Burning Desire For FIRE

Financial-Independence-Retire-Early(er). Achieved the first two letters of FIRE, now onto the rest!

Category: second-generation FIRE

How to be a wonderful Santa with very little money.

Santa in front of a Christmas tree.
Actual photo of me late on Christmas Eve.

This post is very important to me. As a single Mum with 4 little boys and VERY little money, Christmas was always a time when I was on my toes. I wanted it to be a magical morning, with Santa presents that brought joy and delight, because the window of time for that Santa magic is small and very precious. Just because I chose to leave my husband with $60 cash in my hand and 4 boys under 5 under my arm, why should that mean that the boys should miss out?

I’m sure I’m not the only one who has had this problem. Fortunately, there are ways around this to deliver a magical Santa reveal every single year without ruining the family finances every December. The huge advantage that Christmas has over other, more mundane ’emergencies’ is that it happens at the same time every year. Grab any calendar… there it is on December 25. So it can be organised and planned for.

I’m a teacher by trade. English and DRAMA. The Drama teacher hat always comes to the fore at Christmas. What’s one of the best moments whenever people go to the theatre? It’s that moment of anticipation when the house lights go down and the curtain is about to open. The audience’s attention is at its peak, waiting for the magic of being transported to another time and space.

Kids are like this on Christmas morning. Why do you think they wake at 5 AM and race breathlessly down to wherever Santa leaves his gifts at your place? Yes, some of it is pure greed, but most of it is because something crazily wonderful has happened overnight – something has been magically produced out of nothing.

That first moment when they see their pile of gifts – that’s what I call ‘the REVEAL.’ It’s all-important. It’s pure theatre. And I always wanted that first reaction to be “WOW.”

I love Christmas! Always have. To me, Christmas is a time for family and, back when the boys were small, a time to spoil the kids. I love it so much that part of the custody arrangements when my marriage broke up was that I would have the boys every Christmas Day, while my ex-husband would have them every Easter Sunday.

When my oldest was 5, I left the marriage and stayed at home with the boys until my youngest started school. This meant that money was tight during those years. Child support was often only $20/month and the boys and I were dependent on Centrelink payments of around $350/week. I had to pay the mortgage, food, bills and everything else out of this. Fortunately, I was brought up by frugal parents so I had lots of training! But it meant that things like Christmas had to be planned with military precision.

At my place, Santa would leave the presents for each kid in the lounge room, on chairs or on the floor. Each pile of gifts was covered by a blanket, with a label on each pile with a name. The routine was that the kids had to come and wake me up first, then we’d all go into the lounge room together and they’d stand by their particular blanket. Then, on a “ready, set go!”, they’d lift off the blanket and the REVEAL would happen. This routine was a deliberate decision on my part to build the anticipation further and have the energy of the room at fever-pitch. It was always exciting.

Afterwards, I’d have the boys stand together and call out loud, “Thank you, Father Christmas!” When, one by one, the boys started to know the truth, they’d look at me while calling out this – a private way they’d thank me while still keeping the magic going for the younger ones.

Anyway, I’ve set the scene for how the Santa REVEAL was done at my place. Here are the ways that I worked to make that particular December morning a hit for my boys on very little money.

Kids are visual creatures. 

Little kids aren’t very bright. If they get a pile of gifts from Santa, they’re wildly excited. This doesn’t mean that every item has to be brand-new, designer and expensive. What you (as Santa’s helper) are aiming for is the thrill of the REVEAL – when the covering is lifted off their gifts and they see it all for the first time. This allows you, as the official shopper for Santa, to spend strategically. 

What I aimed for, particularly when the kids were small and still believed, was to have a lot of colour and lots of items for their eyes to take in as the blanket came off. A central ‘show-stopper” item that the kid was really hoping to get, but surrounding it – lots of other, more minor things that look impressive in colour and number, but cost very little.

No more than 2 “Show stopper” presents per child. Usually, just one, or none if the child is very young. Spend your money in a way to get more bang for your buck.

Sure, I wanted Christmas to be impressive, but I wasn’t made of money! Plus, with 4 kids, that money had to stretch as far as possible. The boys didn’t need a roomful of expensive gifts from Santa – they’d be getting presents from my family, their father and their father’s family. The REVEAL from Santa is the most important, of course, but their entire Christmas experience didn’t hinge on just this. 

So I’d listen. And I’d arrange to buy one or two brand-new things that the boys were desperate to own. When kids are young, you can buy these things at the July sales, because toys are toys. Kids are easy to plan for when they’re in pre-school to middle primary school. But later I learned to delay buying the “show-stopper” gifts until December. Teenagers are so unpredictable and there’s always a new game or album or something released just before Christmas that turns out suddenly to be the “must-have.”

When kids are very young, these “show stopper” gifts are most impressive when they’re physically large. A dolls house, a trike… things like that. Little kids equate size with value. Funnily enough, as the boys got older their “show stopper” presents started to shrink in size. A particularly coveted console game or CD/DVD used to be VERY successful at our place. Zelda and the Ocarina of Time for the N64, for example, was physically unimpressive but was greeted with hoots of joy.

And now I have that ocarina music in my head. The boys played that game for hundreds of hours. Safe to say that show-stopper gift was a success.

Shop around for “filler” gifts – the more of these, the better. Don’t pay retail prices for these if at all possible.

Garage sales are your friends. Here in Australia, we’re so lucky we have Christmas in summer, because spring cleaning happens and people get rid of the toys their kids are sick of. These toys are PRIME filler material. Their kids may be sick of them but they’re brand-new entertainment for your kids.

