Not Keeping Up With Our Parents

geezermom · March 7, 2009, 8:23am

My husband is doing better than his hard-working blue-collar parents who were very proud of his accomplishments (first high school graduate in his family, then got a PhD). I am doing better than my parents out of fear that I would end up in my mother’s situation. They were upper middle class and lived well beyond their means. My father didn’t think he needed retirement savings because his children would take care of him. He died 25 years ago (young), leaving my mother (who is still living) with debts and little income.

Some of my friends are not doing as well financially as their parents, but they are comfortable. They also have better marriages, more fulfilling careers, and better-adjusted children. I hope that the better life we’re giving our son includes emotional health, a positive attitude, common sense, and the capacity to make wise financial decisions for the present and the future. I’m a better saver than my parents, and I would like him to be a better saver than me. (Though under the mattress appears to be the place to save it at the moment.)

NewHope33 · March 7, 2009, 10:02am

Ah, memories …

NewHope33 · March 7, 2009, 10:14am

It’s hard for me to answer whether we’re better off or worse. “Different, but certainly OK” probably describes our situation best. Parents were very well respected in their communities. But the Depression and the War left deep scars. I’m pleased that my children haven’t had to endure those sorts of traumas.

originaloog · March 7, 2009, 10:39am

The decline of the middle class is a real phenomena and the gap between them and the wealthy in terms of both asset wealth and income have skyrocketed in recent decades. This fact made the tax cut legislation early this decade nonsensical since it was so overweighted in favor of upper income families.

Re college debt, I agree that large student borrowing for college is a bad idea unless other alternatives are not available. And by large I mean debt exceeding $16-20k dollars for an undergrad degree. Those majoring in higher paying professions like engineering may be justified in somewhat larger student debt while those majoring in lower paying fields like some liberal arts majors would be wise to incur less debt.

Some middle class families could do more to save for their childrens education. It is just way too late to look at college costs their jr hs year and wonder how they will be able to afford the semester bill. Saving needs to start the moment they are born. A family may not be able to put away enough to pay for private college cost but a goodly number can make spending adjustments to $100/child which would go a long way toward paying for an instate public university.

Are we in better shape than our parents were at this stage in life(we are recently retired)? We definitely were in December, 2007. Now? Maybe slightly.

Mombot · March 7, 2009, 11:21am

I would have to say our situation is mixed. On one hand, I know we make a lot more income than our parents ever did. I have always worked and made a high salary, and our moms were both housewives.

DH’s dad attended college on the GI Bill but dropped out after two or three years when DH was born–he was a technician at a big manufacturing company. He had one layoff in the early '70’s recession and was out of work for two years–but he was called back to basically the same job he had before, at the same wage, and that kind of security is non-existent today. He retired with a pension, health benefits and a big 401(k) balance and he and his wife live very frugally but are very secure financially–the house they bought in 1965 is long since paid for, and they never travel or spend money. Their cars are both at least 20 years old. They have never spent a dime on anything to improve their house–it still has the original kitchens and bathrooms. If they can’t fix it themselves, it doesn’t get fixed. And now that they are both 80, the number of things that can’t get fixed is growing rapidly.

My father had a college education and we lived securely but frugally–three bedroom/one bath '50s tract house, one economy car was it for the family. My parents set aside money for our college, but it was a given we would go to state schools–the idea of a private college was completely foreign to them. Why would you do that when you could get the same thing so inexpensively?

We have far higher aspirations than our parents–our kids attended private K-8, and two of the three attend private colleges. Money is tight as we are on the dead zone for financial aid–our EFC was calculated at $90K—LOL!

All that being said we do not enjoy anywhere near the level of security our parents enjoyed. I think it is a big tradeoff-we have more income, and we call the shots as to what our money goes toward–they had maybe lower salaries but lower expenses and more compensation in the way of retirement benefits.

