The Funnel of Financial Privilege

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Privilege is a loaded word, and a concept that is still complicated and misunderstood by many. I won’t do it great justice here, but it’s something worth discussing when it comes to personal finance.

I recently stumbled upon an article titled, Millennials Who Are Financially Thriving Have One Thing In Common, and was introduced to the most excellent term:

Funnel of privilege.

I can’t wait to use alongside my other favorites like, “post-secondary education industrial complex”. There are just some things that are so fun to say.

What is the Funnel of Financial Privilege?

The Funnel of Privilege is exactly what it sounds like:

the likelihood of a millennial who enjoys one privilege, like paid-for post-secondary education, to enjoy a series of subsequent financial privileges such as funds to buy a house, get married, or a start business.

I know Millennials whose parents paid for their educations, then their weddings, and finally gifted them large down-payments for their first house. Others received cash gifts to make up for their losses in their stock portfolios.

Other friends of mine received blank cheques to renovate their homes or pay off their student loans from studying abroad. Some live rent-free in condos that their parents purchased as investment properties. Others still have things like their cellphone bills or car insurance paid for years after they leave the nest. Virtually all of them enjoy annual vacations to tropical destinations on their parent’s dime.

The reality is that a financially privileged person rarely enjoys just one financial privilege. Usually, they enjoy a multitude. The benefits of all of these privileges compound into an advantage that leaves less privileged peers no way of catching up.

The generational transfer of funds

I’d be lying if I said I don’t sigh with envy when another friend gets ahead courtesy of the Bank of Mom & Dad.

Measuring my adult financial accomplishments against those of my peers who have had their pockets lined by wealthy Boomer parents has been an exercise in frustration. Trying to keep up is like running a race with weights around your ankles. Maybe you can win, but it’s going to hurt like hell to cross that finish line a few seconds faster.

“Double-Lucky” Millennials

Some Millennials received financial help from their parents for both school and buying their first home. This group is dubbed “double lucky“. They make up more than half of all Millennial homeowners, despite accounting for only 3% of the Millennial population.

Almost two-thirds of millennials who pursue post-secondary receive some help from their parents. I belong to the last third that didn’t and paid out of pocket for my university education. I refuse to add up the grand total of my degrees, because I know it’s near or over $100,000.

When I imagine adding that six-figure balance to my net worth, my stomach knots just thinking about the difference it would make to my financial security. It’s true that the investment into my education “worked out and made me into a six-figure earner by age 30. But many of my peers got to the same endpoint without the burden of student loans.

The average student loan payment is $280. Assuming an average income tax rate of 25%, graduating without having to make this monthly payment is the same as earning $4,480 more per year. 

I am still not a homeowner (and not in a hurry to become one either). But I’m not surprised that the majority who’ve hit this milestone did so student loan debt-free and with a cash cushion from their parents. Graduating without an IOU to the government or bank is the same as getting a sick raise.

The article didn’t touch on the third major expense frequently funded by parents: a wedding.

For almost 1 out of 5 weddings, parents foot the entire bill. The bride and groom take care of it themselves 30% of the time. The remaining weddings are paid for with a mix of parental and couple funds.

If you are triple-lucky enough to receive a financial boost to support you through school, buy you a house, and pay for your wedding, it’s no wonder you’re financially thriving. You hardly had to do anything yourself.

The more your parents give you to wed your sweetheart, the longer your thank-you card should be.

There’s even more privilege in entrepreneurship

We tend to think of the entrepreneurs as the ultimate boot-strappers. It turns out they often come from highly privileged backgrounds with resources to facilitate their boot-strapping.

The most common shared trait among entrepreneurs is access to financial capital—family money, an inheritance, or a pedigree and connections that allow for access to financial stability. While it seems that entrepreneurs tend to have an admirable penchant for risk, it’s usually that access to money which allows them to take risks.Quartz

So if you feel frustrated about paying back your student loans, think it might be impossible to save for a down-payment on a home, have no idea how you’re going to afford a wedding, and would like to start a company but can’t afford to leap without a safety net… well, you’re not alone.

Most Millennials are not recipients of the funnel of financial privilege. But the ones that are, are absolutely killing it.

The funnel of privilege separates Millennials into two camps: those that have rich parents, and those that do not.

But is more money always better?

