11

Money

Affording Working Parenthood—Now, and Longer Term

Unless you’re a lottery winner or the majority shareholder of some wildly successful startup, working parenthood is going to—or already has—put a major crimp in your budget, and its costs are going to keep hitting you in several different ways. Parental leave may cause a short-term dip in your income. Good-quality childcare can come with a hefty price tag and that’s on top of all of the regular costs of childrearing (the baby food, the clothes, the bigger apartment, and so on). Working fewer hours to spend more time with the kids can also lead to lower pay.

And even if you pride yourself on being particularly money-savvy and are lucky enough to have a solid, stable income, you’re still going to have to wrestle with difficult working-parent money questions, large and small: Should you take that higher-paying job, even though it means more time away from home? Is that after-school program really worth it? Can you afford any help at home, with so many other bills to pay? Of course, there are the emotional costs, too: when you’re working all-out every single day to provide for your family but keep finding yourself short on cash or lost in a maze of numbers, it’s demoralizing and disconcerting.

We can’t magically add a bunch of zeros onto the end of the current number in your bank account. We can help you maximize the resources you do have—and cut a path through that mess of bills and feelings and toward a place of greater working-parent financial insights, capability, and calm. To put together your own best child-plus-career money system, the very first step is to understand what’s coming.

The Three Financial Phases of Working Parenthood

The whole eighteen-year timeline of working parenthood seems to have the same financial headline: Major Cash Outflow. But peer in closer, and you’ll see that working-parent-related money pressures vary meaningfully from one phase of your child’s life to the next. If you’re aware of those differences, you can prepare for them, make better in-the-moment money decisions, and avoid common and costly mistakes.

Economic Phase One begins the moment you learn that you’re expecting your first child and ends the day he starts regular care. It’s a sort of financial honeymoon; you get to experience the joys of parenthood without having to bear the brunt of ongoing, month-to-month workparent costs. It’s also time to get a jump on what’s coming—to think in detail through your working-parent budget; get smart and file for any corporate or government working-parent benefits, like childcare tax credits or subsidized backup care; start building some extra financial cushion, if possible; and get confident on ways to handle the various money challenges ahead. If you’re in Phase One now, try “budgeting as if,” depositing the estimated costs of daycare, backup care, and so forth each month into a dedicated Workparent Reserve bank account that you can tap into as needed later. Then, when the baby actually arrives or daycare starts, you’ll already be accustomed to workparent spending, have some small bit of financial wiggle room, and have a feeling of I’m on this and I get it self-assurance.

‘‘I spent a lot of time looking at my finances, and I got a lot of gear used. I realized it wasn’t the baby that was expensive, or the gear; it was primarily the care. When you’re looking at the cost of care, focus on the length. Think, ‘When will this end?’ and plan for that expense. And also, let go of any guilt around whatever else you’re spending, or can’t buy. Kids grow up in all kinds of situations, and they’re fine, in fact they thrive, as long as their basic needs are fully met.”

—Kayla, academic program director, mother of one

‘‘If I could go back in time, I would have tried to save more. I’m a born, bred, and buttered city dweller, but living here is expensive, particularly as a single mom.

When my son was born a friend gifted me a year’s worth of free legal advice. I was able to get a will set up, and life insurance. And instead of a baby registry, I asked friends for contributions toward childcare. Having that security felt so good.”

—Rachel, event producer, mother of one

Economic Phase Two starts on that first day of care and lasts until each of your children is enrolled in school full-time. Let’s not mince words: this may be the toughest financial patch of your life. You’re most likely still earlier-on in your career, your earnings haven’t yet peaked, and you may be paying off student or car debt or trying to save for a house when—wham!—suddenly you’re also hit with the costs of care for one or more children. During this period you may find yourself panicked about the possibility of completely going off the financial rails—or having to take drastic action (taking on a second or third job, selling the house, accepting help you normally wouldn’t, etc.) to avoid that derailment. You may also:

  • Go into economic siege mode, shutting off any and all other spending that could make working parenthood more feasible in the short term
  • Develop “what the heck, we’re hemorrhaging cash anyway” habits
  • Decide to leave your career entirely because it just feels too expensive to work
  • Lose sight of the longer term, fall into a “we’re never going to get anywhere financially” mindset, and become overwhelmed and depressed

