Inheritance in Contemporary America: The Social Dimensions of Giving across Generations

• 5 Money Memories
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• Johns Hopkins University Press
• pp. 58-76
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CHAPTER FIVE

Money Memories

Narratives of the Meaning of Giving and Receiving

Real generosity toward the future lies in giving all to the present.

—Albert Camus (1913–1960)

Over the past ten years, I have spoken to hundreds of people about their attitudes toward gift giving and family inheritance. In these casual conversations I have found that even individuals close to me often have a trying time expressing their feelings. It seems that articulating any opinion—strong, weak, or neutral—on matters of family finances is difficult. Money is a sensitive topic, and most researchers, including government census officials, recognize that great care has to be taken in asking questions related to a person’s income and assets. For most American families, no matter what their social stratum, discussing money matters is uncomfortable. Money is a topic that parents seldom openly discuss with children, during their early life experiences and even later, once they leave the household. Nothing lays bare feelings or creates bitter acrimony as fast as discussing monetary obligations and expectations.

HISTORY LESSONS

This discomfort respondents felt toward discussing money transcends the generations discussed here: the Silent Generation, the Baby Boomers, and, to a lesser extent, Generations X and Y. Indeed, the era when respondents grew up overarches the entire discussion of attitudes toward money. In this study, the participants fell mainly into two generations: The Silent Generation and the Baby Boomers. Each generation has its own opinions on money, family, and inheritance, often based on how they were raised. Family and social expectations with respect to money are often shared between the generations but they have a few key differences. To fully appreciate the viewpoints expressed in the interviews, an overview of each generation is needed.

I should note that some critics may view my characterizations of the Silent Generation, Baby Boomers, and Gens X and Y as too broad to be very meaningful, especially given that there is so much diversity within these age categories. Although this criticism has validity, in that it may be hard to see evidence of unique distinctions among these birth cohorts’ thinking about money, what is abundantly clear from the data analyses that follow is the general age-graded influences on perceptions of wealth by aged parents and adult offspring. The bottom line is that money is earned twice; once by the Silent Generation and then by their heirs.

There is no doubt that the experiences and demographic characteristics of the cohorts of principal interest—Baby Boomer and Silent generations—differ not only from those of previous generations, but also from each other (Hess and Waring, 1978). This intercohort differentiation could affect how certain groups within birth cohorts interpret their money memories and, in turn, their expectations of inheritance.

THE SILENT GENERATION

For many older Americans, the Great Depression had a permanent impact on the way they handle their finances. That life-altering period, when almost one-quarter of working-age adults were unemployed and thousands of banks closed, gave rise to massive feelings of insecurity and a grassroots movement in support of an old-age pension. Before the landmark social insurance legislation proposed by President Roosevelt, senior advocacy organizations, such as the Townsendites, sought support for proposals to offer relief to elderly Americans (Amenta, 2006). Sufficient support was not obtained for a plan which would have provided a pension worth $200 per month to every retiree age 60 or older (Mitchell, 2000). Nonetheless, this movement created a powerful force in both state and national politics and contributed to the birth of the Social Security Act in 1935. If it had not been for the aging-advocacy groups, such as the Townsend movement, middle-class Americans might not feel the way they do today about their financial security.

These elders, dubbed the “Silent Generation,” were born between 1925 and 1942 and witnessed how the absence of money can affect lives. There was not a family in America that was not affected by the Depression, in one way or another. Although they were quite young during this time, the Silents were taught or came to understand that money is never to be taken for granted. If there was money in the house, it was used to buy basic needs.

As the narratives here will indicate, most of this generation defines basic needs as food, shelter, and practical clothing. This is because they lived through a common experience of being or knowing of persons who lacked these necessities. The collective experience left indelible marks on their attitudes toward money, and also on the expectations of family.

Once the Depression was over, this generation wasted no time in reflection or self-pity. They took full advantage of governmental programs and economic growth to amass the largest amounts of assets America has ever seen, and will likely see again for some time if ever. This generation learned from the past, worked hard, and avoided debt and risk. They practiced self-sacrifice, frugality, and observed family obligations. Characteristically, many Silent Generation members feel guilty for the good fortune they now enjoy. They make amends by donating to charities or helping family members who are less fortunate. To them, much was given and therefore much is expected. This attitude holds for their own children as well. Good behavior is rewarded, bad behavior is not. Defining “bad” or “good” behavior is quite often a function of generational definitions and experiences.

Unfortunately, today, after a lifetime of saving, scrimping, and investing, many in this generation find themselves in the unlikely position of dipping into their principal to pay for health care for themselves or to support someone they love.