I’ve mentioned growing up on the lower-end of middle class before. I sometimes wonder how different my life would be now had my upbringing and early adulthood been more privileged. I feel this especially when I’m around my friends who enjoy the free education, free wedding, free downpayment triple threat from mom & dad.

My childhood and early twenties are, for the most part, marked by scarcity. I grew up almost exclusively in hand-me-downs and didn’t join any school sports or extra-curricular until high school because the expense was too high. I started working part-time at 14 because it was the easiest way to afford the luxuries of a cellphone and new clothes.

In my early university years, I rented a series of shitty apartments for a few hundred dollars per month, which I can only describe as having poor insulation, mice, no hot water, and entirely too many roommates.  Many years before age 25 were hard. Sometimes very hard. 

But hard was good, it made me want to get out.

The irony if it now seems to be that, having grown up without significant financial privilege myself, I will likely pass plenty on to my children.

Their car seats will be buckled into the backs of luxury cars, they will never be told they cannot participate in a sport or extra-curricular activity, and their university educations will be paid for. I hope to god they won’t be spoiled, and that’s something I can certainly control, but the privilege is a more difficult beast.

How will I teach my children all the hard-won benefits of struggling financially when they may never have to face it firsthand?

I’m happy to live in a higher socioeconomic class than the one I was born into. But part of me still respects the grit it took to get here. I worry that will be something I can’t teach.

When it comes to observing the Funnel of Privilege, there are a number things to keep in mind:

There is always someone that has more than you, and someone that has less. Understanding that your peers might have had significant help achieving major financial milestones should let you cut yourself some slack for not keeping pace.

What you can remember is, wherever you are in your wealth-building journey, you are likely well ahead of many other people, too. It’s important to remember to practice gratitude for what you do have, rather than focusing on what you do not. Don’t think you have much? Try practicing poverty for one week and see if it changes your perspective.

Help others whenever you can. One of the most important things you can do once you acknowledge the privilege you have is to give to people less fortunate than you. This is one of the main reasons I emphasize using your money to help others through charity and giving. Regardless of how little you have, you probably have more than enough to give a little away.

Focus on what you can control, not what you can’t. You cannot change the past, but you have full control over the future. Being at a disadvantage early in life might make it harder to achieve some things. But it doesn’t necessarily make them impossible.

Having to pay for your own post-secondary education doesn’t mean you can’t pursue a degree. Just like having no help with your a down-payment doesn’t mean you can never be a homeowner. Do what needs to be done to get the results you want, and don’t worry about whether it’s harder or easier for you than someone else.

Be proud of what you’ve accomplished so far. One of the best parts of hitting your financial goals with your own sweat and sacrifice is the fact that the reward is entirely your own. It’s easy to transfer a $5,000 cash gift rom you parents to your retirement savings, it’s hard to set aside $450 each month for an entire year to accomplish the same. Remember to pat yourself on the back for the discipline and dedication it takes to accomplish a big goal. It’s definitely worth something.

Know that even the most well-to-do parents cannot buy their children some of the most important things in life, like a loving marriage, career satisfaction, or a close-knit group of friends. I know it’s cliche to say “the best things in life are free”, but for a great many things, this is true. Regardless of where you stand when it comes to wealth and privilege, you can still have (and deserve to have!) a happy and fulfilled life.

You have a beautiful life. Don’t spend it worrying about how and where other people are getting their money. 

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  • Avatar
    Evan McFatridge
    February 17, 2016 7:24 am

    Well done Bridget! I to sometimes feel jealous of those people you speak of. The people who have everything given to them. I never had anything given to me. My parents struggled to provide for me and as I hit my mid twenties I really saw the value of a dollar. I should have learned earlier from all the cliches my mother would tell me (A fool and his money soon parts was one of them).

    Unfortunately for me, I was one of those people who didn’t listen to their parents good advice. I partied too hard and spend frivolously through my early twenties until one day I woke up and realized I was on the brink of bankruptcy. I was lucky to have a good enough job that I could dig my way out. It was hard, but I did it.

    After paying off my second consolidation loan a couple of weeks ago I feel like I just got big raise. My fiancé and I are planning to pay for our wedding, not charge it. The next goal will be to save for a down payment on a house. We live in a city with an affordable housing market. Even for the “average Canadian”.

    I make pretty good money now and enjoy some nice things, but I plan for them. I appreciate what I have very much, and I give back as much as I can.