Every fortnight, when A had the kids for his access weekend, I’d go and hit the garage sales in my neighbourhood to look for filler gifts for Christmas. I’d start as soon as Spring began because you never know what you’ll find. Fortunately, most toys for little kids are pretty generic – if you buy cars, dolls and lego, you’re good to go, so these things can be bought months in advance and you know they’ll be successful.

I have boys, so anything round and designed to be thrown or kicked was always a hit. Tennis balls, usually second hand, along with bats or cricket stumps, also found at garage sales and op shops. Aussie rules footballs, especially for Tom, were also a good filler item. Sheet music for David, guitar strings for Ryan and quirky fun things for Evan were all things I’d keep my eyes open for and snap up if I came across them at a good price. You know your children – cater to their interests.

I also used to use filler space to buy things for Christmas that I would have been buying anyway. I like the boys to look nice for Christmas Day with my family, so Santa would always bring new clothes for them to wear. Some years the clothes would be brand new, other times they were gently worn clothes that still looked new, depending on my finances. The boys didn’t care either way.

Bathers were another frequent filler, seeing as how Christmas is in summer, along with artsy things like textas and pencils that they’d need for school the next year. Clearly, these weren’t as exciting for the boys as the toys, but they bulked up the piles of presents every year and helped them to look more impressive. Remember, it’s all in the REVEAL.

Start some Christmas traditions that cost next to nothing. 

You know those little bags of gold coins that appear at every supermarket and dollar store checkout in December? The chocolate inside is cheap, but kids love the glint of the gold and the feel of holding treasure. These bags only cost a dollar or two each. Every year they’d have a bag of coins in their pile of Santa gifts.

I’d buy a packet of those little Kellogs mini breakfast cereal packets and the kids would have a couple of mini cereals to have for breakfast on Christmas morning – along with the chocolate coins, of course. I never bought those mini cereals at any other time of the year – far too expensive – so the boys were convinced that this was a Santa thing and looked forward to seeing which breakfast they’d be getting this year.

When the kids grew older a tradition started where they’d be the ones to assemble the Christmas tree. We have a large fake one – being frugal I didn’t want the added expense of buying a real tree year after year – and the boys put it all together and place the decorations on it. Over time, the Christmas tree decorations become treasured memories for them. “Oh! Here’s the aeroplane! I like this one!” or “Has anyone seen the bird that sits on the top of the tree? I want to do it this year.”

One of the most enduring traditions – and by that I mean that we still do this – is something that I first bought as a filler present in poverty-stricken desperation. I bought some little jars of bubble mix as a bit of fun for them. That first Christmas, we went out into the backyard and started blowing bubbles. The dogs went nuts jumping and trying to catch them and we had so much fun. It was a much greater hit than I thought it would be, so the next year I tried it again. The dogs, and later, the cats would come out with us and they’d jump to try and catch the bubbles and we’d laugh and chill in the sun. The house next door to us was a rental and when there were kids living there, the boys would blow bubbles over the fence at them and the neighbour kids would race to pop them first.

Poppy, Jeff and Scout will be chasing bubbles for a while on Christmas morning – it’s fun and costs next to nothing. It’s a corny little throwback to when the kids were little and we enjoy it.

Finally, enlist the older kids into keeping the magic alive for the younger ones.

I had a pretty good run with Santa. Tom, my oldest, was 9 years old before he asked the question one day. Now, just between you and me, Tom9 was a blabbermouth, so I knew he’d be the weak link in the chain of silence, so I whisked him away down to the bottom of the garden under the old fig tree.

I said, “Do you really want to know?” He looked at me as if to say, ‘I’m not an idiot – just by saying that you’re confirming that Santa isn’t real.’

So I smiled and said, “Yes, you’re right. Father Christmas isn’t real.”

He nodded, then said, “So who does it?”

I looked him dead in the eye and said, “I do. Santa is me.”

His mouth dropped open. He looked stunned. He said, No WAY. You can’t afford it!!!”

I laughed and laughed. “Christmas is special. It’s magical. I make sure I can afford it.”

He gave me a huge hug, then looked stricken. “Oh no,” he said. “I’ve been telling the boys to ask Santa for all the expensive things they want, so you don’t have to buy them…”

OMG. How gorgeous is that?? What a beautiful little boy.

I thanked him for looking out for me like that, then we switched into the “you had many years of enjoying the magic, so now you join the grown-up world to preserve the magic for your brothers” talk. I was a bit nervous about it. Like I said, Tom9 was a bit of a blabbermouth, but he came through for the boys and Santa beautifully.

He loved the idea of being more grown-up than the others. He’d write Christmas lists with them and let me know what they were hankering for. he’d help hustle the kids off to bed on Christmas Eve so I’d have time to set up the presents. He’d stay up a little later than the others, so he’d get to bite the carrot we’d leave out for Rudolph and eat the snack for Santa, while I’d drink Santa’s glass of Shiraz.

One by one, the boys found out the truth, but never from their older brothers. Evan was the last one. From memory, he was Evan7 or Evan8 when a nasty little kid told him Santa wasn’t real on Christmas Eve!!!!! I was furious when he asked me about it as I was putting him to bed that night. What a time for him to have doubt put into his mind!

What was I to do? He had been all geared up for a visit from Santa and was so excited. I looked at his little eyes and saw hope there – hope that the kid had lied to him. He was so little… but my parenting style has always been that if a kid is old enough to ask a question, then they’re old enough for the answer.

I made a split decision and broke my rule, opening my eyes wide and saying, “Of course he’s real. How else could all of those presents get there?” He smiled, relieved, and snuggled down to sleep and I tip-toed away, feeling like a heel but wanting him to have just one more Christmas morning of magic.

Just after Easter he asked me again. This time I came clean and when he asked why I’d lied to him before, I told him why, saying that I wanted him to have one last magical Christmas. He thought about it for a second, then nodded and simply said, “Thanks.”

Then he looked up at me and said, “Don’t tell me the Easter Bunny isn’t real either?!?” And like that the magic was gone.

Christmas now has a different kind of magic for our family. The traditions and routines have evolved now that we are a family of adults. Christmas is still hugely important but now we all buy gifts for each other. My extended family has a Kris Kringle where we buy for only one person (price limit of $50) and the boys have the same price limit for each of our nuclear family. Three of them are still students so this is a big expense for them of $250 – 3 brothers, 1 mother and 1 Kris Kringle… but like I did back in the day, they save up for it throughout the year and enjoy the plotting and planning to get gifts that suit the recipients down to the ground.

Christmas is as important to them as it is for me and we put a lot of effort into the presents we organise. We look forward to getting together with Mum and Dad, my sister Kate and her family and of course, each other. The boys still come over every year to assemble my Christmas tree – now with added decorations from my travels in Europe, China and North Korea – and those still at home will blow some bubbles for the pets on Christmas morning.

For those going through a financially challenged Christmas, I hope that I’ve helped with some strategies. The funny thing is – some of the things that I introduced to make Christmas affordable are the very things that are now cherished family traditions! It’s very possible to have a wonderful Christmas with your kids on limited funds. It’s all about a little bit of forward thinking and – of course – the REVEAL!

Monkey see; monkey do… or do they?

This morning, a few minutes ago, a little thing happened that made me think about the effect we have on the people around us. We don’t realise it but in all sorts of weird and wonderful ways, the things we do and say often rubs off on those around us.

I’ve mentioned on this blog before that I always put at least one ‘Dad joke’ up on the board at the start of each lesson. I started doing this a year ago and the kids love it. If I start the lesson and forget to put them up, they always remind me. Admittedly, my year 9 class have asked me to stop doing this before the corniness kills them… but they never fail to ask for the Dad joke when I ‘forget’ to do it. They’ve already asked me to email them next year with a Dad joke a day when I’m not their teacher anymore.

After a few months of this, some kids have started emailing me with Dad jokes that they’ve found. A typical email might read, “Hi Ms Jones. I was away today and I was wondering what work I missed. To make up for it, here’s a Dad joke: ‘I saw a magician yesterday that turned audience members into wind turbines. I immediately became a big fan.’ See you tomorrow!”

I love it, especially when it happens in my own house.

Ryan24 called me into his room to read a Dad joke he stumbled across on a website. He said it was two Dad jokes in one. Seeing as it’s a joke on finance, I thought I’d share it with you. Are you ready for the glory of the Dad joke…?

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‘I’ve started buying heaps of stocks. Chicken, beef and vegetarian stock cubes. One day, I’m hoping to be a bouillonaire…’

I hope no one strained a muscle from laughing too hard.

It got me thinking though. People pick up on what you do. If they think it has value, they’ll copy it for themselves. Because Ryan24’s joke was a financial one, it got me thinking about how the boys are running their financial lives.

When they were growing up, we were living on a financial knife’s edge. You might not think it, but it takes a long time to claw your way out from the pit of starting a new life with 4 kids under 5, $60 in cash and a mortgage just under 100K. I wrote about it here.

Those boys grew up watching me living within the financial rules I set out for myself:

1. NEVER borrow anything. Always spend less than you earn. Actually, the only exception was when I landed the first teaching contract at my current school. It was for 9 months of full-time work and I knew we could afford to get a new(er) car. The Tarago we were driving was as aerodynamic as a loaf of bread and the skylight leaked every time it rained. Whenever I made a right-hand turn, a trickle of water would run down the back of my neck. When I traded it in for a 5-year-old Ford station wagon and took out a 20K loan, I said to them, “I don’t know if I’ll have a job next year, so I’ll be paying this off before my contract finishes, just to be safe.” The kids were Tom13 (now Tom27) down to Evan9 (now Evan22). They watched me do it.

2. You should have everything you NEED, but only some of what you WANT. This translates to their after school interests. I knew that with 4 kids and only my income, we’d never get ahead if I spent lavishly on everything that the boys might have wanted to do. So I got them to prioritise. They were allowed ONE after school class a week each. It could be anything they wanted – sports, music, art, dance, whatever. But only one thing at a time. David25 was David2 when he first asked for piano lessons. He stuck with those and is now putting the finishing touches on a Music degree in piano. Other kids tried a few different things before settling on what they liked. It was ok. They had to decide what they really wanted to explore and then focus on that. I think that’s a good thing.

3. Your money is a finite amount. Don’t spend on things you don’t value, but spend on the things you do. An example of this is overseas travel. I didn’t want my boys to miss out as I had. (I planned a big trip to Europe with my best friend when we were 15… but I didn’t get to go until I was 51; after the boys were old enough to be left alone.) When the boys were younger, I took them on holidays to Bali, Thailand and Singapore and also sent the 2 middle boys to the US with the school’s band. I had to forego a lot of coffees, new clothes and other fripperies to afford to do this, but to me, it was worth it. They watched me saving and planning for all of this.

