Are you doing better than your parents?

The American dream is that we all have the right to the pursuit of happiness.  We dream we can keep growing and that we will do better than our parents and our children better than us, and their children better than them.  It’s about upward mobility and rags to respectability.

A lot of personal finance writers remind new college grads that they shouldn’t spend based on what their parents had when the kids left for college.  Remember, the writers say, your parents worked decades to get that house, those cars, the home entertainment systems and so on.

We couldn’t afford much when we were in graduate school– tiny stipends in a high cost of living city.  But once we finished school, my income alone is twice what my mom makes now.  My sister makes even more, and she’s years younger and only has a BS.  When she got out of school she was making almost 2x what my parents make, these days it’s even more.  My car is about the same as what my parents have.  My partner’s car is nicer (in that it’s a Civic instead of a compact.)

Our house, the first one, is nicer than any my parents ever owned.  Than what my partner’s parents owned.  Heck, when my partner’s parents were at our stage of life, they were all living in a trailer.  When they visited us the first time, they took pictures and showed them to everybody in town as a sign that their kid had made it.   My family lived in apartments and duplexes and houses, depending on cost of living and income at the time.  We moved a lot.

My parents sacrificed so that my sister and I would be advantaged and do better than they did.  There may not have been money for VCRs or microwaves or air conditioning or dishwashers or school trips to DC but there was always money for education– for summer classes for us, books, after school lessons, private high school for my sister, and full college tuition to the schools of our choice.

Partly because of these sacrifices, we grew up wanting to make enough money not to have to worry about it.  To be able to have the air conditioning and the dishwasher and to be able to eat out once a week.  I think we both surpassed our wildest earnings dreams.  Of course, dreams have a tendency to grow once they’ve been surpassed.  I don’t know if our child(ren), who have never known want, will have quite the same drive.  And maybe that’s for the best.  The next generation can look at all careers instead of the more lucrative ones.  Maybe ze’ll be engineers anyway.

So it’s good advice for most folks to remember that your parents had decades to buy the mcmansion, the nice cars, the fancy electronics… but it’s even nicer to be grateful for them not having those things because all the resources were poured into making your generation a recipient of the American dream.  I hope it’s nicer for the generation after that, having both nice things (but not too nice) and educational opportunities.  But we’ll have to wait and see.

#2:  I am renting a nicer house and make more money than my mom, but I have a PhD and she has a BA.  She does good work that should be paid better.  My dad is a PhD retired from a lucrative career and teaching as a vocation in his later years, so he doesn’t make tons of money right now but he has money from the past (and from his current wife).  I think my sister makes more money than me but her job is one I could never do, and she lives somewhere medium-expensive, so that’s ok.

I mostly don’t care at all.  I grew up with upper-middle-class privilege and believe me, I know it and am grateful for it.  But money isn’t a race for me.  Nobody goes into academia for the money, that’s for damn sure.  On the flip side, I’m not here to get screwed over, either.

Are you doing better than your parents?  In what way?  Did you make the mistake of trying to live like your parents when you got out of school?

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48 Responses to “Are you doing better than your parents?”

  1. Comrade PhysioProf Says:

    My father earned a lot of money over the years, but because my mother is a greedy social-climbing show-off, they spent in a highly leveraged fashion all those years, and god only knows if they actually have any decent amount of f*cken savings now. They are also both narcissistic manipulative violent assholes, who have driven one of their children (and all of their grandchildren) out of their lives. I still have contact with them, but as little as possible, and I consider them despicable people whose entire lives are instructive as “for f*cke’s sake, don’t do any of this unless you want to end up grossly overleveraged, bitter, and alone”.

    So, yes, I consider myself to be doing better than my parents.

  2. Debbie M Says:

    Technically speaking, my parents are doing better than me. They always buy new cars, their house is bigger with better appliances, they have a big screen TV and up-to-date electronics, they have insurance like I do, and they are happy. My mom makes more per hour than me (in spite of being very bad at asking for raises) and can afford to work half time now that she’s on Social Security. I have no idea how much money my dad makes–he has his own business, he makes a different amount every month, and I do know he has a tendency toward cash flow problems. (They are still together, but they keep their money separate.)

    However, I greatly prefer my own lifestyle. Yes, I live in a smaller house, but it’s in a much better city. I’m going to be able to retire completely long before age 65. I have everything I need and basically everything I want. They make more money, but I like how I spend mine better.