Would I want to live like my in-laws do? Um, no-what good is money if you live a miserable penny pinching life? But in comparison to a lot of others in our socioeconomic group, we probably look frugal–we spend a ton on education, but our house is old and a bit shabby–instead of the gutting/architecturally stunning kitchen remodel, we just put in a new floor and new cabinets and countertops a few years ago. So we aren’t living miserably or anything–we are just trying to keep our heads above water and save for retirement, educate our kids, and keep our house from falling down around our ears.

colmomto2 · March 7, 2009, 11:32am

This sounds exactly like my folks’ way of thinking.

Somehow I feel compelled to try to help my children attend the college of their choice whether IS or OOS, whether public or private. How did this expectation come to be? We have moved beyond the ideal of just attending college (a big deal when I was younger) to attending the college which offers the best education in the kids’ area of study.

vicariousparent · March 7, 2009, 12:40pm

In my family we are doing much better financially than our parents. I just hope that our D can do at least as well financially as we are doing, but that she doesn’t have to struggle as much as we did.

anxiousmom · March 7, 2009, 1:30pm

It is a mixed bag, isn’t it? I grew up in a big, drafty house w/ lots of artistic opportunities (music and dance lessons, etc) - but there was one car, no a/c, all vacations were work for my dad (but heaven for us, as he worked at Arts Camps). I remember my mom having to “borrow” the car from my dad, and her being given the “housekeeping money” which she had to stretch to feed a family of 6. Watery stews with lentils added, white bread, housebrand yogurt, cheap apples, hot dogs and pizza for a treat. We ate out at HoJo’s (howard johnsons) or Arby’s, about once a month, and it was a big deal. Mom sewed our clothes, cut our hair, and began working after youngest sister was in 2nd-grade. Her salary helped send us to college, and we graduated with little or no debt.
Now, we have more cars, A/C, several computers, big screen tv, and I am much more likely to buy “ready-to-eat” food - so we spend more than they did. IF we are both still employed (knock on wood) in two years, though, we will be doing as well as them, because we will be DONE paying for college and can move into the “save more for retirement” era.

somemom · March 7, 2009, 1:43pm

My Dad attended university on the GI bill having at least two kids along the way and ending up with a masters; he moved west and got into the computer biz on the ground floor and always had a decent job in the defense industry, with a horrible long commute.

I was born later in their life when things were established and we always had full medical & dental & good salary. They bought in SoCal in the 1950s and lived there until they followed me to a new town 40 years later, paying cash for a new house. Mum always stayed home and they have a defined benefit retirement plan including health coverage. They had a comfortable, but not extravagant life.

DH’s parents had many advantages, dad was retired military and started his own very successful business. A very good income, military health benefits, lots of travel, etc…and now that military retirement pay in addition to SS. They bought a home in SoCal in the 1960s, so also beat the high market, it’s paid for and they have prop 13 limited taxes.

Dad groomed DH to take it over, but before that could happen dad lost the business.

We have definitely come to the conclusion we will never match them in income as compared to the cost of living, I am not sure we would match them just on income we make now vs what they made in the 70s/80s.

But we are comfortable, though the health care thing is a constant stress, dental kills me, no retirement plan except IRA/SEP which were begun in the 1980s and I would be surprised if the SEP even has a value equal to it’s basis, all these stock market ups & downs seem to results in more down than up.

Our biggest investment has turned out to be our home, we have never exceeded the mortgage we had when we left SoCal, but have endeavored to buy homes that will appreciate and to maintain and grow that equity.

In terms of every day life experience it is tough to compare, things exist now which did not exist back then, is that us improving or just progress. We have traveled with our kids more than my parents (but my Dad hates travel) and less than DHs, we would have no mortgage but we have paid for tuition for the last 10 years and the mortgage will be our next goal (I don’t know how that works with weddings, home down payments, etc)

My parents did not pay for any of their kids schooling and DHs parents paid his UC tuition & some portion of the room, but not everything. He had to come home every break and even some weekends (uni was 1-2 hours away) to work in the family business. (To pay his dues and continue to learn the ropes, not because they needed him, they had 400 employees) We will have paid a great deal for educational expenses.