4. ALWAYS have an emergency fund in place. This one’s pretty self-explanatory. When the boys were very small I had a few years when I literally had no money at our backs if a real emergency happened. I’ve touched on it a bit in my ‘About’ page. I don’t think they have any strong memories of those hand-to-mouth times, (I should ask them!) but what they DO know is that Mum always has some money put away for when we need it.

5. Christmas is important. Always make it a special day for everyone. I insisted that the boys always had Christmas Day with me. As Mum said to me, “You have all of the hard days – you deserve to have the fun one.” A. always used to pick them up at around 6PM that day, after we’d had Christmas lunch with my family. One day soon I’ll write about my strategies for Christmas Day when we were so poor. The boys didn’t miss out on a thing.

So given all this, what are the boys doing with their finances now they’re in their twenties?

At our “We’re out of debt (again!) celebratory dinner 2 years ago.

NEVER borrow anything. Always spend less than you earn. Interestingly, none of them uses credit cards, only debit cards, even though I’ve always used a credit card. I run all my expenses through a credit card, but I run it like a debit card so I rarely dip into the ‘credit’ part of it. They’ve seen how being free of debt has helped our family to become financially independent and I think they realise the importance of it. When we sold the old house to the developer and I was finally able to pay off the bridging loan of 750K that I was carrying on The Best House in Melbourne, I took them all out to dinner to celebrate.

Whenever they’ve needed to buy things like cars, they’ve either paid for them themselves out of savings or they’ve come to me for an interest-free loan. This month, Tom27 decided that he needed a new car. We talked about what he could afford, given his wage, so instead of buying a tinny but shiny new car, he bought himself a 5-year-old Prius. He was spending 18K, which is bigger than the Bank of Mum is prepared to lend. Initially, he applied for a loan from the car yard’s financing, but after getting home and doing some research and some Maths, he realised that getting a loan from someone else will save him over 2K in interest, so that’s what he did. Interestingly, the car yard tried to entice him by saying, “If you get the loan through us you can have the car tomorrow!!!” Tom27’s response? “I’d rather wait a week and have the two extra grand, thanks!”

You should have everything you NEED, but only some of what you WANT. I guess this follows on from not having access to credit, but they seem to be quite good at prioritising what they spend their money on. If they need cash for something, they’ll either sell something to free up some money (which is David25’s go-to), or they’ll tighten the belt and wait until they have the means to get what they want.

Your money is a finite amount. Don’t spend on things you don’t value, but spend on the things you do. Poverty and student life has forced Evan22, in particular, to take this on as a survival mechanism. If he spends all of his Austudy allowance on wine, women and song, then he doesn’t eat for the rest of the fortnight. He lives in Ballarat, so he can’t pop home very often for a free feed, so he’s had to learn to be very self-reliant and to balance his money.

Tom27 is an accountant, (yeah… I don’t know how that happened either…) and he plans out his expenses months ahead to ensure he has enough to do what he has to do, such as rent, petrol car payments etc, before he does what he wants to do, such as recording a new album, travelling overseas and going out.

David25 has a girlfriend and at first, a lot of his money went on eating out, flashy dates etc. Now, nearly 2 years on, he and Izzy spend a lot of time at each other’s houses, watching videos, composing songs and popping up to Coles to get a litre of gourmet icecream as a treat. Ryan24 is the king of slashing expenses to make his money go further.

Christmas is important. Always make it a special day for everyone. Well, everyone’s onboard for this one! David25 doesn’t spend as much on dates anymore, but when it’s their anniversary he pulls out all the stops to make the date a memorable one. He’s learned the art of prioritising in this regard.

We all put thought and effort into Christmas, probably even more so than birthdays. No one’s allowed to buy anything for themselves in December in case they muck up someone’s gift for them and we all sneak around buying and making things that we hope will really hit the spot. I love seeing the boys plotting and planning gifts for their brothers and grandparents – I feel like I’ve passed the baton onto the next generation.

So, given that they’re following all but one of the financial things I modelled for them as they were growing up, I guess you could say that the “Monkey See; Monkey Do” saying is pretty apt. Also, I’m putting it out there that when they get a bit older and start pulling in some real money, the Emergency Funds will come.

This wasn’t what I started off intending to write about – it began with Dad jokes – but I guess it’s a useful exercise to step back and observe the people around you and see what’s rubbing off on them. It seems my legacy will be a love of the Dad joke and a leaning towards the thrifty!

Lessons from Literature: The Good Earth.

Many novels have basic money lessons woven through them, which is understandable really. After all, money is integral to the human condition, which is what literature is all about. Few novels, however, concern themselves with money lessons so much as Pearl S Buck’s ‘The Good Earth.’

For those who haven’t come across it, this is a cracking good read. It covers the story of Wang Lung, a poor Chinese peasant eking out a living on a farm in the days before Communist rule. Wang Lung is poor… dirt poor. But he has ambition and a fierce love of the land. This novel traces his life as he rises from poor peasant to rich landowner and what happens to his character and family along the way.

Wang Lung and O-Lan are married - The Good Earth.
All images are taken from the 1937 film of the same name.

Wang Lung’s wife is chosen for him by his father. A practical man, his father chooses a slave girl from the rich and powerful House of Hwang in the village, a girl who can work hard on the farm as she doesn’t have bound feet, much to Wang Lung’s disappointment. O-Lan is not a beautiful girl, but she is devoted to the farm and to her new family and there is much more to her than meets the eye.