BABY BOOMERS

While the Silent Generation’s offspring, the Baby Boomers, did not undergo the life-altering historical experiences associated with the stock market crash of 1929, they share similar attitudes and behaviors toward giving and receiving gifts. Born between 1946 and 1964, Baby Boomers experienced ghosts of the Depression. Their parents hung on to the hard-won lessons of the Depression but could not deny their children the luxuries that they themselves were not able to enjoy as children. Consequently, the Baby Boomers could be considered the “spoiled children” of the Silent Generation. They tend to indulge themselves as well as their own children. They do not mind risky investments or going into debt. They came of age in the rebellious “Me First” ’60s and ’70s, when anything traditional was scoffed at, along with family obligations. Baby Boomers practiced a dual-track life: they supported large-scale social causes, such as feminism, ending racism, and mitigating unilateralism, while they practiced personal discovery and bent the social rules.

Although few of their parents would consider divorce, Baby Boomers embraced it as a means to personal freedom, often ignoring the social and financial consequences to their own children. Ironically, what Hughes and O’Rand (2004) observe is that the children of Baby Boomers, the so-called Generations X and Y, are quite averse to making frivolous social or personal commitments.

While much has been written maligning Baby Boomers, Hughes and O’Rand argue that it was a pivotal generation. Its members were born into a nation transformed by four years of war, and as their lives unfolded they experienced social change and responded by creating new lifestyles that set the patterns for later generations.

As the oldest Baby Boomers begin turning 60 in 2006, their future will largely be determined by what they have achieved financially. Much of what occurs in the throes of midlife will influence self-support in old age. Compared with their parents, this generation will enjoy good physical and mental health; but it has greater intragroup income inequality, according to Hughes and O’Rand (2004). One of the main reasons for this is that Baby Boomers are more likely to experience marital and work disruptions. As Baby Boomers age, they will also be more likely than their parents to divorce, remarry, and start a new family. Serial monogamy brings a whole new set of financial obligations to both men and women. Even without marital disruption, Baby Boomers may need to rethink their employment trajectory, given that it will cost more to pay for a child’s college education and to help with a child’s purchase of a first home than it did when their parents were making these expenditures.

Depending on personal and family expenses, wealth inequality among Baby Boomers could widen, particularly among the daughters of the middle class if marriages and work experiences fail. Divorced women without alimony and a good job history may be thrust into the low-wage service sector to make ends meet and may have little savings left over to invest in a retirement or to give their adult children (Hughes and O’Rand, 2004). A bout of disabling illness could turn into a major financial crisis without adequate disability or medical insurance. Whether mothers in this cohort will be able to turn to their children for economic support is unknown. What is clear, though, is that the breadwinner in American families like those consisting of widowed grandmother, divorced adult daughter, and grandchild may experience a midlife financial squeeze in which financial needs exceed capacity, and that earner will be unable to help her or his parent or child. This income insufficiency scenario could extend to older ages, resulting in fewer financial gifts and wealth passed on to children.

EXPANDING OBLIGATIONS EQUAL SHRINKING INHERITANCES

Even as one generation is tied to the other, the differences in social and familial expectations can be quite large and have lasting impacts. While the parental roles and responsibilities toward rearing a child legally end at age 18, the transmission of gifts and inheritance continues long after the child has become a grown adult (Hogan, Eggebeen, and Clogg, 1993).

Bequeathing one’s estate, no matter how small, is an act of familial affirmation. It signifies love and respect for the recipients. Likewise, when inheritance is withheld because a violation of a family norm has occurred, it is as if the deceased is shunning the one who caused displeasure or shame.

Even so, outside forces sometimes wreak havoc on an elder’s desire or ability to leave any estate at all. There are three fundamental challenges to bequeathing inheritances today. These are (1) a shrinking inheritance fund as seniors find their assets reduced by debt, bad investments, family obligations, health care costs, or a desire to fulfill personal goals; (2) poor inheritance planning that leaves inadequate or no instructions; and (3) family conflict and disagreements.

