Earlier this month I met Kimberly Palmer, a financial writer and the author of Smart Mom, Rich Mom. She was talking to a group of mothers about her book and women’s financial confidence. I’m a big believer in moms as money managers because I have a theory. I suspect that mothers have an edge when it comes to family finances because we routinely juggle multiple demands and limited resources with an eye on the short and long term every day. What we don’t do so well is take care of ourselves, financially and in other ways. In my mission to provide you with quality mom-centric info, I put a few pointed questions to Ms. Palmer. See our convo below!
For whom did you write the book? Stay at home moms, working moms, young moms, empty nest moms, single moms?
I wrote this book for all kinds of moms! The unifying factor for all moms is that we are all raising kids – and we need to find a way to afford it! That includes saving for not only their futures — college, for example — but also our own. A lot of moms, both working and stay-at-home moms, make the mistake of putting our kids before ourselves financially, and forgetting to set aside funds for our own future retirement. The results can be devastating.
When should a mother start paying attention to her finances?
The sooner, the better. Of course, as soon as you know you are expecting, you can begin to prepare financially by setting aside savings for child care costs or the lost income that comes from a parent staying home. And even before that, you can think about moving ahead in your career in a way that will let you manage life as a mom, which often demands at least some degree of flexibility. (Sick kids don’t take care of themselves!) And after the baby is born, if your budget allows it, you can open a 529 college savings account to start building toward that big goal of paying for college.
Are there any common mistakes you’ve seen moms make?
Yes! It’s so often that we put our kids before ourselves. I think it’s a common instinct for moms, but a detrimental one. If you don’t have a 401(k) or other retirement plan set up yet for yourself, then do that first before opening the 529 college savings account. The same concept applies to your own parents — for moms in that period when we are taking care of both our kids and aging parents, it’s important make sure you are remaining financially secure —everyone is counting on you! It’s often easier for us to spend money on others than ourselves.
I’ve heard that women are one “D” away from disaster, due to a partner’s disability, death, or divorce. Can a mother protect herself financially?
In addition to taking out life insurance and disability insurance, which can protect our families, I think of our own earning power as a form of insurance. As long as we have our own earnings to fall back on, then we will be much more able to navigate any of those dreaded “Ds.” Even if you are not working full-time, you can maintain contacts and even take on contract work so you leave that door open.
Are there policies in the US that make motherhood more financially perilous than it has to be?
Certain policies definitely help moms — paid maternity leave, affordable child care — and not having access them can be financially destructive. Right now, most of us moms have to fund our own maternity leaves, which isn’t always possible to do.
How does the book go about teaching moms financial skills?
In the book, I suggest conversations that we have with our kids about money, which can get more complicated as they get older. I also include a template for a letter to write to your kids about money — it is based on the letter my mom wrote me as I was getting ready to graduate from college. She shared her own money mistakes, values and the choices that helped her and my dad buy their first house — it really stuck with me. I think the more we talk about money with our kids, the more they’ll feel comfortable with it — and it helps us feel more comfortable, too!
Would YOU like a free copy of Smart Mom, Rich Mom by Kimberly Palmer? Email me your most pressing financial question and we’ll draw one winner for the book!! Send it to email@example.com by Saturday, November 20, 2016 at 12 o’clock noon.
‘Til next time,
Your (Wo)Man in Washington