Spend 2 hours doing this each month, and save your family $1,000

A few weeks ago, a book landed on my desk that seemed right up this new moms’ alley: “Smart Mom, Rich Mom: How to Build Wealth While Raising a Family”. The book helps mothers deal with big financial issues like saving for their kids’ college and their own retirement, juggle work and family, and teach their children about money. And it has advice that you can do in just an hour or two per month (like opening a 529 plan or reviewing your current financial situation and making a small tweak or two to save money) that can save your family thousands.

There were a couple of pieces of advice that I particularly loved. The first: Parents should write a mission statement about the family’s financial values, highlighting goals, priorities and values, and share it with the children and family; Palmer even gives a template for doing that. The second: Call an older woman in your family to talk about tough financial times, money regrets and other money issues and see what you learn from that. Both are things I hadn’t thought about doing, but now plan to.

The author, Kimberly Palmer, has lots of other good advice for parents. So MarketWatch talked to her this week. Here’s what we learned:

Marketwatch: Your new book talks about how moms can build wealth while raising a family. What do you think is the single most important thing moms can do to build wealth?

Palmer: Spend time actively managing and planning your family’s finances on a regular basis. That includes reviewing your savings for college and retirement, making sure you have enough life insurance and taking advantage of workplace benefits like flex spending. By investing even just an hour or two a month in reviewing your current financial situation and where you can make improvements, you can save thousands of dollars in the long run — by opening up a 529 account, for example.

Marketwatch: What do you think is the biggest mistake many moms make with money?

Palmer: Focusing on the small ways to save money, like saving $10 with a coupon, because it’s so satisfying in the moment, while leaving hundreds or even thousands of dollars on the table because you don’t put the time into following up on a denied health insurance claim or aren’t maxing out retirement benefits at work. Those choices have much bigger payouts in the long run but they can be a hassle to sort out in the short term.

MarketWatch: What can they do to combat that?

Palmer: We can combat that tendency by committing to ourselves, and our kids, to putting the time in every month — an hour or two can go a long way — toward sorting through those financial chores. You can even make it sort of fun, by creating an organized, color-coded binder for all your paperwork and writing out a checklist to slowly cross through, so it feels good every time you make progress. And once you start seeing all the money you are saving and your bank account go up as a result, you build momentum toward your bigger goals of paying for college or saving for a family vacation.

Marketwatch: In your book, you talk about the importance for women with careers of timing their births/children. Can you talk about why this is important and the pros and cons of having children in your 20s versus 30s?

Palmer: Waiting until you are well established in your career is not necessarily always the best financial choice. Of course, we often don’t get to choose when we have kids. In general, moms who delay pregnancy until their 30s tend to earn more money overall. There can also be financial benefits to having kids in your 20s, especially if you are in a training-heavy field. Having young babies and toddlers is extremely demanding, and if you can get through the toughest years while you are still in training or before you take on more senior management roles, then it’s easier to put more into your career as your children get older and more self-sufficient. It’s always a juggle, of course, and challenging no matter what age you become a mom.

Marketwatch: Many moms find it difficult to balance full-time careers and family responsibilities. What advice do you have for them on this front?

Palmer: Face that challenge head on and negotiate the flexibility you need with your employer just as you negotiate your salary. When you are moving to a new job, after you get the salary sorted out, you can bring up flexible scheduling requests, like working at home one day a week, or whatever helps you. There are definitely going to be times when you feel like you need to be in two places at once, but if you have support that you can rely on, including your partner, and a reasonably flexible employer, then it’s much easier to figure out a routine that works for you and helps you be the kind of mom you want to be, too.

Marketwatch: You write about how women should talk to an older woman who has experienced a loss (divorce, death, etc.). Why is this important and what might they get out of it?

Palmer: It’s so easy to think that some of the worst things — divorce, unexpected death of a partner, disability — will never happen to us, but as soon as you start talking to older women, it’s hard to ignore the fact that bad, unexpected things can happen, and they can be devastating financially as well as emotionally. Talking to other women helps make that feel real enough that we are more motivated to take the necessary steps, including taking out life insurance and drawing up estate planning documents, so we’re prepared.

Marketwatch: What are the most important things moms can do to teach their children important lessons about money? How should you handle an allowance as a parent?

Palmer: Talk to your kids — both sons and daughters — about money. One disturbing survey finding that I came across found that parents seem to actually talk about money more with their sons than with their daughters, and that young girls already consider themselves “worse” with money than boys do. We have to stop that cycle. Talking to kids about money and the choices you’re making is the first step, and giving them an allowance, starting around age 6 or so, can be a good way to start talking about saving and prioritizing.