As a mother of two small kids, I’m used to getting plenty of unsolicited advice from others about parenting — some of it’s useful and some not so much. But there’s one kind of advice we moms don’t receive enough of and that’s advice about money. It’s too bad because, women need to be extra careful — we typically make less than men, we live longer and we spend more time out of the workforce to have children and raise kids.
There are a few things moms can do to improve their financial health. To start, parents should avoid these five common money mistakes:
1. Putting your child’s education ahead of your retirement savings
We all want to help our kids get the best education possible, but that shouldn’t be at the expense of your retirement savings. Let me be clear: if you retire broke, your kids will have to look after you. Do you really want to be a financial burden on them? Without any retirement savings, this is what could happen. It’s better to encourage them to save for school on their own than ask them for money support later in life.
2. Not teaching your kids about money
Parents need to set limits and teach their kids about money. Doing so will give them a solid financial footing for their future and will help set boundaries about money and spending. Instilling frugal values will help your kids understand the difference between wants and needs and will make it easier to explain what you can and can’t afford to buy them — or even better, how to save and buy things for themselves.
3. Falling into the $1000 stroller trap
The first time my husband and I went stroller shopping, we came very close to dropping nearly a $1,000 on a stroller. Why? Because the salesperson made it seem like we would suffer without it. We felt like bad parents walking away from it. As your kids get older, that feeling just worsens. The pressure to spend big money on your kids can be intense — from birthday parties to Christmas gifts, it never ends. Don’t fall into this trap.
4. Quitting work to stay home with kids (without asking the right questions first)
Becoming a stay-at-home mom is a huge decision and it’s also really emotional. Too often, women don’t ask the big questions before making that change. Questions like “what impact will this have on my long-term finances?” and “How hard will it be to re-enter the workforce?” and “How comfortable am I being financially dependent on my partner?” Before making the choice to stay home with the kids, make sure you and your partner sit down and cover all the angles.
5. Giving in to guilt
Women are usually more prone to feeling guilty, especially when it comes to our kids. But guilt can lead us to make very bad financial decisions, like spending $200 on a birthday cake for your kid’s birthday party because you had to work all weekend. Or letting your adult kid live at home rent-free because you feel bad asking him to help with the household bills. Don’t let guilt hold you back financially. Not only is it bad for you, it sets a bad example for your kids.