Are You Smarter Than Your Parents with Money?

Last year I was carrying out the last few of my grandpa’s belongings from his house. Due to age and medical issues, he was moving out of his house and into a care center. 

A few aunts and uncles helped out along with some of my cousins. We went through boxes that probably hadn’t been seen in decades. One box had a stack of mortgage invoices that were handwritten by my grandpa. One particular payment quickly made the rounds among the family because of the number written down. It was a monthly payment for his house for a grand total of……….. $15!

Generational Money and Spending

My grandpa worked at the local steel mill for 25 years. He didn’t do the hard labor but worked in the marketing office creating company documents. Back in the day, those documents had to be done by hand and type set or typewriter because computers didn’t exist and there was definitely no adobe software to help out.

His salary was not amazing but his retirement benefits are incredible and don’t exist at any company these days.

The total price of his house was lower than what I made in three weeks of work. It seems silly now and you just sit back in amazement at how cheap things were, but at the same time, it made me wonder how much my grandkids will be paying for things decades down the road.

Prices by Generation

When I did the math for what my grandpa paid for his house compared to what my parents paid for their house I figured it out to be about six times more for my parents. My parent’s home would be considered a giant bargain today. 

Most new cars are around the same price as what my parents paid for their home. It was about half of what my down payment was for my house. Then when I made the comparison of what my parents paid to what I paid for my home it was about eight times more than what my parents paid for their home.

Size wise my grandpa had the smallest house, but the biggest lot at nearly half an acre. It had no garage and didn’t have a dishwasher. The kitchen was maybe five to six feet long with enough room for two people to fit uncomfortably together with very little counter space. Yet it worked for a family of seven and I thought it was always cool to have lots of big trees to climb in the backyard.

My parent’s house is on a third acre and is a nice rambler with no garage (until last week) because they have nothing else to do in retirement and keep doing projects like crazy. They have about 800 square feet than my grandparents. It worked great for a family of four. I lived upstairs but when I was too cool as a teenager I moved into the basement because teenagers know everything and that is what we do to get away.

My house is twice the size of my parents and there are just three of us. I moved out about 20 miles away from the biggest city and work. I also enjoy a little bit more country than city lifestyle where I am closer to the mountains, trails, and getting out of town. I am a big believer that homes (drywall and 2×4’s) don’t bring happiness. 

A big house is no guarantee of anything other than more to clean. I’ve moved out a lot of failed and unhappy families that were stretched too thin having their dream home that only turned out to be their ultimate nightmare full of stressful nights wondering how to make the payments. 

Nothing ever compares to the activities and time spent together as a family. Time together is a far better life investment than an extra bedroom or granite, but a lot of folks equate home size with happiness (now off my soapbox and back to some numbers).

For what we paid and where things are today price-wise out house turned out to be a bargain, but looking at it by generation it looks pretty crazy. Here is what we are paying for our house by the day (just the mortgage – not utilities and everything else).

Grandpa – $0.50

Dad – $3.65

Me – $28.95

The Same, Better or Worse than Parents

The interesting thing is just because prices were less or someone makes more money (I make way above what my dad and grandpa ever did for my age), it doesn’t mean success with money. The greatest predictor of success has come down to spending and not salary.

Sometimes you don’t spend the money because you simply don’t have it. Sometimes your circumstance forces you into your spending however that is not always the case anymore because credit is simply easy and generally accepted as not a big deal.

My grandparents and parents were both very frugal. My grandparents because that was their generation and dealing with war. My parents because my dad was a teacher and you just don’t make much money. My wife and I like to be frugal in spending because we simply like money and we’d like more of it. Wealth accumulation has always been the goal, not stuff.

While I have picked up those frugal spending habits the one thing that I am trying to do better is to invest. I received zero education from anyone in my family about investing because they never did it themselves. So after realizing I was missing out and having the desire to finish my “work career” before anyone previously did in my family I needed to accelerate my wealth. 

By investing early on and getting smarter about my money I hope to achieve financial freedom about 10 years before my dad.

My parents and grandparents taught me great lessons and I want to take them to the next level. 

I am excited to share it with my daughter so she learns it early on and then down the road she can clean out my house when I’m old and pull up some old payments and laugh at how cheap life used to be back in 2015. But I’m sure it will be more like: “wow my dad was a cheapskate, I knew he had money.”

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