Q: Why do you think women, and especially moms, get short-changed when it comes to advice on personal finance and wealth building?
Even though moms are making so many big, important financial decisions for their families -- how much to save, what to spend on, what savings and investment accounts to prioritize -- so much of the marketing aimed at us relates to couponing and saving a few dollars and cents. It really misses the big picture in terms of what's important to us and what's important when it comes to building financial security. The financial industry seems to often assume that we don't care about investing, but we do -- a lot.
Q: Why does motherhood itself create huge financial stresses for women? What steps can future and new moms take to prepare for and minimize the added expenses and financial challenges of having babies?
There are two big factors at play -- one is that becoming a mom has a huge, usually negative, impact on our earnings. We often take time off of work, some of us for longer than others, and that often means our household income drops and, even more significantly, our future earning power takes a hit. Secondly, babies are really expensive and they just get more expensive as they grow up. Saving for college, buying food and clothing, school activities -- children can feel like bottomless pits when it comes to money! To prepare, we have to start saving as soon as we are expecting to have kids, so we can set money aside and easy the financial burden that often hits in that first year.
Q: In your book, you note a few key tenets that all moms should discover and embrace. Two of these are: “Spend and Save Smarter” and “Plan Ahead.” Could you expand a bit on these themes?
As moms, we make so many spending decisions for our families every day. It can really pay off to put some thought into being strategic about those purchases. For example, buying in bulk, accepting hand-me-downs for big ticket items and buying gender-neutral clothes and toys can all help reduce our overall spending. It's easy to get into trouble with spending if you are making a lot of last-minute, unplanned purchases. "Planning ahead" also refers to the fact that when we expand our families, we often purchase cars and bigger homes - huge costs that we
Q: In “SMART MOM, RICH MOM,’ you advocate approaching spending with an attitude of “frugal luxury.” Would you share an example of this attitude in action? And any words of advice to moms on how to implement it?
It's important to feel like you are living the life you want -- moms need to be happy, too, and not just feel like they are sacrificing all the time. There are ways to feel indulgent without overspending -- for example, for me, paying to have my groceries delivered is one of my biggest luxuries -- it adds about $10 to the cost of weekly groceries but it means I have more time to spend with my kids on the weekend. Similarly strategies include paying to have a cleaning service and ordering birthday gifts for the many kids' parties you attend in advance.
Q: Many moms are stuck in the middle of caring for their young children and caring for their aging parents. What advice can you offer to moms struggling with this overwhelming emotional and financial strain?
This is one of the biggest challenges moms face, since so much of the caregiving falls on our shoulders. Most importantly, you have to take care of yourself, too, financially and otherwise, so you don't get completely drained. Taking steps to protect your earning power by continuing to freelance or take on contract work even if your primary focus is on caregiving is one way of making sure you can provide for yourself and your family in the long run.
Q. You interviewed dozens of moms from all walks-of-life, what were a few of their secrets or tips on how to excel at managing their own money?
The biggest one is being incredibly organized. As a mom, you should know the location of your life insurance documents, mortgage, bank accounts and dozen or so other financial accounts and then check them quarterly, to check for any updates or changes. Once you have your system organized, it's easier to stay on top of it instead of feeling overwhelmed and putting it off. A lot of moms I talked to use a digital method of tracking money, too, such as online tools for budgeting or automated savings deposits. The more you can automate, the easier it is to stay on top of your money.
Q: Finally, as a mom of two young children with a demanding career as a journalist. How did you find time to write a book? What are your own secrets for balancing work and family, and for smart spending and saving?
My system revolves around binders -- I love having a financial binder that contains the essential accounts I need to monitor and track and update as necessary. I include reminders of when payments are due and any other documents, such as tax receipts. For me, it's fun to check in on it once a month or so, and it also helps me make sure I keep all the accounts in good standing. In terms of balancing work and family, I try to outsource as many boring tasks as possible, like grocery shopping, so I can focus on my kids when we are all at home together. I also talk to them about money a lot in the hopes of passing on some of these strategies!
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