    I’d say I did not make the mistake of trying to live like my parents when I got out of school. At that point, they were just moving up out of their “early attic” decor period (they were updating their hand-me-down furniture with new stuff). And I’d heard all the stories. I never lived in places as small as they had (“You could use the toilet, wash your hands, and take a shower all at the same time!”), but I did have roommates longer than regular people do.

    I wouldn’t say they sacrificed to make sure our lives were better, but they did do a lot. They set up a good foundation for us (loving us, taking care of us, teaching us). They helped pay for college. They let us move back in whenever we want to (yes, they even have a 46-year-old son living at home right now). And they are extremely supportive. But I don’t feel guilty for them denying themselves. Mostly we all got treated the same–when there was money, we all benefited, and when there wasn’t much, we all were still fine. (Note: obviously they sacrificed a lot–they did have children. We did destroy things. We did keep them awake. All the usual stuff. But they weren’t at all like those immigrant parents who their lives vicariously through us instead of living their own lives.)

  3. Cloud Says:

    I’m definitely doing better than my parents, except for in one aspect: they have pensions. They retired at 55 on full pensions. I have 401ks, and only rarely have I even had any sort of company match. My retirement, if I get one, will be almost entirely self-funded. It certainly won’t start when I’m 55- I’m hoping for 65, but not counting on that. My husband and I both contribute the maximum to our 401ks each year, but that may not be enough to allow us to retire in the way we want, particularly if the stock market doesn’t start helping us out again. I actually have a post brewing on this, but it will be a long and involved one, so it is waiting until I have the time to devote to it.

    I’ve been making more than my parents’ combined peak income for many years. Add in my husband’s income, and we’re doing way better. Interestingly, our house is very similar to theirs- a 1950s box w/about 1300 square feet. But we live in a far more expensive place, so the nominal value of our home is approximately 5x theirs. Oh, and they own theirs outright and we’re still trying to pay off even the second mortgage (but we only bought about 4 years ago). San Diego is beautiful, but expensive!

    We have the money to pretty much do what we want, for which I am very grateful. I do worry a bit about how I’m going to raise my kids not to be entitled little brats who have no idea that most of the world doesn’t have the resources they do… but we’ll cross that bridge when we get there, I guess. Our oldest is just now coming to the age where we talk to her about money and having to choose how we spend it, and where she can start being involved in some of the charity decisions we make.

    • nicoleandmaggie Says:

      Pensions are definitely something our generation is doing without, but presumably our parents paid for them with lower wages while they were working.

      Housing values are about the same where we live as where my parents live, but we could probably retire *now* to DH’s home town if we just had some form of healthcare. Of course, we wouldn’t want to… Seems like the places where it’s fun to be out of the labor force are also the places where it costs too much to be out of the labor force.

      Our DC offered hir saved allowance to help buy groceries this week, since ze also eats the things we buy and thinks ze should contribute. So I explained that it’s ok, hir allowance is only for things ze wants… it’s only when ze is an adult that ze will have to buy hir own food at the grocery store. That was a bizarre conversation.

      • Cloud Says:

        Yes, my higher income definitely compensates for the lack of pension. But it will be interesting to see if I am able to make it work out to give me the same sort of retirement. The retirement calculators have me aiming at a number that seems astronomically high!

        My parents were a librarian and a teacher- so people doing their jobs today also have pensions. I don’t begrudge them that for an instant, but sometimes I think people working in jobs that have pensions underestimate their value. A good pension is a HUGE benefit. Although I guess these days it is hard to count on one even if you have it.

      • nicoleandmaggie Says:

        Good point. What worries me is the generation that is patterning their saving after their parents’ but doesn’t realize just how much that annuity their parents are getting is really worth.

  4. Jacq Says:

    My kids have zero sense of entitlement and I don’t really know how I managed to raise them that way. Some kind of osmosis happening there.
    When my parents got out of university (mom) and the army (dad), they were living in the back of a one room schoolhouse and a granary, respectively. So yes, I did much better than that. :-) Both of them were not spenders at all, so comparatively I’m extravagant. Yay!

  5. leightpf Says:

    I think I’m unique that my parents still make more than me, despite neither of them having degrees and I have a BS in an engineering field. I certainly am in a better position than they were at my age, but I am only in my early twenties. I guess it’s a chain – my parents are doing better than theirs and I’m on track to do better than mine.

