top of page

Why Your Kids Need To 'Feel Poor' To Become Wealthy Kids

I hope you read this blog to the end. I’m hearing an increasing number of stories about adults who are in financial trouble and struggling to take the right actions to get out of the situation. This isn’t due to them being ‘stupid’, it’s because getting into financial trouble is easy and getting out of it is hard.

We need to make sure that kids grow up looking after their money so they don’t get into these situations to start with. This means they have to appreciate that they will ‘feel poor’ when they are younger.

‘Poor’ is a relative concept

When we say poor, most people might define it as someone who has very little money and is struggling to pay their bills. You might think of homeless people. No one wants to be poor.

Homeless person receiving money

Whilst this is true, for most people, the feeling of being poor is relative.

I remember being 3 years into my graduate job and earning OK money. I certainly ate in nicer places than when I was at university. Then my wife (girlfriend at the time) and I got invited to a dinner party at a restaurant in central London by some former work colleagues (who were several years older and more senior than us). I remember looking at the menu and then looking at my wife. She was as shocked as me but gave me that ‘Play it cool!’ look. Despite having money, at that point, we felt poor.

Unfortunately, we live in a world where people spend a lot and compare themselves to others, and as a result, most people feel poor. Especially nowadays as people don't just compare themselves to their friends and relatives but to everyone on social media.

Kids Have To Choose When To Feel Poor

Essentially, we need to teach our kids that they will have to ‘feel poor’ at some point in their life. They have two choices:

  1. Live below your means, save/invest some money for the future and accept that you may ‘feel poor’ relative to those who are spending all their money.

  2. Spend all their money so they don’t feel poor in the short-term but feel poor later if circumstances change or when they realise they have to work forever.

Sadly, most people choose the second option

As people have earned more, they have started to spend more. Essentially, no one wants to 'feel poor', so they choose the option that avoids that feeling.

The issue is that this option means these people do not build up savings and investments along the way. Then something bad happens like mortgage rates suddenly going up (as we’ve seen in many places around the world).

The other situation is that people believe they will earn more in the future and start spending more than they have and get into lots of debt. After a while, they realise that their debt is getting bigger and bigger and that they need to take action.

In both of these scenarios, the correct action is to ‘start spending less’!

This is a massive issue as these people don’t want to spend less. It hurts their pride too much to tell people they can’t spend as much as they don’t have any money.

“Why can’t you come to the fancy restaurant tonight? You’re rich, you drive a BMW”

It takes such a large amount of self-esteem to tell others:

"I don’t have as much money as I’ve made you think I have"

We’ve probably all got a friend or relative who we know needs to accept that they need to change their lifestyle to save money but refuses to do so as they are too proud.

One of the hardest challenges is to start living without the luxuries that you’ve become used to. Shopping at a less expensive supermarket or selling your car which everyone had admired for something more affordable. It will be a painful withdrawal.

As a result, people may suffer in silence and hope it goes away. In many cases, they may borrow more at higher rates to keep up the image that they have money.

Money Causing Family Conflicts

Another alternative is that they come to you (their parents) and ask for financial help. You have a couple of choices:

  • Make them happy by giving them some money – from your savings – and hope they change their lifestyle

  • Risk a family conflict by denying them money and encouraging them to change their spending habits

This is a horrible situation to be in. Essentially, you risk your savings or risk a family conflict. No parent wants that.

Maybe they’ll get lucky and win the lottery (please read my last blog to ensure that your kids don’t waste their money on the lottery: Teaching your kids about the Lottery).

How To Raise Wealthy Kids?

We should want our kids to live a lifestyle they can sustain even if this makes them ‘feel poor’ relative to their friends and peers who are spending all their money whilst they are young.

Whilst we don’t want our kids to ‘feel poor’, this is such a better scenario than them living above their means and then having to change their lifestyle later in life. The feeling of being poor when changing their lifestyle will be many times more painful.

This will be even more painful when they hear about their friend who they thought was ‘poor’ (relatively) and has lots of money as their savings/investments have been growing over all those years.

Quote about being rich vs being poor

Helping Kids Manage ‘Feeling Poor’

See luxuries as an experience, not a lifestyle

I recently heard a quote from the 1910s, which was mentioned on the Banking On Girls Podcast, which I liked on this topic:

“I don’t want to smoke a 4-cent cigar as I might lose the taste for the 1-cent cigars that I’m perfectly happy with right now” (4 cents was worth a lot more in the 1910s).

Does this mean we shouldn’t experience luxuries? I don’t believe so, however, we have to be aware of the potential downsides. The Diderot Effect, buying one expensive item which leads to buying more, is one of the main reasons people get into financial trouble to start with.

To teach your kids more about this, you can read ‘How to teach your kids about the Diderot Effect

The key is to see luxuries as an ‘experience’ rather than a ‘lifestyle’. We’ve eaten at some amazing restaurants but only do this on rare occasions. This means we don’t overspend and we enjoy it more when we do go to these restaurants.

If you are wealthy yourself, you must teach your kids about money and ensure that they realise that you are giving them ‘experiences of luxuries’. Many kids who grow up in wealthy families struggle with money later in life as they find it hard when they can’t maintain the standard of living they are used to when they are growing up.

You can read more about this in my blog: Why I feel sorry for the Rich Kids

Experience ‘being poor’

One of the best ways to feel less poor is to be grateful for the money you have.

I’ve heard some amazing stories of wealthy families sending their older kids on trips with very limited money. These kids come back with a new appreciation for what they have, especially if their trip is to a place which is less developed.

Also, those who work with charities have less of a sense of ‘feeling poor’ as they are grateful for what they do have.

As your kids grow up, consider ways in which you can help them appreciate what they have. Not just relative to friends and family but the world at large.

If you have any other suggestions to help kids manage 'feeling poor', please let us know in the comments.

Before you finish reading this blog, I have a favour to ask...

Does your company have a Parents Network? We've had the privilege of hosting workshops on 'How To Teach Your Kids About Money' for companies like Amazon, HSBC, Nomura, Aon, and more. If your organization has a parent network, we'd be delighted if you could spread the word about this workshop.

As a token of our appreciation, we're offering a £100 ($120) referral bonus to you if your company enrols in the program.

For more information and a brochure to share with your company, please click here


Whilst I want all kids to grow up following the 3 Rules of Wealth (money), it’s also important they appreciate that by following these rules, they might ‘feel poor’ relative to their friends who don’t and spend all their money whilst they are young.

We need to train our kids to be ready for this so they continue to take the right actions with their money. Help them see the benefits and the potential challenges if they don’t.

This isn’t only important for your kids, teaching your kids about money also helps avoid future family conflicts or your kids eating into your retirement savings later in life!

As a reminder, the 3 Rules of Wealth:

  • Spend less than you receive

  • Invest what you save

  • Be patient

To help your kids learn these 3 Rules of Wealth using fun/memorable stories, grab them a copy of Grandpa’s Fortune Fables.

If your kids do follow these 3 Rules of Wealth, they might ‘feel poor’ when they are young but I’m very confident they won’t feel like as they see their money growing and start to become wealthy kids.

New Content Coming Soon: Make sure you subscribe (see footer), you'll also be able to download the FREE Money Tracker for Kids!

Thanks for reading!


p.s., The stories in Grandpa’s Fortune Fables highlight some of the feelings about being poor and rich, whilst also helping kids learn the 3 Rules of Wealth. The book is available on Amazon or buy here as part of our Special Bundle Offer (Book, Games, Online Course and Money Tracker for Kids)

Book cover for children's book about money


bottom of page