My Parents versus Me

The following is a staff writer post from MikeS.  He is a married father of 2.  So, with the cat, he ranks number 5 in the house.  He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.

I have come to realize, as I was wrapping up my mother’s estate, that my parents probably were not the best money managers.  I mean, they took care of me, but who will take care of them?  That is not to say they I went without as a kid growing up; at least I don’t think I did.  It’s just that in comparing my finances to theirs, I realize what a precarious position they were in.  The remarkable thing is they managed to raise 3 kids on such a small income.

Income Variation

I do not know truly what my parents’ salaries were growing up, as personal finance was never really discussed.  I learned most of my current personal finance knowledge on my own.  I do have a pretty good guess on their income and it was probably in the $50K range.  When I think about this, I think that I should feel flush with cash because I bring home about twice that with my salary and bonus.  I think, “How did they have a home and raise 3 kids on half of what I am making now?”

Housing Costs

The cost of housing is a big difference.  I’ve learned in closing out the estate that my parents bought their house for about $20K back in 1967.  Assuming they took out a 30 year mortgage, and had an interest rate of 7%, their payment would have been about $135 a month.  Now, granted, that is only the principal and interest, property taxes and insurance would be additional.  Let’s assume that property taxes were about $60 a month.  I got this by taking the most recent property taxes and discounting back 30 years at a 4% rate.  A conservative bet for the homeowners insurance would be about $20 a month.  So, all in their housing costs were about $215 a month.  My housing costs are significantly more.  I pay about $2,100 a month everything included.  That’s a huge difference, but it’s also a choice I have made and am comfortable with.


My parents were not diligent savers.  They had little, if any, liquid savings.  They lived more of a paycheck to paycheck lifestyle.  They didn’t use tools like the ones available at the Genworth site to make long-term plans.  I try to be more deliberate with my savings.  I currently set aside 6% of my salary into my 401k for retirement.  I also set aside money for emergencies in 2 different spots, liquid in Capital One 360 and a Vanguard brokerage account.  I have about 3-months worth of expenses saved between the two, with an overall goal of 6-months.


We only had one car when I was growing up and it was always purchased used.  My dad knew someone who would keep an eye out for a good deal for him.  So, my parents never had a car payment and often only carried liability coverage on their auto insurance.  I have 2 cars in my household, thankfully with only 1 car payment.  I also have full coverage on both cars.

Lifestyle Inflation

There are a lot of things now that most people would say are needs that did not exist 20 or 30 years ago.  Take cable television for instance.  We did not have cable TV for awhile when I was young.  Even when we did get it, it was the basic package.  For my case today, I pay about $155 a month for my TV, phone and internet package.  My parents likely paid only around $25 for theirs.  Cell phones did not exist back then, so there were no monthly charges.  My wife and I both have TracFones, so our cost is minimal at about $20 a month.  How many other people spend $100 or more per month?

Times Change

When I started thinking about it, I thought things should feel easier financially for me.  I mean, I make about twice as much as they did and have 1 less child.  What I came to realize though, is that I am in a much more secure position financially than they were and that lifestyle inflation is hard to avoid over the course of 30 years.   🙂

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15 thoughts on “My Parents versus Me

  1. You can say that again about lifestyle inflation creeping up on all of us with time.
    I know for a fact that my parents have been way more careful about their finances. Am still amazed at how my mum has managed to raise all of us on a modest income and still saved a pretty some. A cursory look at some of her assets puts her in the millionaire range and am sure she’s sitting on some others we probably don’t know about.
    She has certainly been such an inspiration and sure looking forward to following in her thrifty footsteps.
    Simon @ Modest Money recently posted..Scottrade Review – Exclusive Review of Scottrade Investment BrokerageMy Profile

    • It’s been challenging managing the lifestyle inflation as my income has increased. The need to balance out the future income needs versus enjoying some of the benefits now is tricky. Thankfully, I have seen what can happen if you totally ignore the future.

  2. I’m in a better financial situation than my parents due to my high income. I do wonder how my parents managed to raise us, but then I realize they never took vacations and we didn’t have things most kids had. I know I will have to help my mom in retirement.
    SavvyFinancialLatina recently posted..How to Be SuccessfulMy Profile

    • I’m with you SFL. We actually had to help mom with her medical bills before she passed. She actually needed a lot more help than she admitted. Thankfully, I was in a position to be able to help. Sounds like you are too.

  3. I am way better with money than my mother, and this has caused some problems in our relationship. She used to spend like there was no tomorrow. However, I do believe this is why I work so hard with my money, because I want to be as independent as I can be.
    Michelle recently posted..What is the American Dream?My Profile

    • Michelle, I had tried numerous times to help my mother out, either with advice or actual money. I eventually just accepted the fact that she did not see her spending as a problem. It also helped me realize that I needed to secure my finances in the event that I needed to help her out, that it did not have an adverse impact on my finances.

  4. I am really amazed by my grandparents who raised 6 kids by being tobacco farmers. I bet they didn’t make $20K per year, but they grew, raised, or made just about every thing they had. I kind of envy the simplicity of it all, but I also know I’m too soft to really make a living on the land, and I’m sure not twisting any chicken necks and plucking feathers to make dinner! I think some lifestyle inflation is inevitable, but we really should remember that we don’t need every gadget and modern convenience to get by.
    Kim@Eyesonthedollar recently posted..Top Five Ways To Make Sure You Never Retire EarlyMy Profile

    • I’m also ok with some lifestyle inflation. For my wife and I, these things are more of a conscious choice now. We don’t have smart phones or go on many vacations. We choose where we want to spend our money, while also saving for the future.

    • I was probably in that boat 10 years ago, but finally got tired of always being behind financially. After a couple of financial scares, I finally started on a path to a secure financial future. Lifestyle inflation still comes up, but it’s managed better now than it was years ago.

    • I’m with you Lance. I know my parents ended up in some holes, but we never went without food, clothing, or even toys. They didn’t save much of anything for the future, but they made sure that there kids were taken care of and we were a different kind of rich because of it.

  5. I was raised by a poor, single mother who had a big gambling problem. She probably made about 30-35k at her peak. While she is still in working age, she is now on disability. Seeing her problems has made me focus on protecting my individual assets while working on my family’s.

    • Thanks KK. I’ll second the thought on hard work. My parents were loving and caring people and I wouldn’t be in the position I am in today if it wasn’t for them. I only hope that I can raise my children in the same way.

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