While routine gifts involving money during a person’s lifetime may be a sticky issue, disagreements over inheritances, whether they become known before or after a loved one’s death, can be heartbreaking. People often are not advised about the best way to transmit their wealth to their heirs. Disputes can result in a permanent schism among siblings and create ill will in other family members. As discussed in Chapter 1, the problem of how an older parent intends to pass down his or her assets will increasingly become a sensitive issue, for Boomers’ parents are expected to bequeath several trillion dollars over the coming decades. And even though the percentage of Baby Boomers who report that they received inheritance money has remained relatively stable in recent years, fewer expect it in the future. Federal Reserve analyses of the Survey of Consumer Finances between 1989 and 1998 show that the proportion of general wealth transfers declined from 23.1 percent to 20.3 percent of U.S. households (Wolff, 2003). Employing the Federal Reserve data, researchers found that about 18 percent of children born between 1946 and 1964 reported receiving an inheritance in 2004 (AARP, 2005); the median amount was $48,000 The most likely Baby Boomers in this situation were already financially secure, defined in terms of Baby Boomer households with net worth of at least $140,000. The average amount of inheritance received by these Baby Boomer families was approximately $47,909 (Gist, 2006).

Changing expectations about whether inheritance will play a large role in retirement security rest on the assumption that Depression era parents will be living longer and needing to spend more money to support themselves, both physically and financially, in old age. To be sure, Gist and Figueiredo (2006) found in a recent survey that almost one-half (46%) of older adults interviewed stated that they felt it was important to leave an inheritance or legacy to their children, yet the majority of the Silent Generation’s children are expected to make it on their own financially and not to count on receiving any inheritance. Gist’s 2006 survey also reveals that about one in four respondents predicts the next generation will be worse off in retirement than they are today. Although many Baby Boomers will not count on an inheritance because they state they prefer it that way, others may not be so lucky as not to need an inheritance. Current declines in private pension coverage and the general lack of retirement financing could spell trouble on the horizon.

In addition, those who expect to leave an estate are leaving less than they had expected to (Gokhale and Kotlikoff, 2000). Likewise, the proportion of elderly people who believe it is important to leave an estate to a child after their death declined from 55.5 percent in 1992 to 46.8 percent in 1998 (AARP, 1999). Many older parents are instead drawing down their capital and passing on their wealth before their death, making an inter vivos transfer to their children or are having to spend it on their health care or on amenities before they die (McGarry and Schoeni, 1997). This last scenario is remarkable, given the Silent Generation’s general intense desire to avoid debt and to help their children. This trend, known as “drawing down” or “dissaving,” seems to occur in specific socioeconomic groups, according to research. These groups are discussed in the following sections.

DRAWING DOWN ASSETS

For Michael Hurd (2003), the question is whether elderly people draw down their assets before they die accidentally or intentionally. What he finds is that elderly people, regardless of the number of children, are experiencing accidental or unplanned bequests. Very wealthy people have operative bequest motives. Abel (2003) concurs with this finding and contends that, in addition to any saving for the purpose of making bequests, elderly consumers may hold precautionary savings to guard against the risk of having to incur large medical or personal care expenditures later in life. Others report similar findings (e.g., Hubbard, Skinner, and Zeldes, 1995).

Part of what may be occurring is the well-established family belief by parents that they will continue to fend for themselves and will assist their children until such time as they can no longer financially or physically do so. At that time, it becomes the children’s turn to care for the parent. Under the current demographic regime, however, these familial expectations may undermine the moral obligation of caring for loved ones when they are incapacitated or as they experience a changing need for assistance.

While elderly people with children may be able to engage in informal inter-generational intrafamily risk sharing, elderly people without children may not have access to such risk-sharing arrangements and thus would require larger precautionary savings than those with children. In other words, parents have made an emotional and financial investment in their children and if a major need arises in which they, the parents, need help, they are most likely receiving it. Elderly people without children or some other support network are more likely to have to purchase assistance at the end of their lives; therefore they are less likely to engage in bequests.

DECIDING TOO LATE OR NOT AT ALL

While most older Americans want to bequeath at least a portion of their assets, many families are unfamiliar with making decisions related to family finances during the post-retirement years. They do not know the fundamentals about family economics and are unprepared to make decisions that can affect the quality of family life. Basic questions about how they are going to pass down their assets and why go unanswered. Adult children often do not know the role they are expected to play in maintaining the family’s values and in managing their inheritance (Gokhale and Kotlikoff, 2000).

Likewise, only seven out of every ten elderly Americans die having written a will, and even when they have done so, mistakes have sometimes been made (Stephenson, 1996). There is conventional wisdom that siblings will know what to expect and what to do and that the executor of the will is up to the task because the majority of bequests will simply be shared equally among the children (Cox, 2003). This belief is often not accurate.

FAMILY DISAGREEMENTS

Perhaps the factor that has the largest impact on bequests and inheritances is family disagreements. As shown in the narratives that follow, family disagreements can occur at any life stage and for various reasons. Many times, the major differences between the generations are highlighted when it comes time to decide who gets what and when. This can happen after a benefactor dies but also before, when inter vivos transfers are made.

