I grew up with a banker for a mom, so I have been taught about finance and investing since I was a wee one. Does that mean I manage money well all the time? Not necessarily. I don’t really think I manage it any better than the next working mother with a family to raise. But having those foundations has taught me how to prioritize my money, and as our family grows up and faces different financial hurdles, knowing that basic principle of where my money should go first has really helped us out.
My parents are models of financial responsibility. They scrimped and saved every penny while we were young so that they could pay for the things that really mattered. Like family vacations, priceless college degrees, insurance, and their own retirement. My family showed me growing up how to use your money to set the priorities of your family. And because of that, our family never wanted for anything of importance.
In our marriage and in our small family, Chris and I have been through financial ebbs and flows, just like every family next door. I remember some years when we thought we were kings, and some years we were as tight as a pauper. Usually, the largest ebbs and flows happened in years when something major was going on – we were getting married, or having a baby, or buying a house, or moving across the country, or changing jobs, etc. Now that those major milestones have been checked and we are stationary and satisfied (for the foreseeable future, anyway), our finances have settled down and are much more easily managed. Through it all, though, we have made investing in our future a priority. Like T. Rowe Price might tell you, we believe raising a family is like running a marathon. We don’t want to spend all we have now and not have enough in us to cross the finish line later. Part of that means that we invest first in ourselves through retirement accounts. But just barely below that on the priority list is saving for our children. What good is building a financially sound future if our children don’t reap the benefits? To achieve that goal, we immediately set up high-interest savings accounts for both our kids when they were born, and we set up automatic debits from our paychecks each month to roll into those accounts. Because we are starting so young with them, we don’t have to save too much each paycheck, so it doesn’t hurt us much. And having it done automatically off the top of our paychecks makes it all the less painful, too, because we don’t even see that money. We also deposit any money the kids receive directly (like from relatives at Christmas) into those accounts. If it’s their money, it should go into their account. Chris and I have set a goal amount, and when we reach that goal amount for each child, we plan to roll their accounts into mutual funds for their college, just like my parents did for me. What we really need and what we are currently looking into is a 529 College Savings plan through T. Rowe Price. These accounts are geared especially towards hard working parents who want to do the right thing for their children, but may not necessarily have a lot of extra income or know where to even begin. A quick sit down with a financial rep at T. Rowe Price can get you off and running, and feeling good about the financial future for your children. And what better investment can a parent make? I love celebrating my kids’ milestones. I’ve loved not missing out on every first they’ve had – first steps, first teeth, first bikes… I think that saving for my children now is just another way to ensure that those milestones keep coming. That I don’t miss out on their first dorm room, or their first apartment, or their first job application, or their first college graduation. And those firsts will lead to so many, many more in their lifetimes. If you aren’t investing in your children, I would make that a priority for your family in 2013. Find a good financial institution – like T. Rowe Price – who can help you set both short and long-term goals for your kids. It’s one of those very adult things you will do now that you will be thankful for later.