  6. Everyday Tips Says:

    We are definitely better off than my parents were. My brothers and I were the first on either my mom’s or dad’s side of the family to get a degree, so that definitely helped. My mom was a stay at home mom and my dad was in sales, and they spent money pretty much as it came in. (If not sooner.) I grew up in a 720 square foot house for 5 people and 3 pets without a basement, so we definitely have a nicer home. Plus my mom didn’t drive, so my parents only had one car.

    My husband’s family is a different story. His dad got an MBA and was an exec for a major company. (They paid for the grad degree, I think that kind of thing happened more frequently years ago than it does now.) His parents were pretty frugal and did well, but I think our income is higher relative to what their income was at our age. However, we sink a lot of money into private school, so maybe they had more savings, not really sure.

    Interesting topic!

  7. Linda Says:

    Yes, my sister and I are both better off than my parents. I worry most about my mother who worked in lower wage jobs all her life and no pension or personal savings to live off in her retirement. Her husband has his own business but he’s not very savvy and does things like get capital through credit card cash advances. Since my mom is now in her early 70s she pretty much just has social security as her source of personal income.

    My dad is better off than my mom. He also has a working spouse who is an adjunct professor at a small university. I guess she gets decent benefits but her pay can’t be that great. Dad had a pension, though, and while he wasn’t the best at managing his money he still had more than my mom (and kept it well-concealed during the divorce, I must say.) He has a house and a lot of land, although it seems he still has a mortgage and he’s in his mid-70s.

    I’m working towards having my house paid off by the time I’m in my mid-60s and have a well-funded 401(k). I also have an emergency fund, which I don’t think my parents had growing up. I’m sure I make more than either of them ever did, too, even adjusting for inflation.

    After I was done with my undergrad I didn’t do anything extravagant. I didn’t grow up with things like a dishwasher so I couldn’t miss them when I was out on my own and making an entry level salary.

  8. bogart Says:

    An interesting question. The short answers are, yes, doing better, and no, did not even come close to trying to live the way my (adult) parents lived when I was fresh out of college / in grad school. I was totally clear that there were plenty of things I couldn’t afford and others I didn’t want to pay for (cable TV, without which I’d still be perfectly content today were it not that the divorce would cost me %-) ). OTOH, even today my mother only has cable tv because when she had some repairs done to her house 10 years (?) ago, the repair crew cut the connection to the antenna and then said, “Oh gee, we’re sorry, we had no idea anyone was still using an antenna to get a TV signal.”). So …

    But beyond that, I think it’s difficult to compare. Times have changed so much. I’m convinced that in all wedding planning there’s a moment when the bride dissolves into tears. For me it was when the hosts of my reception (family) wanted to prevent all smoking … problematic, as the reception was out-of-doors (people couldn’t just slip out to smoke) and DH’s entire family consists of smokers — at least, it did then (many have since, yay, quit). But in discussing my meltdown with my mother and another woman of her generation I learned that for each of them, the meltdown moment consisted of learning that they couldn’t (readily) include all the guests they wanted to because in each case one was — gasp! — African American, and I/they live in what was the then-segregated South. One dealt with this by moving the reception to a private locale and one by inviting the guest in question to slice the cake — ironically, a position of honor for a wedding guest but also something that in the eyes of those who would have forbidden this guest’s attendance otherwise (this being a public location) turned the guest in question from a “guest” into a “servant,” making her presence acceptable.

    All of which is a convoluted way of saying that moving beyond quantifiable SoL stuff, I think it’s hard to compare, even holding geographical region constant. Taking the above, for example, I do think desegregation (clearly a good thing) has had side effects that often get glossed over in discussions of “how much ‘better’ things used to be [for middle-class whites].” At my age, or at least, when I was the age my son is now (glossing over another change, the rising age of motherhood), my mother had access to paid household help made affordable in part because of the existence of a labor market that offered very limited options to African-American women.

    I could here seque, I suppose, into a full-fledge IBTP (and IB Jim Crow) essay, but I’ll cease those musings and just end with two more examples about the difficulty in making comparisons. The threat of the non-availability of healthcare is something that I think does (or should) weigh heavily today on many otherwise comfortably situated Americans in a way that was not true for my parents’ generation (OTOH, for those who can access it, healthcare offers much more today than it did then, though of course what and how much varies significantly by medical condition.). And even ignoring the interest-rate differences (which weigh *heavily* in my favor), I just bought a late-model used car for the 1975 equivalent of $4K that has safety features my parents would not have known to dream of back then.

    • nicoleandmaggie Says:

      Those are all really good points.