    Reply
    • Thanks for your comment Evan! And congratulations on pulling yourself out of debt and away from the brink of bankruptcy — that’s no small feat!

      You’re doing an awesome job managing you money, and even though you might not have as much privilege as others, you’ve still been able to come very far.

      Reply
  • This is fantastic. The whole list of towards the end is absolutely wonderful. This strikes me often – I feel like I’m running on a hamster wheel, only to realize I need to help others along the way. I may not have incredibly wealthy parents & have built up what I have/know after college myself – but I was always provided a supporting & loving home that will instill great foundations for the future. Weekly, I volunteer at the local Boys & Girls club by teaching a dance class. Last night I almost cried because a girl told me “I don’t like ballet, I only like hip hop.” I then asked her, “Why’s that?” She then told me, “Well I was on a team, and they told me I had to do both classes. My mom couldn’t afford both so I was only taking hip hop. They then kicked me off the team because I wouldn’t take ballet, too.” She was only 10 years old. Then I realized, I volunteer my time at this club because I understand that dance is an incredibly expensive sport and I want to provide free opportunities for anyone to learn. That way parents & kids do not have to get pushed away from the opportunities. Thank you so much for this, I really appreciate this post!

    Reply
  • Generational wealth is a super-fascinating topic to me, and in full disclosure (as I say on my own site quite frequently), the silver-spoon was handed to me by the time I was in high school.

    I think one of the most fascinating parts of generational wealth is that you can really only go one of three routes with it:

    1. Try to one up your parents. I enjoy working a steady a job, but I’ll be striking out on my own soon enough. I had the privilege of learning what entrepreneurship is really like, and I can hardly resist the temptation to try it out on my own.

    2. Living “Vocationally”. Two of my siblings have chosen lower paying careers specifically because they do not feel the need to prove they can earn money, and instead they want to work in fields where they can give to others as best as they can. Outside of their day job, they do a lot of volunteering. They can do this because they don’t have student debt and because they know they’ll never have to financially support my parents.

    3. Piss everything away on being average. Sadly, many people who grew up with privilege commensurate to mine will simply enjoy a few extra tropical vacations or a slightly bigger house, and nothing awesome will ever come from the privilege at all.

    Reply
  • I guess I can say I was a bit fortunate to have some help from my parents growing up. However, they were immigrants who started out with very little when they first came to Canada. My dad said he had only $100 in his pocket and lived in an apartment with 5 other people.

    My mom lived in a tiny town in Newfoundland for a year before moving to Toronto. I can’t even imagine what kind of culture shock she experienced over there. But she said everyone was very nice and welcoming.

    They had worked very hard to achieve a comfortable retirement. I’m not sure if their wanting to help as much as they can was their way of trying to prevent me from going through what they went?

    Mind you, I paid for the majority of school, received a small sum of $1000 as a housewarming gift and I paid for most of our wedding with my own money.

    Growing up I was jealous of anyone who had a ton of help from their parents, even though I received a bit of help here and there.

    And even now from time to time, I compare myself to people who are further ahead in terms of their careers, earning potential and life in general.

    Thanks for reminding me to practice gratitude more.

    Reply
  • Avatar
    Laurence Côté
    February 17, 2016 3:02 pm

    Even if you are spoiled by your parents, you can screw up bad. I’m the perfect example. My parents spoiled me as long as I can remember; they paid for all of my extracurricular activites, tuition fees and even bought me my first car. They tried to teach me about money but I didn’t listen. They paid a lot for things they considered important, such as school and transport. But when I wanted a new cellphone or a mp3, they said no.
    So at 16 years old I started working every week-end. At 21 I rented my first appartment. My parents were sending me money every month, I had a very well paying job for my age and still, I managed to rack up thousands of debt in a short amount of time (6-7k).

    When I realized how much money I owed and how much that I had to work to pay it off, I also realized how much my parents gave me. I managed under a year to pay all my debt. I worked 16 hours shifts, or every single shift my job asked me to do. I then asked my parents to stop sending me money, as I was making enough to be financially independent. They gave me enough in my life; I truly felt guilty that year of not being grateful sooner than my twenties.

    I’m 26 now and I’ve bought a rental condo with 20% cashdown on it without the help of anyone. I’m also going to buy a house with my fiancé in two months (with only 5% down boohoo) and our parents didn’t help out. We want to get married only when we have a decent amount of cash for it. I expect our parents to give us money but I won’t depend on it and never ask for it.

