taught not to be More 18 1

MeghanHerr

9/05/2011 9:54 PM

My mother, whenever I asked about money, said, "It isn't any of your business. Go away." in a very mean manner/tone. Suggestion: Don't do that. 19 0

the melting heat From what I see, many parents raise their kids to fail.

8/29/2011 5:25 AM

And, peeps making more than $50K a year are still living with wages from about 30 years ago. We are all in this together. When the Titanic went down, it did not spare the AAA+ cabins. 4 13

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10/23/2011 11:13 AM

Do you teach your kids to be poor? - - MSN Money

http://money.msn.com/family-money/do-you-teach-your-kids-to-be-poor-w...

ayla87

8/26/2011 2:18 PM

I think first of all, you have to realize that you can't take everything you read so literally, as far as perspective goes. There are generation gaps between parents & children and children often misunderstand or do not fully understand the intricacies of their parents' financial decisions. Culture and ideals shift and change, and the economy is either a factor or a result of these changes, thus making our parents' experiences somewhat irrelevant to our own. Life can be too complex to pass harsh judgments upon people for their possibly erroneous worldviews; it is probably far more appropriate to choose to teach and encourage a strong work ethic and frugality, along with as solid of moral foundation as possible to your children. Simply put, income is the basis for provision, food, shelter, or whatever else a person has. Most people will err in some way regardless of their parents' methods or even their own. That's just life. I wish I were the one that had it all figured out! 12 1

jn25

8/19/2011 5:06 PM

This article smacks of the GOP talking points... It is OK to be rich, it is ok to earn huge money, it is OK to amass great wealth... Sure but where is the morality? The reason the poor and middle class dislike the rich is they (the rich) got their money from the poor and middle class. I bet this author never got laid off from a company that then paid the CEO a few hundred milliion for a "job well done!" ... Maybe she doesn't have to decide whether to buy medicine or gas for the car this week, when both companies are making billions and not paying taxes... It is not bad to be rich, it is bad to be greedy at all cost (to others). But I digress, the lesson we need to teach our children is to stop and think before spending every dollar. "Do I really need this? Is it a good lasting value?" If the answer is "no" to both then put the money away... If yes then buy it and enjoy....And never take your money or job for granted... When you least expect, it can disappear... And maybe if you spend less on junk then you can accumulate More 48 64

Desiree from PA

8/17/2011 7:03 AM

I'd love to see this article amended to include something simple, like not spending on frivolous things if you can't afford to pay your basic bills: mortgage, electric etc. I know too many parents who carry a very worrisome amount of bad debt and have had banks threaten foreclosure (multiple times) on their homes, yet they continue to buy several season memberships for their children. Nothing like saying "Sorry our water is turned off, kids, but let's go to XYZ Amusement Park for the day." 76 3

RH19

8/16/2011 11:39 PM

Life doesn't come with instructions, and sometimes even knowing how to make the right choice can be a difficult task for many people who may have had no one to guide or teach them how. Before anyone goes on to blame the parents or the upbringing of a person, first you need to know and understand there full history and how that person was affected by it. There are people who are "taught" how to handle money and end up losing everything, as well as those who hardly ever saw any money and yet have tons of it. The experiences of life affect us all differently, judging and blaming wont get anyone very far when it comes to trying to understand why people handle certain situations the way they do. 35 7

Truethbeknown

8/13/2011 6:39 PM

Financial advice is all around us and not much is said that hasn't been told a thousand times over. Rather, it is the discipline to follow advice that provides the greatest benefit. Unfortunately, most people don't or won't for a variety of reasons. We all feel smarter, better and wiser than the next guy. I have always been an advocate of education, but getting your kid to follow your advice or anything meaningfull is a crap shoot. Sometimes they listen but just as often they will not. Try and stop your kid from getting that liberal arts degree when you tell them its a health care economy. I stopped paying the bills just to make my point to my daughter, that art is fun but not a career choice that will support you in todays economy. Shame to all the career councelors who encourage the never ending flow of dreamers with degrees that don't prepare them for the world economy they must compete in. Its tough to step on somebodies dream but if you don't do it some else who doesn't care will likely do it for you, More 47 13

