You’ve thanked Mom for her love and support, but how for the smart money blueprint she gave you? According to Investopedia, “it’s common for one partner to handle budgeting and bill paying and another to handle all the investments, or for one partner to do all the financial tasks.”
Meet our panel of mothers:
Janice, mother of three, grandmother many times over,
and resident of Millstadt, IL
Shaikenya, mother of three grown children,
and resident of St. Louis, MO
Irene, first-time mother of a newborn,
and resident of San Diego, CA
HM: Happy Mother’s Day, Mom! You’ve always called yourself a saver. I hear about a lot of families where the mother kept an eye on the budget. Was that usually the case in our home?
JANICE: Most definitely. I always paid extra on all our bills. Just tried to stay ahead “just in case”. Always had a Christmas club. That was a savings account with the bank. You saved a certain amount each week then the 1st of December you had your Christmas money!!
HM: Wow! I’ve heard that called a “sinking fund.” You were using a sinking fund before it was even a thing! As a mother, I’m proud of how financially prudent me and Ruth and Eddie have all become. And it seems like those good lessons have passed down to Kevin and Kylie also, with them getting solid jobs as a cop and nurse and buying a home at a young age. For anyone reading this who is thinking about becoming a Mom themselves, is there anything you may have done that instilled those good financial principles into your kids as we were growing up?
JANICE: Never ever spend more than you make. Be an example of working hard. Try and be honest with your family about costs of necessities and the importance of savings.
HM: I do remember the long hours when you’d work the night shift at the restaurant down the street. And then when you studied to be a Physician’s Assistant while also working FT. I think that work ethic left an impression on me, but I didn’t realize it at the time. Do you remember any specific conversations or lessons that you taught your kids or do you think the lessons were passed along simply by setting that example of budgeting for things with the family and having a solid work ethic yourself?
JANICE: I don’t remember anything in particular. I remember worrying about extra expenses that would come up but tried not to burden you kids with everything. It did seem like everything worked out.
HM: Looking back, is there any advice you might give to new or expecting parents, or people navigating their way with kids who are approaching adulthood?
JANICE: Being a parent is the hardest job you will ever have. Try and remember the distance to the finish line is different for everyone. I feel the best about my children when I think of what good friends they have become to me.
HM: Shaikenya, first off, let me be the first to wish you a Happy Mother’s Day! We’ve known each other almost 10 years now and you and your family really seem to be thriving. In many households, it’s the mother who manages the finances. Has that been the case in your home?
SHAIKENYA: Thank you Jeff! I’ll also be turning 50 in May. 🙂 I’ve cherished our friendship over these years. My now-adult children are all doing well. I’ve tried to instill a thriving mindset in my three. I am thankful that they still allow me to be a part of that journey with them. We often have family meetings over Zoom to keep everyone on track. I can’t speak to every “African-American”/Black household. It was/is the case of my own. I managed the household finances. I was with their father for 23 years—17 of them married—before we divorced in 2008. That was the year of the crash.
HM: 2008 will forever be burned into my memory. That was a hard year for so many people, myself included. As a mother who has raised kids in St. Louis and also San Diego, currently the country’s most unaffordable city in the country, is there was anything you might do differently when living in each city to manage your household finances?
SHAIKENYA: I can’t take all the credit for raising my children “singly” because I was technically married for a large portion of their younger years. It wasn’t the best relationship yet it did allow me to pivot in ways and raise my children where they never wanted for anything financially. I divorced in 2008 which I will say was long overdue. That was an interesting decision as I look back. The challenge of 2008! I had always made good in the financial services arena, mostly mortgage and real estate, but my income took a complete nosedive that year. I decided since I was starting over in more ways than one to take on the challenge of San Diego. It was the most financially challenging thing I’ve EVER done! It was also the most financially rewarding because it only took me 2 years to do in San Diego what it had taken me 20 years to do in St. Louis! Price points and the power of relationships! My oldest daughter had already graduated with her Bachelor’s degree and she allowed me to go back to school while making new beginnings in San Diego. The most challenging part of moving to San Diego was that I had always worked commission and it frightened me to wing it in a new market. I got just enough footing and some very long term and profitable friendships before I made my way back to St. Louis for a career changing position. My kids are now all back on the west coast and I am planning to retire in San Diego within the next 5 years. I count my children’s support and their ultimate flexibility that allowed me to make sacrifices that ultimately allowed our family to go from survive to thrive.
HM: That’s exciting! It’ll be great to have you back in San Diego for some boozy brunches! Looking back, is there any general advice you might give to new or expecting parents, or people navigating their way with kids who are approaching adulthood?
SHAIKENYA: My number one rule would be to set early ground rules for a budget. A budget is only effective when it represents your ultimate truth. Go over it. Compare it with bank statements. Discuss individual budgets and family budgets. Use money as an interdependent method to accomplish family goals that serve the greatest benefit and good. Link resources and always communicate!
HM: Happy Mother’s Day and congrats again on being a new mom! You and your hubby both seem to be on the same page as being so financially conscious, which I love! I’ve heard that in most homes, it’s the mother who manages the budget. Are the finances of your house managed by you as well or has that been a team effort?
IRENE: Thank you! It’s a split effort. Hubby manages our investments and bills, while I’m in charge of buying household necessities and food. This is where couponing and getting creative comes into play. For groceries, I buy what’s on sale and plan our meals based on what I get for the week. I downloaded the CVS and Walgreens apps on my phone and signed up for an ExtraCare (CVS) account and myWalgreens account. I clip digital coupons through the apps to score a bunch of household items for cheap, or even free! Everyone knows diapers are expensive. Through digital couponing at CVS and Walgreens, I often get them for up to 50-75% off.
HM: That’s a nice discount on diapers! Is there any other general advice you might give to new or expecting parents with saving for a new baby, 529 plans, or any other aspects of setting your child up for financial success?
IRENE: We set up a 529 plan with Vanguard with the initial investment of $3K and selected the target enrollment date that corresponds to the year our baby, P, will be entering college. The target enrollment fund starts off with mostly stocks and then shifts to more bonds the closer you get to the target date. You can then set up a recurring investment to be automatically transferred from your bank account to the 529 plan. It lets you set up how much you are able to contribute on a monthly basis. Also, Vanguard can give you a “Ugift” code that you can share with friends and family so they can give the gift of education.
Another piece of advice is that I encourage shopping second-hand. We’ve gotten so many new clothes for P and he grew so fast that he didn’t fit into 75% of the clothes we bought. Same with toys- we noticed P was happier playing with pots, pans, the door stopper and empty boxes than with the toys we bought. All of my friends with kids all said the same thing!
Lastly I set up a separate bank account through Capital One for P. When we got money from friends and family for our baby shower, I deposited it in his account. When he is old enough, we will teach him the value of saving and introduce him to the banking system.
HM: I love all these steps you guys are taking! I think it will be an inspiration to other parents who are starting out. Have you considered investing the money from P’s checking account within a brokerage account or into Series I bonds so it can grow over time and not lose value to inflation? Index funds within a Roth IRA would be ideal but until he has earned income, a taxable brokerage account might be a good option.
IRENE: I haven’t, but will look into it!
HM: You bet! I just bought the yearly max of $10,000 in Series I bonds from treasurydirect.gov. Because inflation is so high right now, the guaranteed return is over 9% range and you just have to leave the money for a year or more before touching it. The withdrawal penalty with Series I bonds is minimal too. It’s just the last three months of interest earned. Or you wait 5+ years and pay no fees upon withdrawal.
IRENE: This is great, thanks for the tip! I just put in an order for some I Bonds!
Now it’s your turn! What money tips did you pick up from your mom or the maternal figures in your life? Give them a shout-out in the comments below.