Ok first let me say Id never ask this of anyone I know in real life ( it feels braggy) and hope it doesn’t come off as obnoxious but I need input and I always get good advice on this board.
Here’s the situation. Sorry it’s long !!!
We’ve always lived below our means. We saved a lot for college and were in good shape. Now we’ve suddenly and unexpectedly inherited a great deal of money ( millions) and money is not a concern. We aren’t changing our lifestyle significantly but husband told the kids who work very hard in college that they certainly have more spending money than usual and should feel free to spend on housing and entertainment.
So Dd is now looking into housing for the year after next ( crazy but that’s how it’s done). Her friends have a lot of money. A lot. (These are not people who are over-extended. They are mega wealthy) They told her they had looked at one of the most expensive option available but wanted to make sure it was ok. She asked us and said it was fine if we said no, but we said it was totally fine. Then I got a call from one of the girls mothers who ( and this is very very kind and nice) said “I’m worried that the girls are pressuring your daughter to live somewhere pricy. I don’t want you to feel like you have to do this, they can pick another place. I’d feel bad if my daughter was making her overextend.” I assured her it was ok with us but I’ve heard from another friend that the mothers of the “rich” girls are genuinely worried about this and may tell their daughters to choose another place because of ours even though they can afford it ( again this is clearly coming from a place of kindness) They have seen our house which would literally fit in their basements and our old mid priced cars and assume we don’t have the money for this.
So do I just ignore this. Or next time I see her do I say directly that we’ve come into a lot of money and she doesn’t need to worry?
Thank her for her concern. No details necessary of your newly “found” cash flow. If it’s really OK with you for your daughter to live there… let that be all that they need to know.
No explanation needed ( and BTW - the other girls will eventually learn of your new situation and share it themselves with their parents… )
Congratulations! If it were me, I would be concerned with safety issues if word gets out that you have a lot of money. If you need to say anything more to the other parents, I would minimize it- say you got a little extra money this year, and you’re able to treat your daughter, or something like that. But in the bigger picture, if you haven’t already, spend some money getting the proper advice from lawyers, financial experts, etc. Maybe install a security system? And warn your daughter about speaking to people about the money as well. Enjoy!
It’s unusual for an unexpected windfall to fall in the lap of a frugal person, because most windfalls are lottery winnings and frugal people normally avoid lotteries because they see them as “a tax on people who are bad at math”.
I’d proceed just as you are, continuing your frugal ways but allowing yourself and your kids a few splurges.
I also agree with the advice above. Te the other parents its fine and they’ll learn the details eventually.
In terms of the housing…all you have to say is “we are able to cover all of these costs. Thank you for thinking of us”.
And let it go.
In the meantime…see a financial planner and figure out the best ways to deal,with your inheritance. Maybe something in trust for,each of your kids, retirement for yourselves.
Set up accounts for things like future weddings.
Share the details with your kids if and when you think it appropriate for your kids.
" If it were me, I would be concerned with safety issues if word gets out that you have a lot of money."
Where we live it’s a " drop in the bucket". It’s the difference between being a one percenter ( us now) and and a .01 per center (lots of people we know including many of Dd friends )
"It’s unusual for an unexpected windfall to fall in the lap of a frugal person, because most windfalls are lottery winnings and frugal people normally avoid lotteries because they see them as “a tax on people who are bad at math”.
Probably true. It was an inheritance from my insanely frugal spinster aunt. She was a property flipper. She lived like a pauper. We knew she wasnt really a pauper but we’re stunned by what she had. We had no idea.
You don’t have to mention the big windfall, but could say “Her grandmother left her some money for college, and this is how she wants to use it.”
I have a friend whose parents pay for the grandchildren’s college. The parents are very much lower middle class, but the grandparents one-percenters. The college decisions are a lot different than the day to day decisions.
Yes, the woman who cuts my hair (and juggles a lot of jobs) had relatives leave their kids money for college. This enabled both kids to go to private OOS Us which would not have happened on the funds that the family normally stretches to live on.