Don’t make those mistakes, though, because the key thing to bear in mind about Phase Two is that it ends. In Economic Phase Three, which starts on the day your child begins school, you get to trade in full time daycare costs for after-school-program fees—which, financially speaking, is like getting a huge raise. Then, by the early teenage years, care costs should largely or completely disappear, which will feel like yet another bump in your income. Note that while expenses go down during Phase Three, they’re usually much lumpier: when school is out for the summer, for example, and your child needs daily care, your working-parent outlay will spike. Beware also that the money choices you do face during this phase may have an uncomfortable, “my future versus the kids’ future” quality to them. Just as retirement planning and mortgage pay-down start becoming more important, you’ll start feeling more pressure to invest in the kids’ extracurricular activities, and to save for their longer-term education.

With that high-level, no-holds-barred view of how your working-parent financial story is likely to unfold, how do you feel? If you’re swallowing hard and thinking, whoa, there’s some tough, lean years ahead, you’re not alone. Again, the critical thing to take away here is that you’re in a changing game—and with a better understanding of how the financial demands of working parenthood will shift over time, you’ll be in a better position to start putting together your very own plan to meet them.

Setting the tone

You started picking up your own money feelings and habits from the adults around you early on in your life. Now, your child is taking her money cues from you: watching your body language when, after a long day on the job, you sit down to pay the bills; gauging your reaction when she asks for that new toy; observing how you check, or don’t check, the price of each item that goes in your basket at the supermarket; taking in how you talk about your role as a working parent.

Be aware of the messages you’re sending—both deliberate and inadvertent—about earning and spending money, and about the trade-offs needed to make your working-family budget come together. Make sure those messages align with how you want your child to think and feel (Safe? Frugal? Comfortable? In charge?) about money now, and as an adult and working parent one day herself.

Where Do You Stand?

Once you’ve gazed down the financial road, it’s time to confront your personal financial truth: to get a full-frontal, nonretouched view of your current money situation; to calculate your Total Cost of Working Parenthood (which we’ll do in table 11-1); and to figure out what you need to do to make those two things come together. That may sound painful, but don’t cringe. There’s no review-every-receipt process ahead, or evaluation and finger-pointing about past choices; what we’re doing is focusing on the resources you do have and how to make the most of them. As we work, we’re going to leave negative feelings to the side, focus in on the line items most important to you as a working mother or father, and determine some real and useful next steps—and we’re going to move along quickly. In fact, these next two sections should take you no more than about ninety minutes. All you’ll need to complete them, and to become more on-it and empowered in terms of your working-parent finances, is some peace and quiet, a computer or tablet, access to your personal financial records, and the willingness to look at your money situation with fresh and unbiased eyes. Ready? Then let’s dive in.

Our first task is to understand what you’re earning and what you’re spending in the normal course of business. If you already keep detailed financial records in one central place, like on a spreadsheet or in a personal-finance app, by all means, work from there. If not, no problem: just grab your most recent annual tax filing and pull up your last month’s bank statement and credit-card bill. (The beauty of the more-cards/less-cash economy is that our financial institutions now do most of our personal financial record-keeping for us.)

With that information in front of you, you should be able to fill in the first two full columns in the Working-Parent Financial Dashboard (table 11-1). These portions of the dashboard let you understand, in one quick glance, what you’re earning each month and what you’re spending, before any items specific to working parenthood are factored in. Feel free to customize the dashboard to meet your particular financial picture, and don’t worry if you’re not able to calculate every number down to the penny or if you have to use a little guesstimation. This is a decision-making tool, not an accounting exam.

Now let’s focus on that third column: the one labeled Working-Parent Costs. Here, we’re going to calculate the total monthly expenses specifically attributable to the fact that you’re combining children and career. We’ll look at direct, visible costs—like childcare—and also at indirect or hidden costs, like the overtime pay you’re missing because you need to be home by 6:00. Do your best to fill in each item, even if you have to approximate. Be honest and thorough.