Someone

8/12/2011 6:05 PM

I am 46 yrs. old and will be married for 25 yrs. this August the 30th. We were married for 5 yrs. before

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10/23/2011 11:13 AM

Do you teach your kids to be poor? - - MSN Money

http://money.msn.com/family-money/do-you-teach-your-kids-to-be-poor-w...

our 1st son was born, and 18 months later our 2nd son and last child was born. My wife and I are both veterans of the U.S.Marine Corps, we served during the 1st gulf War. We have lived very frugal although some would call me cheap. After the military, and while my boys were small I was the bread winner in the family. I went back to work with the same company that I worked with as a teenager, McDonalds Restuarants. I stuck with it and before I ended my McDonalds career I had worked my up to the position of Supervisor. I had 10 restuarants to run with appx. 500 employees that I was resposible for, and like I said we lived frugal, thank the lord for living frugal. We had amassed around 100 thousand in savings. Now my post career was as a Superintendent for a home builder, then our world More 90 7

WANTEDBADMAN

8/12/2011 3:26 PM

My wife and I both quit college and went to work full time. We invested regularly and worked hard. When times were good we invested 25% of our salaries. When times were bad we worked harder and invested 25% of our salaries. We both retired, prior to 55 years old, and have a combined income of over $90,000 a year. With our investments we get a 2.5% raise every year. Our families were not well off, both sets of parents worked outside the home. Our two eldest sons didn't finish college but have jobs with good earnings and security. Our two younger sons work retail and are attending college. College is important, but so is hard work. You make your own destiny. As in sports, luck comes from preparation (knowledge and planning). 57 8

doin80on80

8/12/2011 2:42 PM

Am I teaching my kids to be poor? No, Apple Inc. is doing this job for me. All American kids will have a lower lifestyle than we have due to our arrogance and hiding our heads n the sand when it is so obvious that our govt is killing our country. So sad, I hope they have a tarp to place over their couch in which they sleep on in the streets. 36 66

helen sue

8/12/2011 1:50 PM

after finding myself divorced and alone at age 40, i adopted the philosophy of never getting myself in any financial situation deeper than what could be paid for on minimum wages - anyone can find a minimum wage job of some kind if they look hard enough-[ the key word here is a JOB not a position]better paying jobs eventually came along but i stuck with my plan of living as if i was only earning minimum wages and saved all the rest - this mentality resulted in saving enough to pay off a 30 year mortgage on a fixer upper house in less than 10 yearsnow i am debt free, own my own home and have the flexibility to fix up the house a little at a time and pay cash as i goregardless of how much you earn, live as if you can only pay for what you would earn on minimum wages and save the rest you will come out ahead in the long run- all that is required is discipline and More 89 5

AT

8/12/2011 1:05 PM

""I occasionally feel guilty about the amount of money I and my husband make and the amount we have in savings," she wrote." Too bad she isn't concerned about not knowing 2nd grade grammar. She must have gone to public school. 25 141

l_duttinger

8/12/2011 8:24 AM

There are a couple things I'd like to point out. My question is: When parents teach children good habits, why is there no applaud to the parent? But when negative things are picked up, it's the parents' fault? Most people are unaware of their deep seeded thoughts about money. Not everyone can visualize the future. Some people are lucky to get through each day. Being poor is not the worst thing in the world. Every system has a ladder. Some are on top, some in the middle, some have to occupy the bottom

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10/23/2011 11:13 AM

Do you teach your kids to be poor? - - MSN Money

http://money.msn.com/family-money/do-you-teach-your-kids-to-be-poor-w...

More 44 9

get serious .45

8/11/2011 9:34 PM

Awful article. Stop blaming others for your "poor" disposition. Why must everyone try to find someone else to blame for their own personal weaknesses in our society? 44 27

Matthew77

8/11/2011 5:25 PM

The one thing the author did not mention is owning a business. If you start your own business you have the ability to create wealth and you can take advantage of hundreds of different tax advantages people with only jobs can't. With unemployment so high and jobs getting shipped over seas I am surprised more people are not talking about starting your own business. 47 13

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