04/10/2012 06:33 pm ET Updated Jun 10, 2012

How Can Wealthy Families Teach Their Children to Live Frugally?

This question originally appeared on Quora.

By an Anonymous User of Quora

We are fairly well off after a few good opportunities in Silicon Valley.  But if you met us, you would never know it since we are extremely frugal. We grew up very modestly, and our parents taught us how to save and invest.  

We have a few rules in our house:
  • Give generously and invest in others - We donate a significant amount of money to charities.  We also have our children participate in selecting what to give to other children. It is part of our family life to help others since it makes them value what they have even more.
  • Less is more - At the end of my child's birthday party, he had over two dozen new toys. What child needs that many toys?  We let him select 2 toys, and we gave away the rest. We routinely cull our children's toy boxes to keep their things to a minimum. One of the greatest predictors of success in life is the "marshmallow test."  Deferred gratification is important, so we strive to teach our kids that.
  • No extras - We do not have cable or Netflix, a flat screen TV, or even a land line. We do not need those things to live.  We invest in education, extracurricular activities, and trips, but we try to avoid extra expenditures whenever possible.
  • Reduce brands in the house - We buy modest things and whenever possibly, we do not go with brand name clothing, food, detergent etc. Our children's clothes are all bought on sale, and we drive a simple car. Our last car was over a decade years old, and we basically drove it until it was on its last legs before buying another small sedan.
  • Limit advertising - We severely limit access to television since there is a lot of marketing which drives acquisitiveness. We try to let the kids watch shows without licensing so they do not ask for the latest XYZ product.
It may seem our children are deprived of many things, but rest assured, we live a rich life.  We invest in experiences and people, not things.  If all of the wealth went away tomorrow, our lives would not be that much different on a day-to-day basis. Our kids are happy and well-adjusted because they do not know any other life. More questions on parenting: