The post Mom to Mom: What I Wish I’d Understood About Money When My Kids Were Younger is sponsored by the Arkansas 529 Education Savings Program. All words and opinions are my own.
The word alone used to feel so off-putting up until about 6 months ago, let alone actually taking action on the goals associated with them. I’m that girl who took accounting and finance classes in college (YAWN), but who just memorized the information enough to pass tests before quickly forgetting it. I always knew to save money and not spend beyond my means, and debt was a 4-letter word for us growing up. Beyond that, though? Financial literacy seemed like the Wild West.
Over the past few years I’ve been slowly learning that financial literacy doesn’t have to be scary. With the depth and range of knowledge available online (and through my local library) I’ve begun to teach myself a little more about how to achieve the seemingly elusive financial freedom. In fact, rather than being scary, learning about this is FUN! Not at all like the accounting classes in college, because when you learn about personal finance and truly become involved what’s really happening is you’re saying YES to your dreams.
Over the first few years of our marriage I had no problem letting Nate be the one to take charge of our finances. I mean, he knew more about it and seemed more comfortable doing it, so why not? As we’ve grown older though I started to wonder (somewhat morbidly) what would happen if something tragic happened to one of us? What if I found myself needing to know everything about our finances…but I didn’t? What if…?
As a woman I’ve always known that lower wages and time off to care for children or aging parents already put me at a financial disadvantage. Statistics show that we typically outlive men by 7 years; 80% of women die widowed, whereas 80% of men die married. They also show that 50% of marriages end in divorce, another sad statistic that impacts our financial health. Both scenarios leave women in charge of finances, and if we have no experience or understanding then our standard of living (and all those dreams we’ve had) could very likely plummet.
While that information is bleak and depressing, it is reasonable to live in a state of hope while still being prepared. After being faced with the economic disaster caused by COVID-19 I snapped to it and really started to educate myself about financial health. There’s still a lot to learn, but I feel significantly more confident in what to do in any number of scenarios. My only regret is that I didn’t start learning these things (and taking action) sooner! From one veteran mom to another, here are 5 simple things you can do TODAY to start taking control of your financial education!
- Make a list of ALL accounts. Anything that you spend money on, invest money in, or pay toward needs to be on this list. Mortgages, car loans, student loans, investments, health insurance, car insurance, disability insurance, life insurance, credit and debit cards, checking accounts, savings accounts, etc. Include account numbers, login information, contact information for each company or broker. Some of this may take a little time and effort, but once you have all of the information in one place it will be significantly easier to track.
- Put all essential documents in a safe space. Birth certificates, social security cards, marriage licenses, wills, documents for your assets (like your home or car), passports, and more should be stored in a protected box in a secure location that you can easily access. This simple organization (and I use that term loosely) can make all the difference as you open accounts, fill out forms, etc.
- Have some serious conversations. While there will be some discomfort to these, they don’t have to be hard. First I recommend talking to your spouse or significant other about where you stand financially, then dream about where you want to be. What are your roadblocks right now? What could they be in a few years? What do you ultimately want to do down the road? Some of these dreams and goals may change, but the two steps in getting anywhere are knowing where you are and then knowing where you want to go. Second, talk to other women in your family or life about their experience. Having someone who has gone before you will be so helpful in helping you think through next steps. Additionally it may open your eyes to circumstances, tips and tricks you may not have considered before. Finally, have a frank and honest conversation with yourself. Why are you not where you need to be? What are some lies that you’ve bought into regarding money? Are you willing to do the work to change that?
- Create a list of goals. I realize that I am more prone to creating goals than a lot of people, but I’m also a firm believer that they provide incredible direction in every area of our lives. I also recommend setting multiple goals; I have retirement goals of course, as well as goals for college savings, bucket list vacations, dream home, etc. Maybe one that you have is taking a course that could help you reach another life goal…make sure you include those as well!
- Start somewhere. Take the time to research how to start investing in ways that will bring you to your goals, and then take action. I just want to give it to you straight: the longer you wait, the more likely you are to procrastinate and waste precious time that could be spent making a positive impact on your family’s future. You are completely capable of making a choice today that will help you down the road!
In our marriage one of our biggest dreams has been to send our kids to college without accruing debt from student loans. I see now what a massive blessing it was that our parents had the foresight and ability to do this for us, and how much it could help our boys in the future. It feels so daunting, though, as the cost of tuition steadily increases at the same time that we have to start thinking about braces, sports and more.
One of the biggest ways we can reach this goal is by setting up an Arkansas 529 Education Savings Program. Mom to mom? Rather than saving for college through a simple savings account at our bank for the past 8 years, we could have been saving in an Arkansas 529 account with significant tax advantages, age-based options, and more. Besides the fact that I wish I had known earlier how non-scary finances are, I REALLY wish I’d started saving for college with an Arkansas 529 account when my children were newborns.
The good news is setting up an Arkansas 529 education savings plan for my sons is something I can do TODAY for a minimal investment and minimal effort. Then the plan just goes, without me having to make a conscious effort every month, and will continue to provide peace of mind while setting us all up for a brighter future. (P.S. This is a great feature for grandparents too!) I can do it today…and so can you!
To read and learn more about the Arkansas 529 Education Savings Plan (and sign up!), I recommend spending some time on their website.