      And man, how horrible with the segregation. My parents were fortunate enough to live in a state that was much looser on the segregation laws, though my mother remembers segregated water fountains when she was very small. They knew several interracial couples (and many gay couples!) socially as young adults. I can’t imagine having to pretend that a wedding guest is hired help to make it legal. There’s still a long way to go, but thank God we can no longer legislate racism.

      • hush Says:

        @bogart – Wow, many excellent points. “I think it’s difficult to compare. Times have changed so much.” Exactly.

        My data points: Q#1) Yes – we’re wealthier by a lot; we both have advanced degrees and jobs in fields with shortages where we’re the bosses and where we’d have to either harass multiple employees and/or develop a major addiction to actually be fired (whereas if either of my parents had ever looked at one of their VP’s wrong during their careers they could’ve been fired); we live in a safe place and are in much better physical shape than my folks were in their 30s, and we waited a few years longer to get married and have kids… so overall we seem happier than they did at this age.

        Q#2) No – and it would have been a big mistake to live like my parents at age 22! Aside from living beneath their means as they always do, I’ve never, ever aspired to live like my parents. Working for other people in jobs that were only for the paycheck, having no hobbies, no friends, and a so-so marriage they never get excited about? Hell to the no. We’re just very different people. They have never taken enough calculated risks, and never failed at anything, and if I were in their shoes I’d be regretting the things I never did, the things I never made time to even dream of trying, etc. That sounded harsher than I intended. Their safe, boring, predictable suburban existence, though economically sound, just would not have been fulfilling enough for me.

      • nicoleandmaggie Says:

        My partner’s parents believe that a job is what you do to make money, and you need to have a job. My partner believes he can have a job that he loves but he hasn’t found it yet. This causes some distress… maybe if he had fewer options he’d be happier with the job he has. Maybe not.

  9. bardiac Says:

    I think Linda touched on something important in terms of gender. Men generally make a lot more money than women, so a woman who is married to a man generally is in better financial shape than a single woman or a woman married to another woman.

    I make less money than my father did 30 years ago (just the basic numbers), but because my parents have helped me (and I live in a way cheaper housing area of the country), I live pretty darned well. On the other hand, I make WAY more money than my Mom probably would have trying to support herself.

    I lived a lot like my parents when I got out of school, mostly because my parents tended to live carefully (especially financially) and had helped me through school (so I didn’t have much debt). I rented rather than owned a house, but (as my parents did) I drove an older car that was paid for, brought my lunch to work most days, and so on.

  10. bardiac Says:

    PS. Rereading my note, I realize I should have made the point more directly and noted that my parents’ carefulness with money meant that 1) they could use their middle class income to save for retirement, save for their kids'(and grandkids’) educations, and 2) taught their kids financial habits that have helped us live happily within our means.

    • nicoleandmaggie Says:

      Parents who saved for a purpose are definitely a blessing. If they hadn’t paid for my college education in full I might have taken the wrong lesson and spent like there was no tomorrow, but realizing those sacrifices meant something tangible made it all worth while.

  11. FrauTech Says:

    I’m definitely doing well because of my parents. I feel like they gave me good financial lessons about home owning and saving and investing. Yeah my Dad has a pension that they live off now (making less than half what he made working, but enough to cover cost of living), but they warned me that pensions were going away and that social security might not be there when I retire. I feel like I’m more financially savvy now than they are but it was thanks to their foundation in making sure I save and making sure I started a 401k right away.

    My first job was clerical and I made crap for pay but eventually after going back to school I make more than either of them ever did individually as neither went to college. Now my 401k in my early career stages is worth more than any non-pension savings my parents have and I’m a homeowner (though a little underwater). I still feel like I owe it all to them, their guidance etc. My inlaws on the other hand made more money than my parents ever did but are bad spenders, have made some bad investment decisions, and refinanced their mortgage multiple times already. They are financially doing okay but not the best teachers or examples.

  12. MutantSupermodel Says:

    The short answer is no I’m not doing better than my parents.
    But… it’s sort of an apples to oranges comparison. And… I’m pretty optimistic I’ll be alright in the long run and that’s one of me versus two of them.
    My parents have been together 32 years this month. I was married 5 years.
    Both of my parents have Master’s Degrees. I have a Bachelor’s.
    I make more than my mom, but I’m pretty sure I make less than my Dad. And I’m pretty sure if I include child support, I still make less than they do combined.
    Their house is nicer, but they owe money on it.
    The house I rent now is about the same as the first house they owned but in a MUCH nicer location. As a matter of fact, my parents would say my location is better than their current location. I live in their “dream neighborhood”.
    Cars are the same level.

