Here’s How This Smart Mom Raises a Rich Family
Raising a family is hard work. It can be challenging not only mentally and physically, but also financially. No one knows this better than AARP work and jobs editor Kimberly Palmer. If you often find yourself worrying about your financial future or how to make ends meet each pay period, it’s time to take action and get control of your finances. The Cheat Sheet chatted with Palmer about her new book “Smart Mom, Rich Mom.” Here’s what she had to say.
The Cheat Sheet: Why did you write this book?
Kimberly Palmer: As a mom and a journalist who writes about money, I have always been bothered by the fact that so much of the personal finance advice aimed at women is so focused on shopping and couponing. As moms know, that is such a small part of managing household finances! While there’s nothing wrong with saving money while shopping, focusing on bigger things, like signing up for flex spending benefits at work or taking out life insurance, or creating a college savings account can create so much more wealth in the long run than getting a discount.
CS: What makes a mom a “smart mom?”
KP: Smart moms embrace their role as the chief financial officers of their families. That means spending time to make sure you’re staying on top of all of your family’s financial accounts, including savings accounts and long-term investment accounts for retirement or college, and updating things like your renter’s or homeowner’s insurance as well as life insurance. Investing a couple hours every few months to review anything and make any necessary updates can go a long way toward building your family’s financial security.
Smart moms also take the time to share what they’re doing with their children as soon as they’re old enough to understand, so we can pass on financial literacy to our kids. One fact that really struck me as I was doing my book research is that even as young as 8, you start to see gender differences in terms of how boys and girls talk about money. So we have to make sure we are talking to our daughters as much as our sons.
CS: How can a smart mom become a “rich mom?”
Kimberly Palmer: The first step is defining what being rich means to you. I interviewed all kinds of moms in the book and we all define it differently — for some it means having a certain amount saved up in the bank so you know you’ll be okay in an emergency; for others it means having the work flexibility to take care of your home responsibilities while also earning a paycheck. For others it could mean making slow progress toward contributing to your college savings account and retirement account. Maybe it means all of those things to you and we can make progress toward accomplishing all of these financial goals over time. It can feel overwhelming, but taking small steps helps.
CS: How did you become a smart, rich mom while raising a family?
KP: It is hard to do everything, but also so important– I think the key is making it fun and enjoyable so you can incorporate the habit of financial management into your life. For example, I like organizing all of our accounts in a binder that I review every few months. That way, I can make adjustments and stay on top of things without wasting time searching for logins or passwords. You have to find the system that works for you.
The Cheat Sheet: What do you hope your readers will learn from your book?
Kimberly Palmer: I hope that readers learn from the amazing moms making smart money decisions for their families, as I did, and are inspired to make some changes in their own life that boost their finances. For me, as I was researching the book, I was inspired to take a more active role in handling our family’s savings accounts, as well as to start talking more often to my daughter about money. I also finally opened a college savings account, five years later than I should have. But there’s no point in regretting past mistakes; we can learn and move forward and start building wealth today.
CS: Anything to add?
KP: Because of factors like divorce and women outliving men, we have a 90% chance of being on our own when it comes to managing our finances at some point in our lives. We have to be ready for that by embracing our financial responsibilities now, so we can protect not only our own finances but also our children’s. So much rests on our shoulders as moms, and taking care of the money is one of them!