Health care, there is just no comparison.

Lifestyle, my mom did not work I did, but mainly for DHs business so I had the flexibility to be where I needed to be for the kids, just not the luxury to relax and enjoy it all ;).

There was no AC in our SoCal home and my mum was very heat sick with rooms darkened all summer, closing the drapes, etc. Now I wonder why no AC? But then it was a luxury.

No such thing as cable TV, no internet bill, not even a microwave until junior high.

ucsd_ucla_dad · March 7, 2009, 1:46pm

Is it really that or is it that we want to give our kids everything? And in some cases, the kids actually expect everything. I think most of us have some compulsion to provide our kids with most things they ‘want’ or in many cases, what ‘we’ want (many times it’s not the kid who wants the expensive college - it’s really the parents). It’s a compulsion but is it warranted and does it really make sense?

Let’s face it, it’s not really so challenging to find a college that can provide an excellent UG education in most majors. I don’t think it’s really that challenging. Even very low tiered schools have professors who have PHD degrees in their fields who can teach the UGs just fine. Is it really about the education or is it about the perceived prestige? And is that perceived prestige worth it? People should really consider these questions before just assuming that a $50K/yr private can inherently do a better job of educating the kid than a <$20K public.

shawbridge · March 7, 2009, 1:55pm

That is one heck of story, TheAnalyst.

I believe I am better off than my parents, but it is a comparison of apples to oranges in some ways. Three of my 4 grandparents were immigrants and the fourth was born shortly after her parents emigrated. All were Jewish immigrants living in NY. My paternal grandfather, who had the temperment and probably IQ to be a Talmudic Scholar, became a high school shop teacher. Their three kids became a Spanish professor (my mother), a lawyer (Harvard Law grad) and geologist. My father’s father was a somewhat unsuccessful businessman in the “haberdashery” business. His two kids became a theoretical physicist (my father) and a math professor and then lawyer (my aunt). Both sets of grandparents scrimped and saved to send their kids to college and grad school. The girls were expected to learn and perform as well. My father was deeply affected by the Depression and always made highly risk-averse economic decisions (including turning down a post-doc at the Institute for Advanced Study for a professorship at second or third-tier university because it gave him a guarantee of tenure two years after getting his PhD).

So, we grew up relatively frugally. We lived in Oxford during a sabbatical and traveled to Europe during that year, but no other fancy vacations. We went to public schools, except for my youngest sister (born much later when my parents felt much more affluent), who attended religious schools. Midway through my childhood, they built a big house in the next town over, a much more affluent town whose realtors wouldn’t show houses to Jews ten years earlier. They put four kids through college, one through law school, (two PhDs were full-ride), and then supported both sisters early in their careers if they were having trouble making ends meet or wanted to live in a nicer/safer area than their salaries allowed them. They’ve continually supported my brother, a sweet man who somehow cannot figure out many of life’s simple mysteries, including living within a budget. For my parents, providing their kids the best education possible was a moral commitment, not just an investment. None of the kids went to state schools nor were we expected to.

I’ve been fortunate to earn higher amounts than my parents for most of my career and have saved quite a bit more (though the last year has not been kind to many investments). My house is in a comparably nice town to the one they moved to and while the house is a little smaller, it is probably nicer. I travel a lot for my work and my family has been beneficiaries – they’ve been all over Europe, Central/Eastern Europe, Mexico (maybe 8 trips), Russia, Japan, China, Australia (twice), Bali, Central America, Canada (many, many times as they are dual citizens and I’ve been on the board of several Canadian companies). I’ve paid for private middle school for both kids, private high school for my sophomore, and do not expect to be eligible for financial aid. I’ll try to pay, as my father did, for college out of current income, though I’ve saved for it. But, I don’t know if I could handle four kids that way.