Of necessity, the family is frugal. I first read ‘The Good Earth’ when I was a teen and to this day, I still have to get every grain of rice out of the cooking dish, exactly as O-Lan did. I think of her every time.

They waste nothing. At first, it’s from mere survival instinct, but as time goes on and O-Lan’s skills bring more prosperity to the family, they begin to buy land. In their society, land was the only thing that could buy security and prosperity. This was especially important to them as their family started to grow.

The Good Earth - Wang Lung and O-Lan on the farm.

O-Lan goes back to visit the House of Hwang with her first baby, dressed beautifully. The Hwang family clearly need to read ‘The Millionaire Next Door’. She says to Wang Lung:

  • “I had but a moment for private talk with the cook under whom I worked before, but she said, ‘This house cannot stand forever with all the young lords, five of them, spending money like waste water in foreign parts and sending home woman after woman as they weary of them, and the Old Lord living at home adding a concubine or two each year, and the Old Mistress eating enough opium every day to fill two shoes with gold.’ “

However, no bull run in the stock market lasts forever and it’s the same with life on the land. A few years later famine strikes. Despite having resources tucked away, hungry relatives descend upon them demanding to be fed and soon Wang Lung and O-Lan’s ’emergency fund’ of food and money is gone.

The neighbours didn’t know this and, fired up by Wang Lung’s evil uncle, they descend on the house and strip it bare, looking for food and other items of value to steal. There was nothing but a few handfuls of beans. After they leave, Wang Lung comforts himself with the thought that he’d put all of their spare money into investments, which in his case was land:

  • “They cannot take the land from me. The labour of my body and the fruit of the fields I have put into that which cannot be taken away. If I had the silver, they would have taken it. If I had bought [food] with the silver to store it, they would have taken it all. I have the land still, and it is mine.”

The lesson here is clear. If you store your net worth in things that cannot be seen, you have a better chance of preserving them when things go wrong. Anyone can run away with a bag of diamonds or a shiny new car, but a share portfolio or a fat superannuation account is easy to hide.

The Good Earth - O-Lan grinding grain

Back then in pre-communist China, of course, there were no unemployment benefits. You either starved when the food ran out, or you found a way to make some money. Or you practise geoarbitrage and move to where things are better.

The family sell every stick of furniture in the house, except for their farm implements, and they set off to a big city 100 miles to the south, where the famine hasn’t reached. Geoarbitrage! Wang Lung picks up work pulling a rickshaw, while O-Lan and the children turn to begging. O-Lan utilised skills she picked up as a child to show the others how to make money as a beggar. One should never forget skills that one picks up along the way!

An easy way to make money was to sell a child to a rich family. O-Lan revealed that this was how she herself had become a slave. The couple had two sons and an infant daughter by this time. No way would they part with the sons, but the daughter? Wang Lung decides not to sell her, but it was a close thing.

The Good Earth - O-Lan finds the jewels

Sometimes the road to financial independence relies on seeing an opportunity and taking action. While the family is stuck in the city, with no way to earn enough to get back home, there is some sort of revolution and the rich homes are looted. Wang Lung is borne along by the crowd and takes nothing, however O-Lan, who has lived in a Big House and knows what to look for, finds a cache of jewels.

The family is now set! They travel back home, with enough money to buy lots of land and set themselves up for life. O-Lan requests that she keep only 2 small pearls from the jewels.

  • ‘If I could have two,’ she went on humbly, ‘only two small ones—two small white pearls even… ‘Pearls!’ he repeated, agape. ‘I would keep them—I would not wear them,’ she said, ‘only keep them.’

The rest they use to buy land from the House of Hwang where O-Lan once lived. That family has now fallen into decline, due to opium addiction and general financial recklessness.

The Good Earth - Wang Lung and O-Lan

There is now money enough to employ others to work on the land, money enough to take the sons from the fields and educate them and money enough to support some leisure activities. Wang Lung eventually buys the House of Hwang’s residence and moves his family in. To think! What was once the pinnacle of wealth and power to him, is now his.

However, lifestyle creep starts to cause problems.

O-Lan continues on as usual, but Wang Lung falls prey to peer group pressure from other rich men and starts going to gambling dens and ‘tea houses’. This is where he meets Lotus, a lady of the night. She looks like a kitten, with the smallest bound feet Wang Lung has ever seen.

The Good Earth - Lotus.

She is incredibly beautiful, totally greedy and selfish and she bedazzles Wang Lung. He showers her with money and even asks O-Lan to give him the 2 pearls she had kept from the cache of jewels, so that he could give them to Lotus. After a while he couldn’t bear the thought of other men sleeping with her, so he buys her from the Tea House and brings her home.

He builds her an inner court where she lives with her own household, so she and O-Lan don’t have to see each other. O-Lan is now totally disregarded by Wang Lung as she quietly goes about doing her regular work for the family until her death.

As the family gets older, lifestyle creep continues to happen. But through it all, even as silver streams from their hands, Wang Lung will never sell any of the land he has accumulated. He knows that it’s the bedrock of their fortunes and everything else they’ve managed to build and to buy is based on that.

The Good Earth - Wang Lung

He’s the definition of first-generation FIRE. But unfortunately, he was so focused on his work, what the rich men of the town thought and on Lotus that he made a huge mistake. The next generation had been allowed to grow up without having much contact with the very thing that had given them their prosperity. They could remember nothing but ease and comfort.

