savings

A Salute to Money Smart Moms

Today's mothers are in a perfect position to share their experiences in the workforce and as investors.

To celebrate Mother’s Day, I’d like to pay tribute to mothers everywhere who pass on smart financial habits and sound values to their children. In fact, it’s often moms who take the lead in teaching their kids about money. Dads are more likely than moms to say they feel uncomfortable about having money talks with their children, reports the 2020 Parents, Kids & Money Survey from T. Rowe Price.

Why are mothers more likely to talk about money with their kids? Possibly because they spend more time with their children running errands and piloting the carpool—convenient opportunities to talk about everyday finances in a low-key setting. Today’s mothers are also in a perfect position to share their own experiences in the workforce and as investors. It’s im­portant for your kids—especially your daughters—to know about work you do outside the home, how you balance work and family life, and how you save and invest for future events, such as college and retirement (see How to Raise Money Savvy Girls). And kids are never too young to learn, as long as you teach them in an age-appropriate way.

My friend Mary has taken this to heart. An interior designer who prefers to work as an independent contractor rather than an employee, Mary started passing along her en­trepreneurial spirit to her 13-year-old daughter, Ruby, when Ruby was only 8 years old and had set up a stand selling extra plants that had sprouted in her mother’s garden.

Inspired by her early success, Ruby has been working at a local farmer’s market since she was old enough to understand and handle money. “She meets people, learns how to make eye contact and does math on her feet,” says Mary. With her money, Ruby is expected to buy the extra things she wants while Mary takes care of her needs. She also saves half of what she earns, and every six months she and her mother transfer her savings to a custodial brokerage account that’s invested in a mutual fund.

Mary invests in a couple of rental properties, and Ruby knows that tenants pay rent to live there. Mary hopes that when Ruby eventually taps her own savings, she uses it “to purchase an asset such as real estate rather than a liability like a car.”

A personal note. I have a special interest in teaching kids about money, because I’m the author of Raising Money Smart Kids. While I was working on the book, I used to bounce ideas off my own three children as they were growing up. They’re all married now, and I asked them what they learned as kids that has stuck with them as adults.

“One thing you taught us was that money should always be part of the conversation so that you’re never afraid to deal with it,” says my daughter, Claire. “This comes up with me when I do our taxes every year.” For son Peter, “giving money at church was a big thing that made an impression on me. I got used to the expectation that you contribute each week, even if it isn’t a lot, and I still do.”

It’s heartening to know that my kids are passing along the lessons they learned to their own children. “We were brought up knowing that money has value beyond buying ‘stuff,’ ” says Claire. “We knew it also paid for things like our education, vacations and everything else we did. Thirty years later, we can see that it pays for you to have a nice retirement. This is something I’m trying to make my kids realize and think about.”

When son John’s 5-year-old daughter, Sullivan, received a $50 check for her birthday, John’s wife, Sara, suggested that he take Sullivan to the bank to put $40 into her college fund and keep $10 cash to buy something special. Says John, “Sara asked me, ‘Wouldn’t your mother agree with this plan?’ ” Yes, I would!

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
9 Great Growth ETFs for 2022 and Beyond
ETFs

9 Great Growth ETFs for 2022 and Beyond

These growth ETFs offer exposure to higher-risk, higher-reward stocks while lessening the risk of a single stock torpedoing your returns.
January 18, 2022
The 10 Best Closed-End Funds (CEFs) for 2022
CEFs

The 10 Best Closed-End Funds (CEFs) for 2022

These high-yielding CEFs won't just significantly boost your portfolio income. They'll also allow you to buy their underlying stocks and bonds at a di…
January 12, 2022

Recommended

Make a Plan for Your Parents' Care
Caregiving

Make a Plan for Your Parents' Care

The ideal time to begin talking with your parents is before they need care.
January 24, 2022
8 Facts You Need to Know About Stock Market Corrections
Markets

8 Facts You Need to Know About Stock Market Corrections

Scary as they are, drawdowns are a normal part of the investing process. Having a financial plan in place and sticking to it is every investor's best …
January 23, 2022
22 Products You’ll Waste Money Buying at Warehouse Clubs
Costco

22 Products You’ll Waste Money Buying at Warehouse Clubs

We talked to shopping experts to find out which products shoppers should steer clear of (and why) at warehouse clubs Costco, Sam’s Club and BJ’s.
January 22, 2022
Is the Stock Market Closed on MLK Day?
Markets

Is the Stock Market Closed on MLK Day?

Both the stock markets and bond markets will have Monday off as the nation honors civil rights leader Martin Luther King Jr.
January 15, 2022