    I’m glad I changed my mind about money. I’m glad now that I know the true value of it. I’m way more happy now because I don’t take everything for granted. More money doesn’t equal hapiness!

    Reply
  • Thanks for writing this Bridget, it’s totally something that crosses my mind all too often, to the detriment of my psychological well being. The hubs and I are in a similar boat where we each paid for our own education, paid for our wedding, and now will pay for a down payment on our home. In the meantime, so many of my friends have had a ton of help in each of these departments. Comparing myself to these people is akin to being angry for losing a race in which they’ve all started kilometres ahead of me (or with weights like you said!) .

    There’s something to be said about earning these things through your own hard work, and your message about not worrying about where others got their money is the kick I needed to stop being so damn negative – thank you!

    Reply
  • Yes, I think it’s so easy to lose sight of the things we should be grateful for especially when the “comparison monster” comes around.

    I have felt angry and jealous before (not gunna lie) when I see my peers rolling around in luxury cars, taking off on vacations on a moment’s notice and squandering away money on party nights out… while I have foregone such luxuries to pay off my student loans. It’s easy to think “it’s so not fair”. And it’s still a struggle everyday but thank you for this post, for reminding me to be grateful and there’s so much I’m learning from footing my own way 😛

    Reply
  • My fiancee and I both come from lower middle class upbringing too, and my condo, our home, educations, and even braces were paid for by ourselves.
    It was especially hard for me, as I had a best friend from the age of 13 whose parents were super wealthy. Watching her go on vacations, and her mom take her on shopping sprees, while my sister and I had hand me downs and a vacation only if my grandparents paid for it.
    I think it made me who I am. My fiancee and I sometimes talk about how when we were ‘poor’ (starting our careers and living outside of the home) we were happier, and things meant more when we had to work hard for them.
    We too hope to instill a work ethic in our children to help them appreciate and value what they have, even though they will never go without like we did.
    In the end my best friend had major debt issues, had her parents bail her out twice – which totaled almost 50K – and still hasn’t learned to budget, though she makes a good income. Her parents own her condo, and car, and still make her condo fee payments for her. She has no mortgage either. She feels like she can’t make her own decisions (move out, sell her SUV) because everything she has belongs to her parents. As much as I used to envy her ‘things’, I think I ended up in a better position now, later in life.

    Reply
  • Bridget this is a great article. One thing that had been a huge fact in my life is the difference in my wife and my background and how we have had to adapt. I came from nothing, less than nothing for the most part. There were many nights I went to bed cold and hungry because there was not enough gas to heat the house and no food in the kitchen. I have struggled and worked and done what I could to get out of that situation and even though I’m not rich by any means I now make more than enough to care for my needs and even a few wants.

    My wife on the other hand has that family who has the safety net. I appreciate their lifestyle and how money isn’t something they shy away from talking about, it’s not bragged about its just a matter of fact thing.

    Bringing the two of us together has been difficult at times but it truly is a showing of the difference between those who grew up with money and those who did not.

    Reply
  • This is my first time commenting, and I felt the deep need to as this post really, really hit close to home.

    I come from an immigrant family that had to struggle, that faced even harder struggles when it became a single-income immigrant family. I started working at 14, and since then, I’ve paid every cell phone bill, rent since I turned 17, every dollar of my university costs and every penny for every trip I’ve taken. Both my partner and I will not benefit from parents’ money; in fact, as they get older we will need to support them financially and likely at great costs.

    At 30, my stomach knots at all the ‘good news’ of friends’ new (Toronto-priced $,$$$,$$$) homes, luxury weddings, and epic trips. It’s hard not to feel like I’m ‘behind’ when I hear those things and then have to dodge questions like “so when are you two going to buy a house?” or “when are you two getting married?” I feel like it turns me into an awful person at times as I want to yell back “when I pay back my $60K of debt that’s financed my education and my living, but you wouldn’t know what that’s like because you haven’t even bought your own Windex before!” (I use the Windex example a lot, because it takes me back to 19 year old me not being able to go out to the bar with everyone else because I spent my last dollars before payday on Windex and paper towels for my rented apartment, which I was also paying for myself – at 30, most of my friends have never devoted a cent of their income to their rent let alone Windex – they get to keep it all as fun money!)