At the end of his life, he is living back on the original farm with his daughter and a concubine. He overhears his two sons talking about how they will divide the estate once Wang Lung has died, which fields they will keep and which ones they will sell:

  • But the old man heard only these words, “sell the land”, and he cried out and he could not keep his voice from breaking and trembling with his anger, “Now, evil, idle sons – sell the land!” He choked and would have fallen, and they caught him and held him up and he began to weep.
  • Then they soothed him and they said, soothing him, ” No – no- we will never sell the land – “
  • “It is the end of a family when – they begin to sell the land,” he said brokenly. “Out of the land we came and into it we must go – and if you can hold your land you can live – no one can rob you of land -“
  • And the old man let his scanty tears dry upon his cheeks and they made salty stains there. And he stooped and took up a handful of the soil and he held it and he muttered, “If you sell the land, it is the end.”
  • And his two sons held him, one on either side, each holding his arm, and he held tight in his hand the warm, loose earth. And they soothed him and they said over and over again, the elder son and the second son, “Rest assured, our father, rest assured. The land is not to be sold.”
  • But over the old man’s head they looked at each other and smiled.

How much financial help should we give our kids?

Kids.

A lot of us have them and in general, we tend to be reasonably fond of them. We take pains over what we name them, we feed and clothe them at regular intervals and we ensure that they come out of school being literate and (at least a little) numerate. We tell them Dad jokes, we pay for music lessons and we cuddle them when life gets hard.

In short – we look up after a few years and realise that we’ve actually made our most favourite humans. At least, that’s what’s happened in my case and I’m guessing I’m not alone.

A huge proportion of FIRE bloggers are young parents. They have babies or primary-aged kids, with a lot of bloggers’ children still being ‘a twinkle in their father’s eye’ as the old saying goes. I’ve gone through that stage and I’m now out at the other side with my boys aged in their twenties. We all made it through alive, but when the boys reached secondary school I had to make up my mind about how much I’d help the boys financially once they were older.

When children are small, as in pre-puberty, they cost as much or as little as their parents decide. The parents have full control. It’s a beautiful thing.

In my case, I said to the boys when they were in primary, (and secondary school, come to think of it), that they could have ONE after school activity each. Swimming lessons were non-negotiable – in Australia everyone needs to know how to swim so I took care of that when they were toddlers, before ‘after school’ activities were a thing. In other words, I staggered the outgoings. It wasn’t their fault that we were a one-income family and I didn’t want them to miss out completely on things that their friends were doing, but I wasn’t going to pour thousands of dollars into classes just to keep them busy. Our financial survival was at stake.

David was easy. When he was David3, he asked if he could learn how to play the piano. I couldn’t afford lessons at the time, but when he asked me 2 years later I took notice. For David, two requests two years apart is tantamount to nagging. He started learning piano when he was around 6 years old and is now in his last year of his Music degree.

Tom tried football, cricket and then decided on guitar. He writes songs now and plays for a football team on the weekends. Ryan started with piano, then after a year switched to guitar and continued with it right up to year 12. Evan follows the beat of his own drum and didn’t end up taking any formal classes. He decided to teach himself musical instruments, write scripts and make videos and is currently doing an Acting degree.

Limiting their after-school activities hasn’t seemed to hurt them at all.

Keeping the costs to a reasonable level when they were at school meant that when opportunities for things like travel came up, I was able to take them to places like Bali, Thailand and Singapore – or send them to places on school excursions like Central Australia, Tasmania and the USA. I’ll never forget the elation in Tom16’s voice when I picked up my phone to hear him say, “Mum… I’m on the top of Ayres Rock!!”

(Nowadays everyone calls it Uluru and we don’t climb it anymore as it’s a sacred site, but things were different a decade ago.)

But what was the tough decision I was talking about?

It was about whether or not to help the boys pay for University.

As my boys were heading into secondary school and going through the ranks, I started to think. Tertiary fees aren’t as expensive as in America, but they’re still pretty exxy, especially for the more creative-type courses I could see most of my boys ending up in.

My dilemma was a simple one. I only have one wage coming in and I have no-one to provide for my old age except for me. Do I help them pay for Uni or not? There’s a finite amount of money that will be coming in. Where would it be best deployed?

When I was wrestling with this decision the older kids were in high school, with the younger two hot on their heels. I’d paid off the house a year or so before, back in 2013, and I was staring down the barrel of what looked like it might be an indigent old age. I’d neglected my retirement savings to pour all of my money into paying off the house, which was a deliberate move. Mathematically, it wasn’t the best thing to do, but I valued our security over my retirement. Once the house was paid for and our security was assured, Old Lady Frogdancer suddenly became a lot more real to me…

So I had to think: Which would be the best long-term prospect for the boys?

  1. For me to pay for their degrees, but then later down the track, just when they’ve presumably got young families to provide for, to possibly have to ask them for financial help?
  2. Or for them to pay for their own education, while I save like crazy so as not to be a burden on them?

When you lay it out like this, there’s really only one way I could go. My situation, with no one else able to prepare for my retirement other than me, meant that the money could only go so far.