With all three columns completed, take a step back and—without touching your pen or keyboard or doing any more math—look at the whole, and ask yourself:

  • Is there anything here that surprises me? Am I spending more or less than I imagined in any one category?
  • Is my money spent in a way that honors what I see as, and say is, important? Should I reallocate where some of my cash is going, even if I spend the same overall amount?
  • Roughly how much of a “workparent raise” will I get when the economic phase I’m in right now ends? In other words, how much more will I be earning (in overtime, commissions, and so forth), and how much less will I be spending (on care, backup sitters, etc.), as my kids grow up?

There are no right, wrong, or necessarily even precise answers to these questions. And in fact, they’re not ones you’ll likely be able to answer neatly or straightaway. In nudging yourself to think through them, however, you’ll develop a complete sense of your working-parent finances: what real choices you’re making, what’s working and what isn’t, how your money is matching your life and values, and how your financial picture will change in the near term. You’ll come to understand where you are today—and the important directions you need to move in.

The quarterly review

To stay on top of your working-parent situation as it changes over time, think about scheduling an every-three-months financial review. Those quarterly check-ins will be just enough to let you feel, and stay, in full control of working-parent money matters, without undue time and hassle.

Keep these sessions brief, and during each one, repeat the financial dashboard exercise (see table 11-1), but with an eye toward any recent trends or upcoming changes. Have there been any new or unusual expenses? Will the switch to full-time school, and the savings that that brings in daycare costs, mean you can put more into your retirement accounts? How much will day camp or another care alternative cost this coming summer, when the kids are out of school? Be sure to leave each session with specific, actionable next steps: if that includes setting aside money for day camp and increasing your retirement contributions, both of those items go straight onto your Monday-morning to-do list.

Your Workparent Budget

We’ve been getting the lay of the budgetary land from ten thousand feet up, but now it’s time to swoop down to ground level. Go back to the line item at the very bottom of the dashboard, your Total Working-Parent Budget Surplus or Shortfall. Calculate it by subtracting your total monthly expenses and total monthly cost of working parenthood from your total monthly take-home pay (Box A minus Box B minus Box C). If this number is negative, think of it as a hole: you’re going to have to earn more money, use your savings, borrow, or cut your expenses to plug it. If it’s positive—if you have a budget surplus—think of it as a wallet with money inside you can choose to save, spend, or use in a way that helps make working parenthood easier.

‘‘It’s a catch-22 with shift work. You can do a lot of overtime, but the more you earn, the less you’re at home. I have to ask myself, ‘What is the bigger paycheck for?’ We just put an addition on the house, but the boys won’t be five and three forever. It’s not an exact science; we’re constantly trying to balance it. I’ll work a bunch of OT until my wife just kind of looks at me—and then I know to pull back.”

—Mike, police officer, father of two

One trick for make cutting back a little easier

Of course you want to be budget conscious—but the time spent hovering on whether or not to spring for that new cell phone, and on feeling guilty about the cash you drop on lattes, is much better used thinking about other, bigger things: like career advancement, your own well-being, or the kids’ education.

To save money and keep yourself out of the rabbit hole of financial overthinking, try making categorical cuts: simple, specific, one-and-done decisions about when and where to curb your outflow. If you have a longtime personal policy of never buying clothes unless they’re on sale, or only buying used cars, then you’re already using this strategy effectively. Now just apply it to your working-parent budget: for example, you may decide that no matter how busy you are, your family will never eat out on weeknights, or that you’ll only allow the kids to do one fee-based extracurricular activity per semester. The key words here are never and only. Using them turns vague fiscal intentions (“spend less on eating out,” “don’t go overboard on the kids’ activities”) into fiscal rules—ones that protect you from overspending and from having to expend time, thought, and emotion wading through hundreds of one-off money decisions.

Now, with that macro view of your finances, and with awareness of the precise amount of your surplus or shortfall, you’re ready to make any needed financial decisions. If you were surprised by how much you were spending on entertainment, or by how little you were investing in health and wellness, for example, you can reallocate. If you’re running a surplus, you might decide that it’s OK to hire a regular Saturday-night sitter, after all. If your daycare costs are creating a shortfall, you can grit your teeth and go back line by line over your expenses and figure out where else to cut.