    Thank you for posting this. It’s really comforting – and motivating – to know there are others out there working hard and working smart to achieve their goals and getting there without the help of the Bank of Mom and Dad.

    You’re beyond awesome. Keep it up!

    Reply
  • Great article, really gives a lot to think about on both sides of the spectrum. Growing up I didn’t have a lot but as my father’s construction company grew and my mother advanced in her career we started to see the affects. I was fortunate enough to have my tuition paid and most of my rent. Although when I started slacking off and failing courses that all ended and I got a great wake up call to get my shit together.

    Point being, I don’t see anything wrong with financial help just as long as parents take the opportunities to allow their children to figure it out on their or and fail at least once to make sure they have some drive and aren’t completely spoiled brats.

    Reply
    • I agree – I was fortunate enough to have my undergraduate degree paid for by my parents. When I was in class and saw peers slacking off, I wondered – do they know how much this school costs? I was very aware how much every class cost and how I should not take advantage of my situation.

      Reply
    • I agree that even if you have ample money you should give your children opportunities to make choices and especially to learn about opportunity costs and delayed gratification.

      When our sons started middle school they got a monthly allowance that would have covered lunch once a week and milk everyday. They knew that If they spent it or lost it we wouldn’t replace it. They were soon brown bagging every day and drinking water with lunch.

      We could have easily afforded to send them on every school trip but when we learned that some of their classmates had to fund raise 100% of their trip costs we decided that they should do the same. One got very selective about which trips he went on. The other went on every trip (including one to Europe) but in baking for the weekly bake sales he became a very good baker.

      When one son was about 13 he lost his retainer. He paid for the replacement.

      From the time they were very young we talked about how paying for our own education meant that no body could tell us what to study or what we should do with our education. (So it didn’t matter how many years of university I had when I decided to be a SAHM.) When the time came they chose to borrow to pay for their own educations and they understood that, since it only makes sense to borrow money for things that appreciate, they should choose programs with bright career prospects. (And when they got there they also understood that non stop partying was not a good way to use their student loans. )

      Reply
  • Definitely some good nuggets in here. I think regardless of where you come from, it is what you do with your financial knowledge that is important. If you are one of those from the “funnel of privilege”, are you sharing how you were able to accomplish those things? Knowledge is power.

    Reply
  • Great article! Generational privilege is such a tough topic for many reasns–moral, ethical, practical. The big picture here is how can we set a baseline of opportunity for everyone? I don’t know if it’s achievable. Whatever the baseline, successful parents will always share privilege with their kids. But it does seem like education ought to be free…

    Reply
  • Bridget, I love this post! It always comes at a time when I need a gentle reminder, or a punch in the face. Both are welcome. As someone whose financial past mirrors yours very closely, I am hustling to get myself into a position of financial security. It’s really hard to swallow the fact that I need to put back full price strawberries at the grocery store and my close friends are getting married Pinterest style, and buying their SECOND homes. But nonetheless, I know the fruits of my labour and effort will be extremely sweet when I get there. Thank you to your blog, and your constant reminders that I can be a badass bitch with a healthy bank account, without any help from the Bank of Mom & Dad.

    Reply
    • Thanks Emilia! So glad you enjoyed it. This line says it all, “I need to put back full price strawberries at the grocery store and my close friends are getting married Pinterest style, and buying their SECOND homes.”

      gahh I know that pain all too well!

      Reply
  • I’m one of those people you speak of, very lucky to have had my parents invest early on in my life in post secondary education. I’m also very lucky in many ways that they weren’t in the same position when they grew up and taught me their values about saving, understanding how privileged I am, and about not taking anything for granted. So when you say you will pass that along to your kids while also giving them opportunities – from having been one of those kids, you are giving them the best gift: opportunity and privilege, with the ability to think critically about that privilege and empathize with those who are not so lucky.

    Reply
  • This was an excellent post.

    I’ll share a bit about my own experiences. My parents ‘immigrated’ from rural Newfoundland to Toronto (one of them was born before NFLD was a part of Canada, the other born mere months after NFLD joined confederation). They had no money. They worked hard and made sacrifices, essentially they were immigrants that worked up to a ‘double mortgaged’ house to raise a family outside the city.

    I paid for my own post-secondary education (STEM), and lived frugally (but certainly not in poverty, or in want of food, but no huge drink-ups or spring breaks, or any travel not related to education.)