During life, offspring whose behavior is not approved of or appreciated can usually fend off oral criticism from a parent, but when a will is read, the withholding of funds or assets is a final judgment.

BACKGROUND ON THE INTERVIEWS

In this chapter, I explore a broad range of financial matters with people from all walks of life and from various social strata. To do this, in-depth interviews were conducted to get a better idea of how people felt about gift giving and passing on wealth to future generations. Data were compiled from more than 1,000 hours of transcribed interviews that took place in the course of 2001 and 2002. To protect the identity and maintain the anonymity of my subjects, I refer to them only by first name. Appendix A provides a detailed description of the data and methodology of data collection and analysis. The information provides a deeply textured description of the role of material exchanges in defining the moral tie between generations. Also toward that end, the chapter addresses filial expectations concerning who should give what to whom in adult child–parent relationships and how feelings of obligation may change as people age.

Certain patterns emerged from the data collected during the interviews. While everyone’s story differed in the details, the overall effects that money had on the interviewees and their families during childhood were, relatively speaking, the same. For those growing up during the Depression era, money was absolutely necessary for security and there was no free lunch. These people almost always held firmly to the connection between money and work. They would save money to purchase presents for family members, not buy them with credit. While the evidence revealed times in which economic hardship occurred during childhood years, this hardship did not, at least as self-reported, seem to undermine the quality of intergenerational relationships. Arguably, this could be a matter of selective memory and the desire to forget any painful times. Throughout the interview, respondents clearly personified an overwhelming focus on other meaningful dimensions of family life, ones not directly tied to financial aspects of gift giving.

What follows, then, are excerpts from and analyses of biographical narratives which describe symbolic aspects of the meaning attached to gift giving from the perspective of both the parent and the adult child. The analyses highlight the centrality of family ideology, which I define as the values, beliefs, and attitudes of adult children and their elderly parents, to investigate directly the ways in which individuals make sense of who owes what to whom and what is involved in expectations regarding reciprocity or gifts and bequests. Personal interviews of elderly parents are a valuable qualitative research technique for revealing the challenges they face with end-of-life planning decisions. Because it is hard to talk about money, it was difficult to discuss certain events. Even in times of trouble, the focus was not on financial crises. Many of the recollections provide a nuanced framework of what makes up a family ideology.

To glean the factors most affecting the dynamics of the way gifts and inheritance are perceived in the family, the interview covered both the positive and negative lessons learned growing up and how the family dynamic operated currently. In many cases, the narratives of gift giving personify the core connection to major social institutions and other social structures, like age relations. For example, members of the Episcopal denomination displayed a Protestant work ethic and a strong connection to the church. Guilty feelings about spending too much money were often revealed. Many active churchgoers felt that they were not pleasing God if they were spending too much on themselves. Living simply so that others might simply live was a recurring concept. The Silent Generation benefited greatly from the economic expansion following World War II, and they display attitudes entirely different from those of later birth cohorts, due to their traumatic experiences witnessing the failure of banks and family businesses. For this reason, members of the Silent Generation, having grown up with few pleasures in tumultuous times, tend to be cautious and conservative in all aspects of their lives (Torres-Gil, 1992). The qualitative evidence will reveal that self-reliance is a defining characteristic of the Silent Generation. Consequently, many individuals from this cohort have trouble spending money on themselves. Conversely, a 1998 AARP survey of members of the Baby Boom Generation showed that one-third expect a comfortable retirement and less than one-quarter of respondents believe that they will struggle to make ends meet. Although Baby Boomers on the verge of retirement are not a monolithic group, what these data underscore is that they embody characteristics of self-reliance, independence, and indulgence (AARP, 1999). In many ways, these two generations express different expectations toward spending and saving for their own children and other needs of daily life.

How do families transfer wealth and knowledge from one generation to the next? What forms do inter vivos transfers take today versus in the past? How have changing definitions of family changed the way wealth is transferred? The interviews were revealing on these topics. Although most respondents were wary of discussing personal financial situations, their own family situations pointed to certain constants in this sensitive topic.

EARLY BEGINNINGS OF FAMILY DYNAMICS AND MONEY

Nothing to do with money is taken for granted by those who grew up during the Great Depression. The prevailing attitude among them is one of caution and care when it comes to money. Credit, debt, and risky investments are to be avoided and, interestingly, so are family members who do not appear to be well grounded or frugal.