Two items worth spending on

Even if money is tight, don’t ignore two financial safety nets important for every working parent: disability insurance and life insurance. Even if you’re young and healthy today, you could—as terrible as it is to think about—face a health problem or have an accident at any time. If you do, and if that means you’re no longer able to work to support your family, the financial impact could be devastating. Imagine your family budget—the same mortgage, childcare expenses, and car payments, the same hopes and dreams for your kids—but without you, and without the money you’re earning now to make it all happen.

Whether you’re an expectant parent or have teenagers, don’t give these items short shrift. Set aside time to understand any coverage your employer offers. Look at what your options are, what they cost, what payouts would amount to in the event of illness or injury, how that money would be combined with any government-paid disability benefits—and most important, figure out how to enroll. If you don’t yet have a life-insurance policy, set a timeline for getting one in place. You may be able to get a low-cost policy through work, or may need to do more research and go through an independent agent or broker.

Ideally, your family will never need either of these protections—but in the event they do, the money you invested in them will be the best you ever spent.

If you are in shortfall territory, this part of the budgeting process won’t be any fun. In fact, it may be downright scary. You may realize that working-parent expenses are going to force you to stop saving, or spend all your savings, or move back in with your own parents, none of which you want to do. You may roll your eyes and think, why did I ever even start this budgeting exercise if it was going to point me to such painful realities? But the realities were there all along: what you’re doing now—rightly and responsibly—is confronting and managing them. You’re driving the same car, but can now see the dashboard, which lets you set your financial direction and create the very best life you can for the kids. And crucially, you’re forecasting—looking out the car’s windshield and at your money situation today and what it will look like down the road.

Putting it all together: Devin’s story

‘‘We were living in adult Never Never Land. We rented an apartment downtown, in a new building with a pool. I would spend my tips on whatever I wanted. We had student loans and credit-card debt. Then my wife brought up the idea of having a baby.

I’m very pragmatic, and I remembered seeing that personal-finance TV show with the segment where viewers call in and ask, ‘Can I afford it?’ We went to a financial adviser, who looked at everything we had and owed and told us, ‘On paper, right now, no, you can’t afford to become parents.’ Then he pointed out that no one really can—it’s such a huge expense, and there’s never really a right time to take it on.

When we were expecting, we made a really careful budget. We changed our lives, drastically. We moved in with my wife’s mom for a year, and paid down our debts. We got ourselves to the zero-dollar mark—a total financial clean slate. We gave up our city-kid lives permanently and bought a condo in a much cheaper area. I changed how I earn my living, too, moving to a new salon where the environment is less fierce, where there’s a happy clientele and it’s OK to have a family. I’m still doing my thing and love this profession. I just figured out how to make the earnings part match up better with being a dad.

I had always assumed that you had to be in perfect financial standing before having a child. It’s not easy, but you can get your act together while you’re on this journey.”

—Devin, hairdresser, father of one

Common Workparent Money Dilemmas, and How to Think Through Them

No matter how carefully calibrated our budgets, as working moms and dads we all find ourselves grappling with tough, seemingly unresolvable money questions. Each one you face will be completely personal and unique: to your career, your family, your income, your feelings. Most of them, however, will be variations on the Big Four Workparent Money Dilemmas. Let’s explore each one.

Guilt-spending

You’ve been traveling for work all week, so you stop by the airport gift shop before your flight home to buy your five-year-old son a T-shirt. Or with both you and your partner working in superintense jobs and missing so many family dinners, you decide to make each of the kids’ birthday parties serious extravaganzas.

In other words, you’re guilt-spending.

Guilt-spending is a trap that nearly all working parents, regardless of wealth or income, fall into at some point. It resembles spoiling, with the critical difference that it comes from a well-intentioned and deeply sincere place. You love your children completely, and you’re determined to prove that love—to the kids, to other people, and to yourself—even when your job keeps you away.

The problem with guilt-spending is that it creates a “race to the bottom” for both parent and child. For a very brief period after you spend the money, your child is happy (look—a new T-shirt!) and your sense of guilt is eased. Then those good feelings dissipate, and the cycle starts again. And this time, it’s worse: you feel just as crummy and anxious as you did before, but your bank account is lower, and your child has been conditioned to expect—even demand—expensive things she doesn’t need.