  13. oilandgarlico Says:

    I feel I’m better off now but better off in retirement/security is a different story. That’s because while my parents made less, they (and their generation) have access to pensions, social security, etc… while our generation faces skyrocketing healthcares & education costs, stagnant wages, and housing is unaffordable for most “regular” middle-class while it was within reach in their lifetimes. I still think I’ll get some social security but how much is the question.

  14. First Gen American Says:

    I’m doing much better, but that’s usually the case with immigrant’s kids. The immigrant sacrifices all so that the kids will have a better life. I worry about my own children and whether they will have the appreciation of what it’s like to be without. The best I can do is try not to spoil them but that’s hard not to do.

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  16. ms Says:

    Wow, I’m definitely in the minority! I’m doing worse financially, and I think realistically that I will always do worse.

    My parents are both lawyers. Together, they were making >$600,000/y (maybe $800,000, I can’t remember) as of a year or two ago. My mom was the big earner; she’s now retired. In contrast, after college, I worked in a developing country and then went to grad school. I’m now a postdoc making $50,000/y. If I’m very lucky and get a tenure-track position, I might make $80,000-$120,000 for a while. If not, I get to ‘retool’ somehow for something or other.

    I’m exceptionally grateful to my parents for my education. I went to a fantastic private school that made college fun and easy and helped me get where I am today (an impoverished scientist!). I’m actually not trying to be snarky.

    • nicoleandmaggie Says:

      Wow, that is a LOT of income!

      Were they able to keep you from feeling a huge shock when you graduated from college and became an impoverished scientist?

      • ms Says:

        We definitely didn’t have the kind of lifestyle one would associate with that much income. (I didn’t even realize how much they were making until a few years ago.) We lived in a really nice area, but I still had to clean my own room, scrub toilets, earn money from babysitting and tutoring, and so on. They fully paid for my college education, though, so that was hugely nice.

        I’ve always been a stubborn idealist, so no, the shock has never been that great. Before grad school, I lived in one of the poorest countries in the world. All this water I can drink from the tap still strikes me as awesome sometimes.

      • ms Says:

        In case anyone’s wondering, I don’t get handouts from them, and they’ve made it clear (and I support their decision) that their won’t be much or any inheritance.

        I do get angry sometimes when I think about what is financially valued in society, though. I wish basic science paid a little better.

  17. ms Says:

    Sorry, last point–I guess I didn’t realize until recently that people did compare their financial situations to their parents’. I can see that it’s somewhat natural, but in a way, one might as well pick a random stranger. It was pretty clear to me early on that I didn’t want to go into law, medicine, or finance, and it was going to cost me. And that was that.

  18. Holly Says:

    All that income…and no inheritance? AT ALL? Do they plan to donate it all to charity? Fund a non-profit? Spend it?
    It sounds like you are doing very well for yourself, though!

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  20. K. Xalli Says:

    Dissenting voice here. No. Absolutely, categorically, NO. Just comparing what they had at my age (30): They owned a nice home, in a nice neighborhood, that they could easily afford on one income, had two children, a fat pension, affordable health care, and bright futures. This was with no college degrees, and no inheritance.

    Contrast to me and my wife. We both work full time, are educated, and experienced. We cannot afford a home, and can barely afford an apartment on both our incomes. Children are right out as it would cost us my wife’s income and immediately put down any chance of us being able to afford any stability or progress in the future. We have no retirement, self funded or otherwise, because we’re just trying to keep our heads above water.

    I know no one my same age, NO ONE who is doing better than their parents, financially or socially, then they were at the same age. Statistically, in this day and age, if you ARE doing better, you’re in the minority. There’s a freaking article about that in every other magazine.

  21. Z Says:

    Definitely not. My brother yes, because he married an MD with a lucrative career, but my father was an academic in a richer state starting in a much stronger economy. I fund my research and barely make it; he supported a family; real estate kept going up 10x in value so the houses got fancier and fancier, the vacations better, etc. That said they are not spendthrifts, their car is 22 years old, etc. But when my father was my age he was a Full and was making twice what I am in real dollars, and was living in a palace, and supporting my mother with nice clothes and restaurants and vacations and so on. I don’t live like a graduate student, but I’m not that far away from it either, comparatively speaking.

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