As we will see in Chapter 6, these sentiments transcend these persons’ ideals of how much to give to their own children and how much to save for retirement. For respondents in their late thirties, forties, and fifties, memories involved with giving or receiving money were very positive. The values ascribed by adults of the Depression era, one of which was “try to live within your means,” appear to have been passed on to their children. If there was something the child wanted, then the child needed to save for it. Bills and basic living expenses come first, and then if money is left over, one can have fun. Arguably, the latter expectation is consistent with conventional wisdom. Even so, the Baby Boomer generation has been portrayed by the media as more self-indulgent than their parents’ generation (AARP, 1999). These narratives suggest otherwise, however.

MONEY AS A GIFT

What we have learned thus far is that a confluence of factors affects attitudes toward family wealth and retirement, including demographic characteristics, economic constraints, and generational beliefs or preferences. The quality of family relations is defined in terms of the degree to which family members report feeling close to each other, a term often labeled as “filial affinity” and which is discussed in Chapter 4.

Family ideology is a value or belief shared by kin that influences the choice of giving or not giving, making it consistent with the family’s norms and obligations. Expectations in inter vivos transfers and inheritance, on the other hand, refer to a financial act or an exchange that is likely to happen. To develop a deeper understanding of how family values or ideology and expectations interact with generational effects, interviewees were first asked about the types of gifts their parents gave them when they were growing up. Holidays were special occasions, and the gift exchange reinforced the occasion’s significance in the interviewees’ recollections. Respondents, male and female and of all ethnic groups, repeatedly spoke about the presents they received for Christmas and birthdays. They emphasized the unpractical nature of gifts when they were younger, such as candy, and the practical things, such as clothes for special occasions, when they reached adolescence. Steve, an older man who grew up in a divorced family on a farm in Georgia, vividly remembered that his Christmas stockings were filled with hard candy, nuts, and oranges. He recalled that when he was eight years old, he and his siblings got a traditional model Lionel train. By the time he reached seventh grade his father splurged for a bicycle, so he could ride to school and sell newspapers on weekends.

Gifts of money came later on in a child’s life, when personal needs were greater. Early on, toys and small presents were mentioned by respondents across all social classes and in low-, middle-, and upper-income households. David, a Baby Boomer in his late forties, recalled that birthdays were special days in his family. “When we were young, I wanted a Snoopy watch, and I received it. If I wanted a big ticket item I wouldn’t get it.” As David grew, money became the primary gift for birthdays. “As an adult, I got one dollar for each year of my age.” Money was also used as an equalizer in his family. “My maternal grandmother had a set limit that she would give, although she would give a little more to my brother because she felt he was slighted by my mother.” The practical nature of gifts continued when David went away to college. Indeed, the concept that special events had budgets was illustrated this way. “When I needed a typewriter for college, I got to choose one for my birthday and Christmas.” While the typewriter exceeded the budget for one occasion, because it was a practical gift, his family allowed it to serve as the main gift for two occasions.

James grew up in an economically advantaged family, and their material exchanges were closely tied to that wealth. “Waking up on Christmas mornings, I received everything I had asked for. For birthdays I received chemistry sets and erector sets. They were not cheap toys.”

For others, material gifts did not play an important part at any point in their lives. This was a result of financial pressure or religious beliefs. Jack stated, “The main gift I received from my parents was from my mother. It was a spiritual gift. My mother felt it was necessary to believe in the power of prayer and the need to establish a close relationship with God and Jesus Christ. And to stay in a place where you could live in such a way where you wouldn’t have to face the temptations. Enjoy life, but you don’t answer to me, but to Jesus. It was a defining thing in my life. My grandmother was also influential in passing this along. My dad, a machinist, worked many long hours, and gave me fishing trips.” A respondent in her seventies fondly recalled: “I was a happy child but we didn’t have a whole lot of money. We went to church, and my parents took me places. Some of my friends had more belongings than I did, but it didn’t matter.” Bill, who grew up in a poor rural area, said, “I would define gifts as education, strong faith, and stability. Education was important to me when I was growing up because my father and mother were farmers and had no formal education.”

While money may not have been exchanged directly, many positive lessons about money were learned during childhood. Middle-class values regarding money were frequently mentioned. For example, Karl, the parent of a Baby Boomer, learned the following principle, which guides his life today, namely, to develop the self-discipline to spend only when you need to and to know the difference between necessity (including education) and amenities.