    My wife & I paid for our own wedding, and eventually, a down payment on our home, entirely ourselves. I’m not saying this to brag, but it gave us both the confidence in our control over our situation, with our extended family, and with our own family (2 young kids). We were both used to a lower-middle class side of living without splurging, we didn’t need to put ourselves into debt for a big home or fancy cars, but can use our ‘better income than our parents’ to free up more important things, in particular, time. It makes our marriage less stressful to know we are not beholden to family for any leg-up, and lets us now give comfortably to charity and oversee our own kids upbringing, and instilling some of that (although their privilege is going to be greater than ours, we still make efforts to clamp down on entitlements).

    I should note that being born the mid 1970s puts me in the GenX category, and while I felt the sting of expensive education (I was on the cusp of when University Costs started to rise dramatically in Canada, and well after the point where the government cut out grants, and was forced to take loans). I don’t know if the ‘dumb luck’ of timing played into things (it probably did) or the fact that my wife was working full time when I was still finishing my degree eased risk (it definitely did), but I can assure you that expectations and the ability to live within modest means and not feel ‘left out’ played a much bigger factor.

    Reply
  • Excellent post.

    As a GenXer, it’s hard not to notice changes in expectations when I read:
    “I paid for my…
    – education
    – wedding
    – rent
    – down payment”

    Not long ago such things would have gone without saying, since having ones parents pay for such things would have been unusual (although customs over wedding financing have varied widely over time and cultural background).

    There have always been some parents who have helped their children financially, but in the past most simply weren’t in a position to do so. The Boomers however had smaller families and are much more likely to be wealthy enough to help out their children than previous generations.

    There are other changes too. A greater share of people require post-secondary education, and the cost of education in Canada exploded in the 90s (this change also applies to GenX). A wealthier society raises expectations on more extravagant weddings. Home prices in Canada have risen far faster than incomes the last 20 years.

    I believe that financial help from parents is partially a result of these increasing costs, but also a driver of them. It’s clear that many parents are helping their children with down payments, which increases both the pool of buyers and is the main reason (besides low interest rates) for the skyrocketing price of houses. This is true for about 50% of Millenials in the US according to your Zillow quote, it is assuredly a much higher share in Canada, where housing costs nearly twice as much.

    This ties in to your comments regarding down payments on your previous blog entry. Not only should one not borrow for a down payment, one shouldn’t be accepting financial help from parents either. If you can’t raise a 20% down payment, you likely either can’t afford the home, or the market is overpriced, or both. Renting will have to become much more prevalent, and people are going to have to live with the ‘shame’ of renting until society’s outlook adjusts, and/or sanity returns to the market.

    FWIW, the funnel can apply even to those with less privilege. Despite high education cost inflation and a far worse economy than today, I was lucky enough to earn enough to fund my own education without loans or financial help. In turn this allowed me to borrow to start a business upon graduation, and afford a 20% down payment on a home before the housing mania began.

    Since graduation, education costs have only further increased, and so I intend to partially fund my children’s education. The (inter-generational) funnel lives on.

    Reply
  • It’s definitely more extreme in the US. So as a Canadian, it is hard to comprehend the level of student debt or variance in family wealth. I think just the right amount of privilege is desired.

    Reply
  • Hi Bridget,

    I agree with you that there wont be any free down payment for a house, or free wedding… no way! even thought that i am GOING TO give my kids their free wedding and free down payment and their free education, i wont tell them that i am going to give them! no way. I want them to work hard to earned that money for such things.

    I myself, have a generous parents who support me and my sister wholly, my parents given me everything: that rent stuff, that utilities, that education, the wedding, the car, the down payment, even they said to me, i am now 16 weeks pregnant, they dont mind to paid for my kids’ expense.

    But you know, it doesnt always went good, i mean i thank you my parents for the privellege and everything they given me.. but i got spoiled, and somehow in my early to mid 20s i dont know how to manage money!

    I love your post 😀

    Reply
  • This is something I think about a lot.

    I think about how coming from a less privileged background can really help someone’s work ethic. I have friends and coworkers who came from very little, and their background pushes them to be their very best and achieve great success. I know people from wealthier backgrounds who don’t feel any urgency to work hard, so they coast.

