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Five Ideas to Consider About Parenting and Money

Parenting is expensive and can add financial stress to your life. You may not know how best to save money or explain financial concepts to your children. Below are a few key ideas to keep in mind as you navigate personal finances with children:

Talk about finances with your children. Discussing money with your kids can be awkward, but avoiding the conversation will make it harder for them to become financially literate. Many children rely on their parents for financial guidance. You might start with something as simple as mentioning when an activity they participate in costs money. Kids don’t always get how money has tangible effects on their lives. Next, you will want to teach your children about wants vs. needs. You may provide them with a small allowance and teach them how to set aside a portion of it every week with a goal of saving for a bigger purchase. You can show them how to track their expenses and offer cash incentives for meeting certain savings goals. One of the most important ways to teach children about money is to set a good example yourself, and simply make yourself available as a resource should they have any questions about money.

There is no one-size-fits-all budgeting system. Any budgeting system is better than no budgeting system. Some prefer detail-oriented plans; others only care about the larger picture. You will need to work with your partner to figure out what works best for you--for example, if you want to handle finances from a joint account. It is important to discuss how your approaches to finances and budgeting may differ - you might start by talking about what your family’s financial life looked like growing up. Open communication is key.

Buying is not always the best option. While there are certainly many advantages to owning a home, there are situations where it may make sense for you to rent instead. Owning a home is pricey--with down payments, not to mention maintenance, insurance, and moving fees. If you live in an expensive housing area, you might not have any options that fit comfortably within your budget. When buying a home, it is a good idea to save as much as you can before making a purchase, since putting more money into a down payment will save you in interest in the long run. Putting 20% down rather than 5% can save you on hundreds of dollars a month. If you are buying a home simply to fit in with expectations, you may want to reconsider your decision. Owning a home is a long-term investment so you want to make sure you are doing so for the right reasons.

Being emotionally ready to have children can be more important than being financially ready. Some couples put off becoming parents until they have saved a certain amount, which is an admirable goal, but at the same time you cannot anticipate every cost of parenting. It is important instead to focus on being emotionally ready to have children, since they can be chaos agents who upend everything you thought you knew about parenting and life. Being emotionally prepared for the unexpected will help you navigate the obstacles that inevitably crop up.

Make a will sooner rather than later. People generally don’t like to imagine the worst, but parents should prioritize creating a will if they haven’t already. It does not matter how old the child is, you will want to have a contingency plan in place. You may work with an estate planner and decide who will step in as legal guardian and how finances will be allocated.

If you are interested in learning more about our financial advisory services, please call us at 515-557-1860 or email us at We work with families all over the U.S. and are a fee only fiduciary advisor located in Des Moines, IA.

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