We spoke with Chelsea Brennan ahead of Mother’s Day about the importance of financially protecting your family.
Before becoming an entrepreneur, Chelsea Brennan’s days were filled with long hours on Wall Street. She worked at Goldman Sachs and later a hedge fund before officially quitting her job and founding her site Smart Money Mamas in 2017. She uses her platform to help other moms learn about personal finance and take control of their careers.
We spoke with Brennan ahead of Mother’s Day about overcoming the distinct financial challenges moms face, how to financially protect your family and the biggest financial mistake she sees parents make.
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I think the pandemic has brought to the forefront a lot of structural issues we have in our work culture for parents, [including] lack of paid leave, a school system that assumes every child has a parent that is a full-time caretaker and more. So, first off, I hope that coming out of the pandemic we can drive greater change to address those big issues.
But for individual families, I believe that many have seen the impact of not having sufficient emergency funds, solid financial bases and diverse income streams. I think we’ll see families ready to make changes and be better prepared for the future, since we’ve all experienced how quickly things can change and how stressful it is when you’re not prepared.
The biggest financial challenge facing moms today is that society seems to still expect women to work like they don’t have kids and parent like they don’t work. The workload is impossible and too many moms feel like they are failing in all areas. Often, that leads to moms either burning out and stepping out of the workforce or stepping back, not going for that big promotion or getting stuck doing work that doesn’t have a clear path for growth. These challenges continue to lead to gender wage and wealth gaps.
To overcome that challenge, moms need to make the time to be still and look inward at what they want their life to look like. What’s important to them? What do they want to achieve? What does wealth mean to them and do they feel worthy of it? What kind of mom do they want to be – not what Pinterest or their own moms expect of them, but who they truly want to be?
Then, start aligning their money and their career with those values. Even if your values aren’t what your friends want. Build wealth and build your life in a way that works for you.
This pandemic has been particularly hard on mothers and the stats around mothers having to step back or step out of the workforce are staggering. I mentioned how our system assumes there is a full-time caretaker at home and the pandemic showed the ongoing effects of the gender wage gap. Often the woman in a heterosexual partnership makes less, so it seems to make more sense for her to drop out of the workforce if a parent is needed at home. And yet, that decision continues to widen [pay] gaps. It’s a frustrating paradigm.
There is one benefit though. If you’ve had to step back or step out, you’re not alone. Employers will be hearing the same story repeatedly from women across the country and that puts less onus on you to have to explain the gap in employment.
Also, consider joining networking groups, taking continuing education classes where you can — free or paid, and starting to dip your toe back into the water with a part-time job or freelancing. This will show employers that you’ve kept up with your industry during the gap and are committed to coming back full-time.
The biggest change to make is to get very clear on your family money values and making sure [your] spending aligns with those values. What matters to you? What lessons do you want to teach your kids — about money and about life — and how does that impact what you’re going to spend money on?
Often, we see the headlines about how expensive it is to raise kids and we end up spending money on a lot of things that don’t matter to us. The “Keeping up with the Joneses” feeling is strong when it’s tied to our parental guilt. But by getting clear on your family’s money values, having open and honest conversations about it, you can start to strip those expenses that don’t align with who you are out of your budget and feel more confident about how you’re raising your kids.
As parents, we have responsibility for the small humans in our lives and that means making sure they are financially protected no matter what happens. We’ve seen over the last year how quickly difficult situations can arise, so the more we can think ahead and protect our future selves, the better.
If you’re a parent without a will, make sure you secure one as soon as possible. Check that you have sufficient life insurance — your policy through work isn’t enough — and beef up your emergency fund.
Not only does this put your family in a less precarious position if something goes wrong, it also reduces financial stress and anxiety for you so that you can make more savvy decisions in a crisis instead of panicking.
Money is related to everything we do. And I mean everything. In our society, money or the lack of it impacts whether we have a safe place to live, food to eat, weather-appropriate clothes to wear, education and more. That means none of us can avoid the concept of money — and that we all have deep emotional relationships with it.
It’s important to teach your kids lessons about money because they will grow into adults who have to be able to handle it with confidence. And the money stories and mindsets we give them as kids will impact how effectively they can manage. It will impact how they value their own work, how they spend, their anxiety around investing and even their worthiness of wealth.
Often, parents think about the importance of teaching their kids hard work or what the different coins and dollar bills mean. But we can forget that money lessons go far deeper. As parents, we want to have these conversations actively so that we can help instill our family’s money values and make money not a taboo topic or something scary, but just a tool that we use in our daily lives.
The best way to teach kids the value of money is to give them opportunities to practice with it. Giving kids age-appropriate autonomy with money, having their own money to spend and make mistakes with, expenses to have responsibility over, will let them make mistakes when the stakes are low. And show them that, yes, they can make smart decisions with money. But sometimes they’ll make mistakes too. Yet, it’s not the end of the world. We don’t feel ashamed about it. We just learn from it and move on.
In our family, we do weekly allowance with both of my boys, 3 and 5. Their money is split between giving, saving and spending and I help them set age-appropriate goals for their different categories. We also talk about needs versus wants, investing, entrepreneurship and more.
Overall, just continue to talk to your kids openly about money, let them know that you’re still learning too, and make it a normal, non-scary thing.
My current financial stress is learning how to work less while still making the money I want to make. Since I graduated from college, I’ve worked extremely long hours. And when I switched to entrepreneurship, I never really stopped. But now that I’m learning the lifestyle I want, I need to unravel what that means for business planning and process.
We’re tackling this by setting up more boundaries for my work time, creating systems and processes for the Smart Money Mamas team, and staying committed to our broader values of women living in their superpowers while also practicing self-care.
My current financial goal is growing my business, Smart Money Mamas, to a $1 million-dollar-revenue business. It will likely take a few years, but we’re working towards it by growing our membership community and more broadly marketing our New Mama Money Plan, Financial Literacy Activity Pack for Kids and Family Emergency Binder.
I’m proud that my husband and I saved aggressively while I was working on Wall Street and at my hedge fund job. Originally, we were planning for financial independence and for me to retire early. But when my work wasn’t aligning with my values and I was facing physical and mental burnout before the birth of my second child, it meant we had given ourselves options. I was able to quit my job, even though my husband was a stay-at-home dad, and build a business helping other moms feel confident with money and have the options they need to build their best lives.
The best financial advice I ever received was to invest early and often. I started learning about investing from my dad and his business partner when I was 13 and those early lessons led me to start investing as soon as I started working. Along with a commitment to saving, it gave me the options I mentioned above that I am so proud of.
The worst financial advice I ever received was not to worry about money in my early 20s, just enjoy my high-paying job and live it up. Luckily, I knew not to follow this advice, but I find it’s easiest to save when you’re young and don’t have family responsibilities and, oh my, I would have missed out on all those years of compound growth!
Image: Nastia Kobzarenko
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