Let's face it: as a new mom, you're just trying to keep both the baby and yourself alive and well. When it comes to parenting advice, there are countless articles online that offer all sorts of tips and tricks to help to demystify being a parent, everything from how to clean your baby's nose to a plethora of recipes for how you can make baby food. What most articles don’t seem to touch on is how you can successfully master the art of parenting and making financially smart decisions, like buying life insurance.
I recently had a chance to interview Kimberly Palmer, author of the new book Smart Mom, Rich Mom: How to Build Wealth While Raising a Family, to explore her top tips to help moms balance being a mom with being financially savvy. "I wanted to write a book about a bigger topic than just couponing to help women build wealth and security for their families," says Kimberly on why this was a passion project for her.
Smart Mom, Rich Mom covers a wide array of topics including keeping track of spending and setting short- and long-term savings goals, cutting costs on childcare and other significant child-related expenses, gaining more flexibility at work without sacrificing your earning potential, and planning for unpaid maternity leave and unexpected events, like a layoff.
Tip #1 – Take care of the foundation
Most people tend to leave the foundational money elements aside because they aren't fun. However, taking care of your will, life insurance, and any trusts you might need will save you a ton of heartache if something unfortunate happens in your family. "Setting up all of these documents, while not great topics, gives you a peace of mind," says Kimberly. Having peace of mind financially as a mom is one of best gifts you can offer your family.
You can complete a life insurance checkup to find out how much life insurance you need in just a few minutes. From there, it’s easy to apply for coverage all online at the click of a button.
For your will and trust, it's always best to use the services of an estate planning attorney to make sure everything is completed to meet your needs. However, if you're working on a tight budget, LegalZoom offers wills and trusts at reasonable rates and even has lawyers who are available for consultations, while Willing lets you go through the entire will-creation process online for free.
Tip #2- Let’s talk earning power
One thing new moms struggle with is finding a balance between caring for your kids, whom you love and adore, and protecting your earning power in your career, which is what pays your bills. According to Kimberly, "What often happens is that new moms are so fixated on the salary number that they forget to negotiate for important workplace benefits like flexibility in their work schedule."
It’s important to remember in your review meetings that you talk about more than just money with your boss. A recent Washington Post article suggests that working mothers used to earn 6 to 7 percent less than working nonmothers, but after the policy changes in the Family and Medical Leave Act of 1993, the gap is now around 1%. Negotiating for more income is always going to be a top priority because we all live on cash flow. However, benefits like flexible schedules, working from home, and negotiating for additional vacation time are worth a lot to a new mom who is trying to balance life with career.
Tip #3- Find the savings
Before you let the $245,000 average cost of raising a baby to college age scare you off, know that it is still possible to afford your child and your lifestyle (with some minor alterations).
Saving money is a topic that most people struggle with, let alone parents. Whether your goal is to save $5,000 during your baby’s first year or $500, you’re going to need to get really serious about budgeting. It's through your budget that you will be able to afford all those dreams and goals that you have for your family.
There are countless apps on the market that do the dirty work to help you budget and save more efficiently, and there’s nothing wrong with the old school DIY approach to budgeting. Whichever way you decide to budget isn’t important. What is important is that you create a budgeting system that will set you up for success. Here are a few tips to think about when you are creating your budgeting system:
Choose which way you want to set up your budget- DIY or with an app
Create a weekly "date" to check in with your money
Decide if some expenses are unnecessary and cut those from your spending
Get the most from your savings with a high yield savings account like the one at Ally Bank
Create family savings goals and track those goals each month
Create a list of passwords, login information, and when each bill is due
Whether you’re expecting your first child or your third, it doesn’t diminish the universal need to prepare financially for success. Navigating career and home life can be a challenge (or feel like complete chaos most of the time), especially early on as you are adjusting to this new way of life. Books like Smart Mom, Rich Mom, are a valuable resource to learn from other women the real life tips and tricks that it takes to pull off raising a child and being financially savvy.