First Person: Spend Now or Leave an Inheritance Later

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I would love to leave our kids a nice inheritance…then there's reality. It's not that we're bad savers or don't plan for the future, but I don't see us leaving the Vanderbilt family fortune behind when we pass away; and would we want to anyway?

What's the point in working to amass some savings only to give it away…even if it is to our kids. And while I'm sure they would like a little something left to them when we die, knowing that they're coming into money could leave them less than motivated to make their own way in life. Therefore, it's kind of a dilemma. Do we spend what we have now while we're able to or do we hoard our money like misers to pass along to our kids one day?

Spending Now

I've seen first hand through other family members what can happen when parents lavish a bit too much financial attention on their children. While it can seem like a nice thing to do to help kids out in the short term by doing things like bailing them out of financial issues when they encounter them, paying their car insurance, letting them live at home until they're almost 30, buying vehicles for them, and providing similar assistance, it can actually end up hurting the kids over the longer term.

Such actions can build financial dependence upon the parents and decrease the ability of the kids to function financially on their own and eventually become self-sufficient. At the same time, spending this money on them now, when they're not yet fully independent and haven't built their own financial education, might leave them with little money later on as an inheritance with which to actually live a life of their own once we pass away and the kids are left on their own.

Scrimp and Save to Leave for Later

On the other hand, I don't want to scrimp and save all our money in an effort to build a hefty inheritance for the kids while depriving them of any fun in the near term. Taking those annual family vacations, making plans for dinners out, taking trips to the zoo, or going go-karting are things that we love to do as a family. And while they don't have to be constant items in our family budget, they are things that we like to set aside money to do and to enjoy. I mean, in my opinion, what's the point of having kids and a family if we're not going to enjoy doing things together?

And while we have fun with events like family game night for watching movies at home together, we also want to build other family memories that might cost a little money from time to time. At the same time, I want our kids to experience these things for their own knowledge so that as they grow, they can make decisions as to how they'd like to live their own independent lives or lives with their own families.

Teach, Train, Save, and Spend

Therefore, I think there has to be a good melding of both saving and spending upon our children so that they get to enjoy life in the present, but are left with some hope of an inheritance upon our passing. In the process, we hope to train our children through things like explaining our financial actions and the costs of the things we do, taking them with us to the bank and the store, and working to further their financial education in general without making a big deal out of it.

If we can raise our kids with common financial sense, while at the same time exposing them to a variety of people, places and experiences, we will hopefully have children that can better make decisions as to how they'd like to spend their -- as well as our money -- not only once we die, but as a family unit as well.

Personally, I was financially educated at a young age and helped my mother save money even as a teen by not asking for certain things my friends had or reminding her that we should be saving money when she wanted to spend frivolously. Kids can be quite money savvy and even enjoy sharing financial responsibility with parents as I did, and this can make them more independent adults as they grow.

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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.


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