While I’ve always been pretty financially conscious (you don’t become a personal finance writer by not caring about these kinds of things), it wasn’t really until I had a kid that I started putting some of the financial advice I’ve always heard into practice. Plus, I picked up plenty of new tips.
Here are five of the biggest things I learned about my finances after I had a baby. They don’t only apply to people with kids, though. In fact, I wish I’d taken some of them into consideration a little bit sooner.
1. Sometimes it’s OK to Spend Money to Save Time … or Your Sanity
While I’d never advocate for frivolous spending, I’ve learned that sometimes it’s OK to spend a little bit extra on something that will either help save time or make your life just a little bit easier. In my Mom Life, that has taken on all kinds of forms: From big-ticket items like forking over the cash for a nanny (as a freelancer I could just as easily be stingy and try to fit all my work into nap times, nights when my husband gets home or the weekends, but why make it so hard?) to deciding to finish our basement (a large chunk of cash upfront, yes, but with all the visitors we have coming to see the baby, and all the toys that are steadily taking over the house, this is a sanity saver for sure) to the small — and sometimes silly — but necessary, like investing in travel covers for our stroller and car seat so they don’t get ruined when they’re chucked carelessly under planes.
2. Time Really Does Fly, so Start Saving for Retirement Today
It’s pretty easy to get caught up in the day-to-day minutia when you have a tiny baby that depends on you for her every want and need. But every now and then, when I get five seconds to myself, I’m able to look back through the photos on my phone and see how much my daughter has grown. Can she honestly be six months already? You’re probably saying, “I already know time goes quickly. It’s been [insert amount of time here] since I graduated from college,” but really, there’s nothing that sets up a ticking clock quite like a quickly growing child. My point is, although I have always kept the mantra “the earlier you can start saving for retirement, the better,” tucked somewhere in the back of my mind, I now fully grasp the truth behind it.
For example, my daughter was born in July 2016. Had I invested just $100 on that day into a retirement account, by the time I’m potentially ready to retire in 30+ years, that measly $100 could grow to more than $900. Now imagine I invested more than $100, and did so every single month instead of once? Behold, the power of compound interest.
3. Things Change, so it’s Important to Revisit Budgets & Goals
Having a child would be an obvious change to anyone’s budget, but for me, becoming a parent just reinforced how important it is to not only have a budget and savings goals, but that it’s equally as important to revisit those things on a fairly routine basis. Before I was married, for example, my savings goals consisted of essentially two buckets: Emergency and travel. (Ah, the good ol’ days.) When I got married they became: Emergency, travel, move/house. When we started thinking about kids, a fourth “baby” bucket was added. You get the picture. Since buying a house, we’ve added “home repairs” to that list, too, and believe me when I say we’ve already tapped into that one mightily.
The beginning of the year is a great time to check in on your current budget and savings goals and update as needed, but don’t be afraid to shift things around as often as you need to remain comfortable.
4. Finding What Makes You Most Productive Will Be to Your Advantage
I’ve always considered myself an organized person, but I really kicked it into high gear when my daughter was born, and that’s helped my career as well. As I planned to re-enter the workforce after taking a couple months off when my daughter was born, we didn’t yet have a nanny, but I wasn’t willing to wait to get started. Enter the key to my success: organization. As a working mom without a nanny — and then even when we did find one — I realized quickly that if I was going to get anything (let alone everything) done that I wanted to in a day, I better have a plan. For some people (ahem, me) that might mean making daily to-do lists where items can be crossed off. Others might find reminders set for specific times of day helpful, or setting calendar appointments.
The point is, most of us need a little help keeping on task throughout any given day, whether it’s with personal or professional goals. Learning the things that will get you moving more quickly and efficiently will help you power through your to-do list and streamline your day. Remember: Time is money, so make the most of yours.
5. It’s OK to Use Your Savings for What You’ve Saved For
I’ve always felt more secure when I had savings in the bank, which at times has meant going without things I could have really used, even if they were the exact things I was actually saving for in the first place. Silly, I know, but once I was able to start putting money into savings I loved to watch it grow — and I equally hated to watch it dwindle.
Fast forward a couple years and some of those savings buckets have to be spent — hello mortgage down payments, health insurance deductibles to give birth and any number of house repairs. These days it seems like I don’t have the option of whether to spend money in my savings … for the good of my family, money must be spent. And that’s OK. The whole point of saving up for something in the first place is so that when the time comes to actually purchase the item — whether it’s a house, a vacation or that really extravagant computer bag you’ve had your eye on — you’ve done your due diligence and can buy it outright, rather than go into credit card debt over it (and, if you already have, you can find tips for getting rid of those balances here). Coming to grips with this earlier could have saved me a lot of unwarranted angst.
Of course everyone is different when it comes to money management, but hopefully at least a few of the revelations I’ve had about finances over the past six months might be able to help you out, as well.