Imagine this: on the screen, you look at the six Powerball numbers you’ve chosen (based on your kids’ birthdays, of course) and gasp in awe as you see each number being drawn. You’ve won the big jackpot – and in Powerball’s case that means you’ve won potentially hundreds of millions of dollars. All of a sudden, there’s media knocking at your door, and lawyers and accountants lined up around the block for the chance to represent you. In short, you’ve shot right up into the upper echelon of society with barely more than a moment’s notice.
The question is: to what extent would that affect your parenting? For some, the reason they don’t buy their kids a lot of things is purely economical, a realistic budgetary limitation; for others, it’s more of a parenting philosophy, believing that materially spoiling kids might make them, well, rotten. Once you’ve won the Powerball jackpot, there might be a temptation to follow one of these two options to the extreme, but, as with most things parenting related, choosing a reasonable middle ground is probably the best way to go.
The minute you open your browser and see that you’ve won the jackpot (because, these days, you can get the latest Powerball results right on your computer), you have to start planning for your kids’ futures. That comes before everything else. It comes before the Disneyland vacations and new cars, before the solid gold stroller and diamond-encrusted Champagne cooler (which actually exists).
Set aside money for your kids’ education, ensuring that there’s an ample amount for post-secondary education, Masters and PhDs as well, should they choose to follow that route. If you so choose, you can also set aside a custodial IRA, which gets them started very early on saving for retirement. That might seem funny to some, but remember, the goal with this kind of windfall is to set up your kids for life, and not just for the foreseeable future. Also, whatever money you put into either your own or your kids’ IRAs will not be subject to tax, and may entitle you to a deduction.
Once that’s all squared away, you want your kids to be able to enjoy the good luck that’s befallen the family. It doesn’t make sense to withhold good fortune, so go ahead and plan that Disneyland trip, or get them that awesome high-tech telescope they’ve had their eyes on (no pun intended!). It’s good to spoil kids with things you can share with them – that means experiential gifts like a vacation – or things that satisfy their intellectual curiosity – the telescope, for example. Remember, winning the Powerball jackpot is an opportunity to better the family, not necessarily change the family.
Ultimately, your approach to parenting shouldn’t change too much if you win the lottery. You’re still going to love your kids and want what’s best for them, while having the good sense to set boundaries and ensure they don’t become entitled. It’s just that now, when you tell them to clean up their room, you’ll be asking them to clean up their room on the family’s private yacht. It’s the little things that change!
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