Growing up during the Depression also influenced opinions. Elderly parents felt that no matter how much or little they had, they were taught by their mothers and fathers to save as much as possible. Going into debt was wrong, and spending was to be done very frugally. Although money was tight, these respondents reported that they never felt deprived. Alice commented that being frugal was a way of life. “My mother taught me that money was important and you had to buy just the essential things. My mother took in a lot of hobos, she never turned away anyone. When there are 10 to 15 people to feed, money is tight when you have only $20 dollars. We ate leftovers. She didn’t throw out anything. We never went hungry and were always clean. We didn’t have bathroom facilities until I was a junior in college, which we managed to pay for with student loans and summer jobs.”

Steve had strong feelings that influenced his childrearing practices: “We didn’t have a lot, especially when we were very young. I learned to be frugal, to live within my means, don’t waste anything. When other kids were begging their parents for money, I always had a little change in my pocket. My parents never had to buy my clothes for me after I turned 12. My kids called me a tightwad. I didn’t give them a lot of spending money, only their allowance.”

An adult child of parents who were devout Methodists espoused traditional conservative beliefs about spending and saving, that money was not easily come by, that one had to work hard for it, and that delayed gratification paid off. Nonetheless, he and his siblings did not always abide by these guiding principles. As Jack explained: “My dad was a business manager and reconciled my bank book. He didn’t place a lot of personal value on money, but would help others with money problems. My mother on the other hand, was financially illiterate, and was a clothes hound. She was a little more extravagant and had expensive tastes. From my parents, I was taught to be moderate, to value quality in items, to be practical, and balanced. I did learn, too, that money was not made out of cotton and to not spend too much. I was always scolded for spending too much of my allowance.”

On the other hand, another man stated: “I didn’t learn to save and to be frugal. If you are smart and well educated you should be able to make a lot of money. I was not taught how to spend. My mother did not work and she spent too much money. My father had trouble handling money, and projected arrogance toward it.”

MONEY WITH STRINGS ATTACHED

Weekly chores, good grades, and other behaviors were often attached to receiving an allowance. The amount was usually tied to the activity’s perceived value. One gentleman described it this way: “We had a fairly modest allowance. Ten cents per grade paid weekly, with quarterly extras, like for clothing. This started around 10 or 12 years. On report card times, regardless, we got something. One-third of our money went to God, one-third was spent on things, one-third was saved.” Sometimes the payment calculation was well established. The following example from a woman in her midthirties illustrates this: “I got allowance for doing various chores, for example, doing dishes. My father would pay for grades, every six weeks. Five dollars for every A, four dollars for every B, and three dollars for every C. If I got lousy grades, he wouldn’t give me anything.”

Very often these arrangements persisted into the teenage years. Stan stated: “They gave me money every week, probably 50 cents a week. For a quarter, we could buy a Coke, movie, popcorn, and a bus ride. During my adolescence I received more, I didn’t work until I started teaching school. I also had chores but they were independent of my allowance. I would receive a bonus if I washed and dried dishes for discretionary spending. But I was supposed to put a certain amount in church and a certain amount in savings.”

Other respondents stated that their parents did not believe in an allowance of any kind. John, for example, stated: “We didn’t have anything. We did have chores, we didn’t have allowance. My mother gave us money for the Methodist church collection. She would bake us an apple pie to make us something special. We were allowed to babysit to be able to purchase a new shirt.”

Many parents expected children to work for amenities and luxuries. Sally, a child of the Depression, stated: “I never remember getting an allowance. If I really wanted something beyond basics, I would have to contribute. I was always aware that my mother worked her butt off and that I should work too. I worked on a military base beginning at 16 to pay for clothes. I opened my own jewelry business in order to travel to Greece.”

Not receiving an allowance was often considered a good thing. Parents thought it better not to establish a carrot-and-stick approach in the adult-parent relationship. A middle-aged man who has received no loans from his elderly parents stated: “I didn’t receive an allowance. But, if I had a need, I asked for it. During my senior year in high school, if I needed $20 I would ask my dad for it. By that time, I had bought into the conservatism. I probably cashed a check only once.”

A married non-Hispanic white man living in an upper-middle-class neighborhood with two children takes this approach: “We are trying to move to a sense of independence in our two daughters, ages 14 and 16 years. They get an allowance of $100 per month. We are trying not to use money as a reward or punishment. We’ve never withheld money as result of poor grades.”

HOW MONEY MATTERS

Overall, how did respondents describe what money meant to them? From the respondents’ point of view, material aid embodies a set of values that in many cases has its origin in childhood experiences. Some described money as important to living a good life. Nonetheless, most felt that it has to be earned and respected. Many respondents who grew up in poverty during the Depression felt that money was crucial for meeting basic needs but also for learning how to share and how to give. In general, money was never a central focus of life for children of the Depression.