As you reach for your wallet to pay for treats, gifts, and “stretch” items, ask yourself: Who is this purchase really benefitting, and why am I really making it? Then think about other, less money-based ways of showing your love. Send your five-year-old a postcard (small children love to receive mail); host a small, relaxed birthday celebration in the backyard—and spend every minute focused on your child, rather than on the hordes of guests. Your time and attention are more valuable to your child than anything you buy them.

How am I supposed to prioritize my spending, when every item (daycare, retirement savings, my mortgage, those college-prep classes, etc.) is so critically important?

The current, conventional-wisdom answer to this question, borrowed from the language of airplane safety videos, is to “put your own oxygen mask on first”—meaning, pay attention to and prioritize your own personal financial needs ahead of your kids’. That’s certainly a vivid image, and the message on financial self-care is well taken. Yet it’s very general guidance, and thus hard to use in the day-to-day. And let’s get real: as a devoted mother or father, you’re never going to skimp on your children’s fundamental needs to cover your own. So let’s stay out of the realm of metaphors and get much more honest and specific.

One simple but usable way to think about your workparent financial priorities is to categorize them, and then give those categories names, an order by rank, and percentages, as demonstrated in table 11-2. In this table, major items from your working-parent budget have been put into suggested groups, and those groups into a suggested sequence, with must-do/must-have type expenses up at the top and if you’ve got the extra money items at the bottom. Each category prompts you to think through a rough, How much of my money should be going toward this? percentage allocation.

TABLE 11-2

A Guide for Making Working-Parent Financial Decisions

Priority

Key components

Allocated percentage of my budget

1. Short-term security

•  Safe and adequate childcare

•  Housing

•  Food

•  Transportation

•  Emergency-reserve savings

What (realistic) percentage of your take-home pay should be spent on each category?

2. Long-term security

•  Insurance

•  Debt repayment

•  Retirement savings

3. Investment in the future

•  Ongoing professional education, certifications, and networking

•  College savings

•  Contributions to any other investment portfolio

4. Lifestyle, interests, and fun

•  Sports, activities, and hobbies

•  Vacations/travel

•  Charitable donations

•  Clubs and memberships

•  Larger home, newer car, more clothes, etc.

The first category in this stack is—no surprise—the kids’ immediate welfare and safety. Next comes the family’s financial security, both today and into the post-parenting years. With these more basic and pressing needs covered, investment-spending on the future becomes possible: you can put money toward your kids’ education, toward your own professional advancement, and into other assets that will put you on a stronger economic and personal footing over time. With any money left over, you can (here and there) spend on what makes you happy—whether that’s a new car or piano lessons for the kids. When you’re facing tough trade-offs or forced to prioritize a specific expense, you now have a basic framework for doing so—a way to sanity-check your thinking and make sure you’re generally making sensible and consistent financial decisions.

Note that this is a sample, suggested framework—one you’ll want to make your own, and adjust over time. You might live in a very high-housing-cost area for right now, and need to devote much more of your budget to Category 1; or you might decide that, come hell or high water, you’re going to pay the kids’ educational expenses, moving that commitment up in rank from where we have it, in Category 3. Try marking this table up with your own additions and tweaks; you know what’s most important, and you’ll rejigger accordingly. Then, the next time you’re confronted with a tough money decision, pull the framework back out and use it to challenge, and validate, your own thinking. If you find yourself stretching to pay for Category 1 items, but spending on Category 3 and 4, or putting too much money into Category 2 and none into 3, you’ll know that it’s time to rebalance.

What if working doesn’t put me ahead financially? I hate the thought of just handing my paycheck over to a sitter.

Nobody wants to be on a financial treadmill, particularly when the reward for hopping off is getting to spend more time with the child you love. That said, before you make what seems at first blush like a completely sensible and responsible decision, try taking a wider-lens view.