So, the financial help I decided to give my kids is as follows:

  • I raised you and supported you all the way through secondary school. My job here is done.
  • I want you to go on to further education, so if you’re a student, you can live with me for free and pay no board. However, you’re responsible for paying for any books and other materials. You’re an adult now.
  • If you live with me and you aren’t a student – you pay board. Even though I love you more than vegemite on toast, I’m not cut out in the shape of a doormat.
  • If you choose to move out, then you’re on your own. You’re definitely an adult!
  • The ‘Bank of Mum’ is there if you need to buy a car/fix a car/ pay some tuition not available with HELP loans from the government. It’s interest-free BUT MUST BE PAID BACK PROMPTLY. Any defaults – the Bank of Mum is closed to you forevermore.

I’m hoping that these rules allow enough of a cushion to fall back on, without weakening them and keeping them as ‘kidults’ indefinitely. Currently, I have the middle two sons living at home with me as students. Tom 27 has been out of home and fully independent for around 3 years now and works full-time as an accountant, while Evan22 is studying at a country campus.

I’d love it if the boys could come out of Uni with no debt dragging behind them. That was the way university worked when I was young, when courses were fully paid for by the government. But sadly, life in the real world isn’t like this any more. In order to do the best for us all, I have to take the long-term view.

My worst fear is to be a financial burden on my boys when I’m old. By putting a priority on my retirement, rather than their university courses, I hope that I’ll be giving them the gift of never having to worry about their mother’s financial stability.

I think that’s probably one of the greatest gifts I can give them. I already gave them LIFE. This will be the next best thing…

What has my second-gen FIRE child learned about frugality?

Right from when they were very small, my children have watched me buy in bulk when non-perishables have been on sale, then helped me lug them home and store them in towering piles in the pantry or watched me decant into smaller, more user-friendly containers.

When I was in San Gimignano in Italy in 2015, one of the souvenirs I bought was this olive oil tin. I knew I’d use it and I love it still. I buy 4L tins of olive oil from Aldi and simply decant into my olive oil ‘watering can’ when it runs dry. It’s a similar idea to the non-stick spatula* I bought last year in North Korea. A useful souvenir is a good souvenir!

So what has my 24-year-old son done?

 

Ryan24 is half-way through his Remedial Massage course at RMIT. When massage oil was on the book list for this year, he bought in bulk. He’s bought smaller bottles to decant the oil into for when he goes to classes. Of course, as any second-gen FIRE frugal person would do, he made sure that the unit price for the bulk oil was far cheaper than for 1L bottles.

I’m very proud.

I just hope I don’t ever mistake it for a wine cask one dark night!

(This last photo has nothing to do with the post. I simply thought that some people might want to see the spatula of choice for people in North Korea.)

* I bought this spatula when we were allowed to wander around the supermarket in Pyongyang, North Korea, for 45 minutes on our own, surrounded by ordinary people doing their daily shopping. I saw these spatulas, thought, ‘Hey, I need one of these,’ and brought it home with me. 

Every time I make pancakes I remember my trip. 🙂

What has my second-gen FIRE child learned about money?

 

In the personal finance world, there’s a lot of blog posts written about teaching children about money. I’ve done it myself – the post I wrote that ended up winning the first Rockstar Rumble was about teaching my kids about compound interest. However, a huge proportion of these posts are written by parents with very young children. I’m at the other end of the journey, with adult kids moving out into the world.

I discovered the FIRE path about 5 years ago, so a lot of my boys’ money training has been observing the day-to-day decisions that I’ve made in the previous years, as well as observing the decisions of other family and friends around them.  I didn’t have the information about investing and compounding that I do now, so for most of their lives I wasn’t actively talking to them about this. Their father has been a small business owner for most of their lives, so they’d work in his shop on their access weekends with him and see life from that angle.

A year ago, on the other blog, I wrote about Evan22 moving out of home into Res at Uni in a post entitled: Reduce Your Bills By Evicting One of your Kids!

As anyone who has ever lived on campus knows, choosing to live there is hellishly expensive. Back when my boy was Evan21, he decided to live on campus for a year to get to know everyone and then work out who he wanted to share a house with for the next 2 years of his course. He paid for this himself. His decision to live in Res worked out really well. As he said on the way up to Ballarat, “All the people who moved into houses at the start of the year are now all moving away from the people they started with and moving into different places with their friends!”

Here’s The Playboy Mansion. Evan22 will be living here with 3 girls. They have the bedrooms in the house, while he has the sleepout out the back. He pays the most for his space, at $150/week.

He’s a full-time student over the age of 22, plus he’s living away from home. This means that he can pull in a Centrelink payment of around $580/fortnight. He’s taking out a HELP loan to pay for his course, which is around $6,800/year. I know that many people, particularly in the US, consider it almost mandatory to pay for some or all of their kids’ college/university fees, but I don’t.

I told them all that I was responsible for seeing them through high school. If they choose to go to tertiary education, (the word ‘choose’ should have been in quotation marks because they were left in no doubt that the only choice about that was which course they should do!)… anyway, they could live with me without paying board. They pay for their own books and fees, but their living expenses are nil.

My reasoning is this – I think a better financial gift to my children is the gift of their mother being financially independent throughout her whole life. I don’t want to be in my 80’s and having to go to the boys for a handout every time the electricity bill comes in. They’ll have their own families to support and their own lives to live. I can’t finance their educations and adequately provide for my own retirement – I am but one woman. So they have to take responsibility for their own decisions from here on out.

So how has Evan22, being the youngest of my children, handled his finances after a lifetime of living with Frogdancer Jones? I haven’t directly asked him about this – maybe an interview post in the future might be interesting to get his perspective? – but here’s what I’ve observed.