Henry, a retired military officer, stated: “Money is a major necessity. It is something that makes it possible to live, and so I can make my commitments.” For one married professional Latina, money did not engender much meaning early in life, and consequently she never thought about retirement. She laments this fact today, especially now that she has major legal expenses resulting from a family dispute: “I wish I had grown up with the idea that I should focus on money. All I needed to do was to be happy, and not to worry about anything. As I got older, in my twenties and thirties, there were great income disparities that I observed as a journalist, and I asked myself how I could earn more money. I didn’t equate money with financial freedom, then. Today money means freedom to do what I want to, and not feeling stressed.”

By contrast, some respondents felt just the opposite way: An African American divorcee in her sixties said: “Money doesn’t mean that much to me. I need money, but it has changed over the years, but this is due to a spiritual awakening. My dad didn’t care about money, but my mother liked to spend. It dawned on me that I received money from my work, but that it was not mine to keep. The ability to give is more important than to acquire. I have enough. The money that I get, I live off only what I need, and the extra amount I give away.”

Many of those who felt that it was more important to give than to receive had a religious upbringing. One Baby Boom respondent noted: “On the whole, I guess that I was not preoccupied about material things. I had a religious upbringing, and was not drawn to the value. By high school, I would do chores around the house to pay for items like cassette tapes. I didn’t hang out at the mall for example. By the time I was 12 or 13, I was heavily involved in the church and in tune with messages of Christian faith and tradition. Money is only a means for providing for the necessities, but it is not high on my list of things I think about. At times, I wanted to give it away when I had more than I needed.”

Women in retirement, especially widows and divorcees, felt that money brought economic security. A non-Hispanic white widow said, “To me it means security. I want to save for the future to do nice things.” Money also means freedom to many people. Many upper-middle-class respondents would agree with one gentleman’s description: “Money is nice to have, but it is not important. I’ve made a lot of money in the past, but I was not happier then. Much happiness is tied to free time. Taking away from personal time is a problem—you can’t buy that time back.” Alice, a recent widow in her late sixties, has similar feelings. From her perspective, “having extra money gives you flexibility.”

For many single women, money is a major economic necessity. In the case of one widowed grandmother raising her grandson, the loss of income after losing her husband was a shock. Even though her investments help her to pay major expenses, her son has problems that are a large financial drain on her. She said: “I am getting a hard lesson. My husband died when he was 59 years old. I am okay, but every once in a while I splurge and take a trip. I am raising a grandchild and he is now 15 years old. We got him when he was 15 months old.” An elderly parent from a divorced household wholeheartedly agrees: “I truly didn’t think much about money. It wasn’t until after the divorce that I thought about it.”

Research indicates that an increasing number of older Americans are finding themselves deep in credit card debt or even filing for bankruptcy due to medical problems, divorce, and inadequate pensions (Sullivan, Warren, and Westbrook, 1999). Ironically, these economic plights are often the troubles of their Baby Boomer children and their grandchildren.

THE COSTS OF WEALTH

Interviewees perceived a downside to having too much money, and that perception affects financial planning today. As Raymond, a non-Hispanic white retired professional in his late sixties, stated: “When I was in seventh grade, a friend of mine asked me to help him deliver newspapers, and he split the money with me evenly. Here I was a 12-year-old boy with three to four dollars in my pocket. I remember getting strongly criticized by my parents because I did not save a dime of it. They said that I had blown the money, that I let them down, and that I had been a spendthrift. My reaction was, by God, I will never do that again. Their disappointment in me would be worse than a spanking. I have taken that childhood frugality, and have laid a religious lay over that, and now I have a doctrine of stewardship, where I am a master that entrusts a foreman with using money wisely. To waste $1,000 is a sin or $10.00. The one check on my frugality is that I tithe anything that I give outside my own personal needs. I can send money to a medical missionary in Ecuador. We give away more than $10,000 per year.”

Wendy, an adult daughter from a middle-class family, said: “At times I felt my parents had the means to give more but they wouldn’t give designer jeans. When I was in ninth grade, my mother would pay only a set amount for things, and anything above that was my responsibility to pay. Once I got a job, I paid for everything. They would give us money for Christmas. And, I would say, ‘Just buy me one thing, I don’t want just cash.’ I wanted them to purchase me something.”