So, I think we’re better off. We certainly feel more secure than my father did given his Depression background, though I co-own a small business while my father had greater income security as a professor. But, I was always confident that if I had a problem when I was younger, I could count on my father to help. I want to make sure my kids have the same confidence.

Finally, maximizing income wasn’t my parent’s primary value and it isn’t mine. I don’t believe my mother was ever prouder of me than when my first teaching job was at Harvard. I don’t think she was ever more disappointed than when I chose to leave Harvard and enter the business world. But even then, I have chosen to do work that I think is the most interesting and while I can’t complain about my income, I could have made more had I pursued other paths.

colmomto2 · March 7, 2009, 4:07pm

I know that is true for many families, but my kids definitely know the word, “No.” I’ve been a single parent for many, many years and have been “on a budget” most of my adult life. (I think much of this is due to my desire to earn an MFA and Ph.D. - always in school or working to go to school.)

We have no cable (or satellite), we have dial-up (although I am “borrowing” wireless at the moment), and the kids have basic cell phones which they got two years ago because of a problem that occured with a late school bus and no one knowing where the bus with our kids on it was located. I am very lucky b/c my children ask for very little and learned early on that “we are on a budget.”

That is probably true for many majors, but for some reason our flagship U doesn’t have a strong ug aerospace program according to the Associate Dean of the College of Engineering at state U. My S is ubersmart (NMF), very focused, and I want to help him in any way i can get the education he is looking for. That being said, his brains are going to have to help him win scholarships/grants for the school of his choice. No free ride (or mostly free) then state school it is. I am disappointed in myself for focusing on my own educational goals and not enough on saving for the kids’ educations.

vet2be_mom · March 7, 2009, 4:36pm

We will be providing for our daughter, education-wise, far more than either of our parents provided for us.

My current husband was completely on his own after high school. My dad was willing and able to pay for my tuition and books at the local state college, but I rebelled for a time and dropped out. He covered a couple of semesters when I wised up and went back (I was still working full time to pay my living expenses) until I got married at 21, and then he said he was sure my ex-husband and I could afford it. Which, we did. I still worked full-time, went to school part-time at night, and graduated at 25. Not too bad considering the way I screwed up due to foolish rebellion.

But my daughter?

We’ve already got six figures invested in her education, with private school from kindergarten forward.

In better economic times, my husband promised our daughter 100K for college. He still wants to try to stick to that. But as she wants an advanced degree and it’ll take her more than 4 years, SHE will have to stretch that 100K, if indeed we are able to follow through.

But she’ll get the full-time, dorm-living, regular college life neither of us ever had.

Erin_s_Dad · March 7, 2009, 5:27pm

We are much better off than my parents - my father was a tow truck driver who died while I was young and my mom raised five children on welfare. To go to college I had to attend an academy (which I was fortunate to be selected for). I make a very good salary as a consultant after retiring from the military. DD1 and DD2 take after DW as good, smart students so they attend/will attend private colleges with some merit aid. I feel blessed.

ucsd_ucla_dad · March 7, 2009, 6:08pm

It does seem that aerospace engineering is a bit more specialized such that not as many colleges have majors in it.

I hope he finds a school with a good program that ends up to be affordable.

colmomto2 · March 7, 2009, 6:16pm

Thanks.

He carefully researched aerospace programs specializing in his area of interest (propulsion) and applied to those. He’s been admitted to five and is waiting to hear from the last two. Scholarship/grant/FA for each school should be in at the end of this month. For his sake, I, too, hope he gets the funds he needs to go to a school that will give him the education he seeks. He’s worked really hard to make good grades and excel at his academics. Just want it to all pay off for him!

archermom · March 7, 2009, 9:34pm

Colmomto2, our children also heard “no” and “we’re on a budget” alot too. Even with only 1 of 3 still at home, we still do not have cable! ;)

But, we are much better off than my parents. Both were immigrants and made the astute decision to move their family of 4 children out of the city and to a small southern desert town in CA. My father joined my grandfather working in a small Chinese American cafe…and, eventually, bought out the partners. With only a junior high education, he managed to put all four of us through public state university! My mother was always at home for the children since there was a 19 yr age difference between me and my youngest sibling. She definitely had the “smarts,” and would’ve accomplished much had she attended college. Luckily, my father is a veteran of WWII and his VA health benefits are worth its weight in gold.