I’d call her back to clarify, and say, “I just wanted to call back to clarify. We’ve had a recent windfall that makes it find for little Maya54 to join her friends in the more expensive housing option. So we definitely would not want the group to make a different choice on her account.” (Although I might have a chat with my kid… what about an opportunity for the group of girls to pick a less expensive option, and ask all their parents to contribute to some cause they care about?)
I hope your daughter has already normalized conservative and frugal spending habits, so that the influence of being able to spend a lot of money on a year’s college housing, and living with scions of mega-wealth and possibly being influenced by their spending habits, will not lead to a lifetime of overspending and inability to make ends meet on even relatively high income levels (much less more typical new college graduate income levels).
They have not read The Millionaire Next Door?
Unexpected inheritance from an older “millionaire next door” relative who previously showed no outward signs of wealth (as noted in #7) is one scenario. Another potential windfall scenario involves stock-based compensation in an IPO or acquisition of a previously privately-held company.
Also, are large lottery winnings really that common? Seems that lottery winnings over $1 million occur in the low hundreds of times per year at most in the US. In contrast, estates subject to estate tax (over $5.45 million, though they may have multiple heirs sharing them) occur around 4,700 times per year in the US, so probably 10 to 50 times more often than large lottery winnings. IPOs occur in the low hundreds per year, but may provide windfalls to many people in each one.
But the frugal people who get such windfalls are unlikely to advertise that they got them (either by directly telling anyone or increasing purchases of status symbols like more expensive cars, houses, etc.), as it may disrupt how they live (which they like just fine) by attracting unwanted attention.
Indeed, within the same general income (or windfall) range, I would guess that those who spend more on status symbols will be the ones who end up poorer later, even if the status symbols make them appear more wealthy for the time being.
“They have seen our house which would literally fit in their basements and our old mid priced cars and assume we don’t have the money for this.”
One of the richest people that I know lives in a very modest home that he purchased before his first stock options were worth anything, but stays there because he and his wife like both the home and the neighborhood.
I would be inclined to answer any well meaning phone calls with just a thank you and “this is not a problem for us” and then don’t elaborate and don’t worry about it.
Absolutely do NOT feel compelled to make up any stories. If this comes up again, simply thank the person for her kind concern but assure her she has made some inaccurate assumption and you are fine with the girls’ choice.
I agree that there is no reason to elaborate. I know quite a few folks who live in very modest homes but have a ton of money. They like where they live and have no debt but enjoy the neighbors and their home. There is no reason to tell people about your finances, windfall or much of anything else. If the girls want to choose a less expensive place to live, it’s on them, as you’ve already indicated your D will be fine with sticking with the expensive place.
It is strange for a parent of an adult child to call another child’s parent to ask if they could afford something. It is pretty presumptuous. I would have told the other parent that my kid is very good at managing her budget and knows what she could afford.
I gave both of my kids a housing budget of what I would have had to pay for a single room on campus. D1 was much better than D2 at getting most out of her budget, so she was able to live at one of the more expensive apartments in town. D1 did it by subletting from very wealthy students who were going to be studying abroad. Some of those kids just pocketed rent money from D1, their parents didn’t even know their kids could sublet those apartments when they were off campus.
I think it is thoughtful and poor to assume any ill intent by the parent who chose to call. It is always good to be mindful that people vary as to what they can afford and not have friendships damaged due to differences in wealth.
It’s possible that part of the reason for the calls was that the parents aren’t happy about their daughters’ choice and wish they’d spend less. Its only been recently in my life that I’ve realized that frugality can easily be used to mask controlling behaviour syndrome.
I’d also note that a million ain’t what it used to be. From a standpoint of sustainable spending without whittling into the “principle”, you could invest it in an index fund and get around 2% annually in dividends pretax. That’s only 20k per year. So its nice to have, but its not as life-changing as it seems when you look at the total amount rather than the sustainable annual income that it can provide.
In any case, its a nice dilemma to deal with. Good for you.
I agree it’s pretty considerate of the other parents to check with you. No story or explanation is needed other than saying something like, “Oh it’s not a problem at all.” Personally I would word it in a way that expresses gratitude for them checking, but also makes light of the issue. That would put them at ease moreso than somewhat more equivocal wording like, “We can manage it but thanks for checking.”