Lucy, the retired African American divorcee of modest means, stated: “My family pretended they had more money than we actually had. My grandmother drove a Lincoln Continental. Both of my maternal grandparents lived with me. My grandmother bought a new car every couple of years. She traded them in and got a new one. My mother has had three cars in her lifetime. One of my mother’s friends gave me a car. I felt really wonderful about it. You don’t look a gift horse in the mouth. I’ve always been around people who were very giving.”

For many respondents, a social stigma is attached to having too much money. One gentleman believes that this attitude prevented him from developing a clear understanding of how much should be earned. “I think I was picking up ambivalence toward money to provide security and level of prestige in the community, freedom, and nice opportunities. There were all sorts of messages, that there is not something good about money, there is a stigma. My grandfather, who I was close to, thought money was good. He wanted me to take over the family business—oil and gas business. My father made a point of not pursuing a financially rewarding career. His main concern was for me to find some constructive work.”

One African American respondent, Dave, couldn’t remember there being any serious problems about money in his family, yet he felt a sense of inferiority because they were the least well-off household in the neighborhood. He said that money “became a tool that I needed to purchase things, I was never anxious about it. Looking back on it, I was in a middle-class family, but we always strived for upper class. We didn’t feel needy, but wanted more.”

Other conflicts arose from not having a clear understanding of how the money was going to be used. Ted describes an example: “My dad thought my mother was financially illiterate. She was gainfully employed and would say it was her money. She would spend more and ask him for the rest. She would buy him gorgeous suits that he could care less about.”

Not surprisingly, when conflicts erupted, open discussions about financial affairs were few and far between at family dinner conversations. Financial problems weren’t discussed in front of children. Over and over again, respondents stated that the topic was never broached. Parents were not very open about money and did not talk about it and children never asked a lot of explicit questions. It was a forbidden subject. If there was a problem, the children were not aware of it.

A GUARDED SECRET

Respondents stated that as children they often sensed that money problems existed in the family. In some cases there were family rumors about money problems which, as one adult child confessed, she is still confused about. She laughed, “They must have taken them to their grave, because I didn’t hear about them. I found out later that my dad used to loan family members money to keep them going.”

While children may not know the particulars of a situation, they do hear the family whispers about money, exchanges, and hidden amounts. As children grow older, parents tend to open their communication about financial matters. Many Baby Boomer interviewees responded that while their own parents didn’t talk to them about money so much, they are quite open with their own children. A savvy adult daughter shared this insight: “We talk about money management. We discuss dividends, what is an ethical stock to buy, and whether to buy tobacco stock and give that money to the church.”

Money was seen as a powerful tool for sharing, negotiating, and control in family life for many. Today is no different, although money conversations occur in the open.

THE VALUE OF GIFTS

The Depression lingers on in the financial values of the generation who grew up during it. Today’s elder in his or her seventies or older will have memories of life during the Great Depression and how gifts meant a great deal, no matter how trivial they may seem by today’s standards. Again and again, both men and women in this age group commented on how special any sort of gift was when they were children. While it may not have been completely apparent how hard things were for their parents, as children they instinctively knew that their parents were stretching to make ends meet. So, a gift for Christmas or their birthday meant a great deal to them. Even the kindness of a neighbor in taking them to the movies was memorable. A typical comment was, “We never expected much, so when someone gave us something, it meant a great deal. The [monetary] value of the gift didn’t matter at all.” When these Depression era children had families of their own, they often lavished them with the gifts they themselves did not receive as children. Then the value of the gift became more important.

For these respondents, intergenerational giving, whether in the form of gifts, loans, or inheritance, is rooted in early childhood experiences. Those experiences may ultimately influence one’s attitude toward financial planning and bequest intentions in adulthood. Many of the concerns about intergenerational gift giving expressed by these two generations dealt with uncertain adverse life-cycle events, including poor health, which would ultimately inhibit one’s ability to pass on wealth. These concerns are also the product of various other circumstances, like a child’s need for college tuition, a wedding, a housing down payment, and of constraints, such as financial capacity based on earnings and future rates of return on investments.

Remarkably, more than seventy-five years after the start of the Great Depression, that event continues to resonate in the attitudes and lives of those who lived through it and of their children. For respondents who were alive during that time, the lessons were frugality and charity. For their children, the parents made every effort to deny them nothing, as if they were trying to give their own children the type of childhood they themselves were never able to experience.

These narratives show that money and attitudes about money are colored by memories and experiences. They show that early family teachings and examples are powerful influences and have the ability to affect many generations into the future. With this in mind, the contemporary aspects of specific kin attitudes and behavior and their implications for private transfers from elderly parents to their adult children are discussed further in Chapter 6.