Maybe today you are spending 100 percent of your take-home pay, and then some, on childcare. But if you keep working, your earnings are likely to go up over time. Maybe you’ll get a promotion, a raise, or a new gig that pays more and don’t forget, as soon as you exit Economic Phase Two, the costs of childcare will go way down. Very soon, the equation will change, and the moment it does, it will make tons of dollars-and-cents sense to work. And if you do stay in the professional game, you’ll be building up other important assets, like your résumé, your experience, your network, and your retirement-plan balance. On the other hand, if you decide to bow out of the workforce, it may be hard to get back in; you may have to take a significant pay cut when you do. And if your partner happens to lose his or her job during your career break, it may lead to serious financial strain.

There’s nothing wrong with a short-term detour off the professional highway, and taking one can come with some wonderful benefits. But if you’re rushing into a quit-my-job decision based only on the arithmetic of your current cash flow, take the time to really think things through. Staying on that treadmill may be both a good insurance policy and a wise investment.

For specific advice on how to plan and take a career sabbatical with confidence and with a clear way “back in,” refer to chapter 17, “Time Off.”

Can I take a more flexible job, even if it comes with lower pay?

The decision to “go flex” hangs on a number of different factors, including your career ambitions, your family situation, and what line of work you’re in. In chapter 15, we’ll unpack all of your flexibility options, and how, when, and why to access and use them. From a purely financial perspective, though, taking lower pay in exchange for more control over your workload and schedule is fine, as long as four key conditions are met:

  1. There’s no major Category 1 or 2 financial impact to your family as a result of the switch—i.e., working a little less doesn’t compromise your top-line financial priorities
  2. You’ve determined that there’s no way to get the flexibility you’re seeking in your current job, or in another one that offers the same level of pay
  3. You don’t let yourself get taken advantage of, for example by accepting a three-day-per-week pay package but really working four
  4. The door swings both ways—in other words, you could relatively quickly and easily reach your prior earning level

In such cases, you should feel comfortable with the flexibility-versus-income trade-off. If you do so, though, go back and rework your dashboard, keeping a realistic eye on any needed budgeting changes.

Is it OK to spend money on products and services that make working parenthood a little easier to handle? I feel guilty when I do.

If you were raised in a family with finite resources or you’re used to a do-more-with-less professional environment (as nearly all of us were, and are), then spending money on “luxury” items like taxis, a housecleaner, that bulk-laundry service, food takeout, next-day delivery of household supplies, or a special kitchen gizmo that steams and zaps any fruit or vegetable into baby-ready puree may—even if it helps bridge the chasm between your professional and personal responsibilities—feel strange, self-indulgent, even wrong.

Of course you can’t hand over money you don’t have, and you’re not going to make dumb, self-defeating decisions like skimping on childcare just to avoid doing laundry. But let’s go back to a big, fundamental point we covered at the very beginning of this book: working parenthood has only gotten harder in the past fifteen years—and nothing and no one has stepped into the fray to help individual mothers and fathers make it happen. If you’re pulling long hours on the job and have the $50 to spend, using that laundry service isn’t a luxury—it’s just plain prudent. If your great-grandma who lived through the Great Depression saw what you’re going through as a working parent today, she’d tell you to spend that money.

To get yourself a little more comfortable with the “outsource where possible” approach, and at the same time to keep a nice tight grip on your financial steering wheel, go back to your working-parent budget, look at your discretionary spending and your surplus or shortfall, figure out how many working-parent dollars per month you can dedicate to make-it-easier products and services, and then hold yourself to it. If you find $75 per month in making workparenting easier dollars, then you spend all $75, every single month, confidently and guilt-free.