    I read a really interesting article about the fact that a lot of millennials are depending on a moderate to large inheritance, and that they feel no urgency to work because they expect this money to fall into their laps. I find this problematic, mainly because nobody knows for sure what will happen in the future, and it seems awfully risky to me to put faith into something that isn’t guaranteed. The fact that everyone is living longer also makes this even more questionable: if millennials do end up seeing this money, when will it be? How can they survive until then?

    I think the whole issue is very interesting. But ultimately, I feel like coming from a less privileged background can make people way more responsible, hardworking, and as a result, allow for even more professional success.

    Reply
  • “The irony if it now seems to be that, having grown up without significant financial privilege myself, I will likely pass plenty on to my children.

    Their carseats will be buckled into the backs of luxury cars, they will never be told they cannot participate in a sport or extra-curricular activity, and their university educations will be paid for. ”

    This is all very interesting, because as someone who grew up with a ridiculous amount of privilege, I plan to do the exact opposite, though I’m certainly willing to compromise with future wife if she feels differently. My parents both drive lexuses, but I plan to always drive a Honda. I wouldn’t want future kids to think driving around in luxury cars is a normal expected thing. In that way, my parents were good in teaching that you have to work hard to have nice things in life, but what I seemed to get out of it was…”you can have good enough things and work less hard”……which is probably not at all what they intended, but that’s okay.

    With sports and extracurriculars, it wasn’t so much “you can do this activity if you want to”, but rather “you are doing this”. I think my parents wanted us kids to be well-rounded humans and so they exposed us to all sorts of things like piano lessons, swimming lessons, tennis classes, self-defense, gymnastics, soccer and science camp early on, I also did indian guides, cub scouts, basketball, and baseball, whereas my sister did dance and girl scouts and probably some other things…and all of this stuff was before the age of middle school. (14?) By the time I hit college…I just wanted to sit in the dorms and play on the internet.

    I feel like If I had to fund my own college education, that I would have made better education (career) choices, so maybe it would be a case where I would offer to pay it off at the end, but I wouldn’t want them to know that until after the fact. I think there’s also some pressure that you want “to do better than your parents did”….and that’s easy if you grew up roughing it, but not so much when you grow up very privileged. It’s something I have lots of internal struggles about which is a little ridiculous considering my longest relationship was one month long.

    Of course fully expect future wife to tell me that is a horrifically cruel way to go about life with children, so you never know what will actually happen vs. what I think in this moment.

    Reply
  • Avatar
    Hayley Hofstetter
    April 12, 2017 9:37 am

    Yes, the privilege you have growing up can certainly become a “privilege funnel”, but there is a huge part of the equation you’re missing here: decisions made along the way. I grew up in a family with a scarcity mindset just like yours. I had a job from 16 all the way through college and paid for my own rent, living expenses, etc. Although my student loans would be solely on my shoulders, I was also the lucky beneficent of financial aid, due to my family’s lower middle income situation.

    These experiences, and the knowledge that I would have some debt upon graduation ($25k) that NO ONE could pay off but me, encouraged me to go into the field of engineering. I wanted to make sure I never had to worry about a rent payment again. And it worked – I had a high paying position out of college, and have continued to do better and better through a series of strategic job hopping moves and salary negotiations. All were carefully thought out choices made by me, because I knew where I wanted to get and how I needed to get there based on my previous situation in life.

    When millennials haven’t made the smartest financial choices, there is always room to turn it around – even without a privileged background or rich parents. Google “starting an online business for free.”

    Reply
  • First of all, I’m a big fan of Money After Graduation and find the content both interesting and very practical. Thanks for providing it!

    I think you missed one really important form of financial privilege: whether or not your parents actively teach you how to be mindful and responsible with money and how to plan for the future. The interesting thing with this once is that it’s not necessarIly associated with “rich” or “not rich” parents but I’d argue it might have a very profound effect on your financial standing later in life. If you aren’t taught how to manage your finances as a young person, how long does it take to figure it out and how far behind in your decision making and saving might you be before you figure it out?

    Personal finance skills are not taught well in Canadian public schools (or at least weren’t when I was doing high school!) so those without someone to teach or mentor them are set up to be less successful financially. Those who are taught are more likely to start early on a good financial path.

    Going back to the topic of the funnel of privilege and giving your own kid much more than you ever had: you can absolutely do this without them becoming spoiled. Not all those with major financial privilege are clueless ingrates 🙂

    Thanks again for all that you share!

    Reply

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