OTOH, H’s grandparents were successful business entrepreneurs and sent both of their sons (also immigrants) to college…and both have master degrees. My FIL retired early and most of the family investments are managed by his brother…H’s uncle. Needless to say, over time it has paid off handsomely. But, H’s parents live very simply. Their house and car are paid up. Now that they are nearing 80, they no longer travel far…mostly cruises and local sights. Oh, and of the 3 children, only H completed his degree…and, after we were married, he worked during the day and attended classes at night to earn his MS.

H & I took a different path with our daughters. We are products of the public schools…they have received private educations. It was a choice that we made and re-evaluated at the end of each school yr. Where did the time go to? How did we do it? Doing without, budgeting, luck, and some financial aid. Any regrets? Definitely not. H & I are forward looking people. Over 23 yrs ago, when I was pregnant with #1, H’s uncle told us to concentrate on saving for retirement first instead of saving for the baby’s education. With our retirement intact, and when the time came, we would be better prepared to send her to college. And, he was absolutely right! H & I have pensions and coverage for the health benefits. We consider ourselves very fortunate.

starbright · March 7, 2009, 11:34pm

I doubt this forum is very representative of Americans in general: we have more education on average, probably higher SES growing up and definitely higher SES than the general population.

I’d love to read this book because it doesn’t seem to match my expectations based on observation at all: I look all around and see ‘stupid’ wealth: fancy multiple cars, flatscreen TVs, toys and more toys, and way bigger houses even on limited incomes…all so much more than existed back when we were growing up, when one TV, one car, one vacation, home cooking, and 1500 sqft was good enough for most.

But to answer your question, both H and I are astronomically better off than our parents. We oddly share a similar history yet i think we are both unusual.

Both grew up with very little. Working class parents with only HS education, small homes, not-so-hot neighborhoods, so-so public schools.

Our parents were probably in maybe the 15th-20th percentile in income. We are in the 99th. We managed to ‘move’ up by fluke: both happened to be gifted kids (for no known reason), and personalities that worked well for “excelling in school”. There was always at least one teacher looking out for us, and we got scholarships and such to cover college and eventually got MBAs and then PhDs. Our siblings didn’t have the same luck though they are at least as well off as their families of origin.

Naturally · March 7, 2009, 11:59pm

My maternal grandparents had seven kids and all of them went to college . . . I should ask my mom how they swung that, because they were definitely not a wealthy family. My grandfather was a postal carrier and my grandma was a teacher . . . not exactly the most lucrative jobs in the world. Maybe things were just less expensive then. I know they didn’t spend a lot on frivolities . . . The kids got their teeth cleaned by dental students at the local university (cheaper than real dentists), they packed their clothes in paper bags when they went on day trips to the lake, and my grandfather got a good deal on a used hearse for family transportation–this being in the days before vans and minivans!

On the paternal side, I am positive my life is better than it was “back then.” My dad had . . . I forget, about nine siblings I think. Some died at various ages. Anyway . . . they lived on a farm, which meant constant work for everyone, including the kids. Work work work. And its not like my grandma got off easy just because she wasn’t in the fields with the men . . . She had to cook for all these hungry farmers and farmhands, wash the clothes on one of those old-fashioned washboards, and melt snow to get the water to do the washing. They also had no indoor plumbing, if I recall correctly. My dad was born during the Depression, so they also had barely any money. My dad never went to college, although I think some of his brothers did. I would guess that they paid their own ways without family help. When my grandfather died, my grandma sold the farm and moved to an apartment in town. My dad was a teenager at the time and got a job on the railroad, then ended up going on to have a job on the railroad.

Not Keeping Up With Our Parents

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