Making Money Matters Logistically Easier

Having a clear, realistic working-parent budget is important, but so is simplifying and streamlining the actual block-and-tackle operations of your financial life. When you’re this busy, you never want to spend what could have been a relaxed evening with the kids hunched over a spreadsheet and a stack of bills, or to find yourself without any cash on hand to pay the emergency sitter. Happily, whatever your finances look like, you can probably cut down on money-management logistics—and on the time and effort you put into them. A few good approaches:

  • Consolidate.  If you’ve got multiple checking, savings, investment, or retirement accounts, consider merging them and maintaining just one of each. The more accounts you have, the harder it is to understand your true financial picture, and getting so many different statements each month creates clutter and distraction. If you’ve moved jobs or changed family structure within the past five years, there’s a high likelihood you’re hanging on to some legacy accounts. Go as streamlined and simple as you can.
  • Automate.  Put all your regular monthly expenses—including the daycare bill, your daughter’s violin lessons, and the money you’ve committed to setting aside toward college savings—onto a direct-debit plan or autopay. Avoiding those repeat manual transactions will save you significant time. Next, activate the “account alert” features your bank and your credit-card company offer. With automated updates, you won’t have to log in as often to check your spending or balances.
  • Go completely electronic.  If you’re still receiving paper statements or bills, or if you’ve handwritten more than a couple of checks over the past year, it’s an opportunity to streamline. Opening paper statements and then feeding them into a shredder is a complete waste of your valuable time (not to mention no good for the environment). Log in to each of your accounts and authorize e-notification. Ensure that you have a cashless system worked out with the Village, also—an app that lets you pay the sitter electronically, for example.
  • Stash cash where you’ll need it.  Even in our superefficient, cashless world, you’ll still need it. Always keep small amounts of money in small denominations in the kitchen, at the office, in the diaper bag, in the car—and you’ll always be ready to tip the pizza-delivery guy on the night you don’t have time to make the kids dinner.
  • Ensure all caregivers have access. If you’ve hired an in-home caregiver, you’ll need to make sure that she always has enough money on hand to cover day-to-day expenses (gas, food shopping, outings with the kids) as well as any emergencies (that sudden taxi to the pediatrician’s, getting the pharmacy to deliver the prescription). One smart way to do so is by giving her a refillable debit card: you’ll be able to add money to it at the touch of a button, from anywhere, as needed (during a meeting; from an airport, during a layover), and because you control the account, you’ll easily be able to monitor any spending. Likewise, and for your own peace of mind, you’ll want to make sure that your child’s Third Parents and any emergency care providers have adequate money, too. Provide each of them with a similar debit card, tuck some cash into your child’s emergency backup bag, or both.

Is it time to consult an expert?

Many of your working-parent financial questions—if and how to claim parental tax credits, set up college savings accounts, use pretax dollars for qualified childcare expenses, and so on—can be answered quickly and for free via your organization’s intranet or HR team or by scanning the personal-finance educational materials and tip sheets published online by most of the major banks and brokerage firms.

That said, if you have complex finances, if your taxes are time-consuming to prepare, if you own your own business, or if you’re working through a financial life transition (such as divorcing, vesting in a stock plan, or receiving an inheritance), then enlisting the services of an experienced professional adviser or money manager may make sense. That person can help explain technical tax issues, help you create a plan for retirement savings, or help you see around some of the important financial corners up ahead—which can translate into both more time with your kids and more money to invest where it really matters. Be aware, however, that the quality of the “expert” advice out there varies widely, and that money-management services may come with varying fees. You may also find yourself pushed into certain decisions, accounts, or investments that yield your adviser a tidy commission but aren’t to your own benefit.

If you do decide to work with a financial adviser of any kind, make sure to do thorough research on the adviser’s background and qualifications, and on specific services offered. Ask any candidate point-blank how much experience he or she has in advising working-parent families. If you do retain professional help, remain an informed consumer and be sure to make your own money decisions. Your buck always stops with you.

Real Parents, Real Returns

When you hand over hard-earned money, you want to get something for it, whether that’s new clothes, a holiday, an apartment, a share of stock, or an education—something that satisfies a need, that gives you pleasure, that you can hold on to, or that helps you move forward in some way. But now, as a working parent, it may feel as if you’re shelling out huge amounts just to run very quickly in place. Paying that daycare bill means that you can go to work and earn money to pay the daycare bill and then get up tomorrow to do it all over again.

Yet the money you’re spending now to fit family and career together isn’t wasted, and it doesn’t disappear. When your kids are safe and well taken care of, it frees you up, both practically and mentally, to deliver your best at work. As you achieve, and as your career progresses, you become better able to provide for your family, both today and in the future. The money you’re spending now is a powerful long-term investment.

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