But first, a little background to put things in context:

 

He was only 11 months old when I left my ex-husband, so he, as one of the younger 3 boys, grew up without any memory of when there were 2 parents in the house. For the next 4 years of his life, I was a stay-at-home Mum, waiting for him to grow up and get to school so that I could go out and work. We existed on what was called back then the ‘Sole Parents’ Pension’ of around 18K/year, plus intermittent child support when the Child Support agency would catch up with my ex.

With 4 children, going back to work wasn’t a financial option. The daycare fees would have wiped out my wage. So the boys lived in an ultra-frugal house for years. My priority was security for the boys, so the mortgage, food and bills were always paid. Then any extras would come out of what was left.

So what has Evan22 done with all of this?

He’s actually done pretty darned well so far. When he finished secondary school he was adamant that he didn’t want to go on to further education. He took a gap year, where he worked part-time in a fruit shop around the corner and dabbled on various writing and film projects. He couldn’t get any Centrelink allowances because at his age, they take his parents’ income into consideration and I earn too much.

Then the gap year turned into 2… then 3. About 18 months after he finished school, I moved out of the house we were living in and went to live in The Best House in Melbourne, while Evan20 stayed behind in the old place. He got some roommates in and they all paid rent.

He was never late in the rent. He worked and paid his own way. Sure, the garden looked like the place was haunted and they weren’t the cleanest tenants a landlord ever had, but he was supporting himself and hey- the house was going to be knocked down anyway!

In his third gap year, he left the fruit shop and took an office job with a couple of his high school friends. Unbeknownst to me, he’d already decided that he wanted to do an acting course. Unfortunately, that realisation hit him AFTER auditions for the following year were over. So he decided to get a job that actually paid fairly decent money and start to save.

Most acting courses worth their salt are either interstate or in the country. There was one – at the Vic College of the Arts – that if he got in, he could live at home and take the train in each morning. But he knew he’d better not bank on that one. He saved up around 15K over that year he worked in the office job, quietly salting it away for what may come in the next year.

Meanwhile, the house was sold and he moved back in with us. He still kept going to work, saving and still having fun. Towards the end of that year, (2017), he casually said, “Hey Mum, can you help me with some audition pieces? I’m going to try for Acting for next year.”

When he was accepted into a really terrific course in rural Victoria, I was worried about the expense of housing him. But, as you already know, he already had that covered. He was determined not to ask me for money for it, so he paid for his first year of accommodation. Towards the end of that year, he had a birthday and he knew the mature-aged student allowance from Centrelink would kick in, enabling him to pay rent for the next 2 years. He’d quietly worked it all out and then took the steps to make sure it would all come together.

All of my children have grown up to be very debt-averse. None of them have credit cards and the only person they borrow money from is The Bank of Mum if their car blows up or something. (They appreciate the interest-free component. And they always pay me back.) But Evan22 wasn’t comfortable borrowing 5 figures from me, so he worked out a way to cover it himself. I’m incredibly proud of him for that. I think it shows maturity beyond his years.

But what about the rest of his expences? Is he incredibly frugal, spending money only on essentials?

Well, if you consider buying 5 copies of the same vinyl album of his favourite band because it came in 5 different colours frugal… then yes! He seems to go out to breakfast a lot, so I’d say there’s plenty of smashed avocado in his life. When he drinks it’s not beer or wine, but vodka and whiskey. He’s a vegetarian, so his groceries are probably less than if he was a meat eater, though having said that, have you seen the cost of chia seeds lately???

He spends very little on clothes. They’re just not that important to him. I think he’s learned by living with me that it’s smarter to spend on the things that HE values, not what society/his peers/his mother tell him to spend his money on. He follows his own heart.

When we finished moving in I took him out to lunch. He’s an independent guy – I asked if he wanted to swing by the supermarket on the way back to The Playboy Mansion to stock up his new kitchen. I was paying, of course.

“No thanks, Mum, ” he said. “I’ve got plenty of food left over from Res.”

In the whole year he’s been living up there, he hasn’t put a hand out for money once. Not once. I haven’t offered, because I was curious to see how it would pan out. I’m very proud of how he’s learned to organise his money and pay his way.

On the way up to Ballarat, we went via IKEA, where I bought him a Queen-sized bed with all the trimmings, plus a few other odds and ends that he needed. He thinks that the extra things are coming out of his Christmas money. (I give every boy up to the age of 25 a $300 voucher for Christmas. They use it for clothes, usually.) He’ll be expecting a voucher for about $50.

But he’ll be getting the full $300. I think he’s earned it.

I’ve said it before, but I’m very proud and impressed by how well Evan22 has stepped out into the world and has started to navigate himself with his finances. He’s clearly observed and internalised the “stay out of debt’ and ‘make sure there’s more money than month’ rules that I’ve lived my life by.

The next step is to teach him about compounding and investing. Considering that he’s moving into a notoriously unstable field of work, he’ll need his money to be working hard for him. However, judging by how he’s travelled so far, I think he’ll be able to listen and learn.

So far anyway, he’s behaving with money pretty much as you’d want a second-generation FIRE kid to be. Ok, so he’s not doing an engineering degree or living at home and biking to the local university to save money, but all in all, his attitude towards his finances seems to have a solid bedrock upon which to build.

Anyway, this is how a second-gen FIRE kid is behaving in his early 20’s. He learned frugality and delayed gratification at my feet, but I didn’t start learning about investing, compounding and FIRE until he was in his late teens. Imagine what the children of younger FIRE parents will be absorbing as they grow?

The sky’s the limit…