Parents of young children, and especially mothers, are
prone toward guilt. Parents feel that there is always something more
that they could be doing. Working mothers feel guilty they are not home
spending more time with their children. At-home mothers feel guilty
that they cannot afford to spend more money on their children. Guilt is
inherent in the job.
This guilt is compounded for mothers who are single
parents. They tend to have fewer financial options and greater demands
on their time and resources. Many of these mothers also feel conflicted
because they are told their children are put at a disadvantage by being
raised without fathers. Some mothers want to compensate for this "loss"
by spending more on their children, but they cannot afford to do so.
And the guilt increases.
The financial media is good at adding to parental guilt
by telling parents what they "should" be doing. For example, they
should be contributing 10 percent of their income toward retirement;
they should be buying whole life insurance; they should be saving for
college; and they should be creative enough to cut expenses.
It is our job, as financial planners and advisors, to
not increase the guilt that parents feel.
As advisors, it is clear that one of the most important
times for families to review their financial plan is when they are
starting to have children. These plans typically reflect a long list of
goals and concerns, such as:
* a desire to spend less time working in order to spend
more time with the young children;
* the need to pay child-care costs and other expenses
(classes, sports, camps, tutors);
* new housing needs;
* new car needs;
* insurance costs (medical, life, disability, liability);
* multiple one-time expenses (pregnancy clothes, new
furniture, baby supplies);
* unexpected expenses (infertility, adoption, children
with special needs);
* paying off old debt;
* building an emergency fund;
* saving for children's college costs; and
* ongoing retirement concerns.
Unfortunately, reality usually gets in the way of
reaching all these goals. The family often has limited financial
resources competing for multiple goals.
As financial advisors, what can we do to reduce the
guilt that parents feel while helping them reach their goals?
The most important task is to help parents prioritize
their goals and set timelines for reaching them. For example, we need
to show parents that paying off consumer debt makes more sense than
putting money into college savings plans. Second, we can let families
know new strategies for saving, such as using cafeteria plans to pay
for dependent care and medical needs with before-tax dollars. Third, we
need to remind parents to accept money offered to them from all
sources. Grandparents are often at a time in their lives that they want
to help their children and grandchildren.
Advisors are also in a unique position to compliment and
support parents of young children for how well they are doing in
reaching goals. Praise can be a wonderful motivator.
Finally, I believe there is a type of healthy guilt,
which causes people to take action--whether it be to clean windows or
finish important legal documents. Whenever we meet with parents, we
need to ask if they have completed their wills, named their
beneficiaries, and reviewed their basic insurance.
And we need to remind them to take care of themselves
first before taking care of their children. This is analogous to when
the oxygen masks drop on an airplane and we are instructed to put on
our masks before helping others. Parents--especially mothers--need to
remember that caring for their own needs is a crucial part of caring
for their children's needs.
Sharon Rich, Ed.D, is president of WOMONEY, a fee-only
financial planning firm in the Boston area that focuses on the needs of
women and their families. She can be reached at firstname.lastname@example.org.