Parenting Teaches Lessons About Financial Security

Today, my son took a tumble down the stairs. He was attempting to go down the stairs in the same way that I do, but his twenty month old legs simply aren’t long enough to traverse the steps forward and he started to tumble. I was watching him come down from the bottom and was able to catch him after only one flop, but it still scared him pretty badly (and scared me a bit). He grabbed ahold of me and started crying, so I carried him over to the living room and just whispered in his ear quietly for a bit. Soon enough, he was up again, running around and playing with his favorite toys (a tractor and a teddy bear).

I was able to be there to provide security for my son when he needed it, and for that I’m incredibly glad. To me, that’s one of the big parts of being a parent, to make sure that when bad things happen, these bad events don’t completely knock his life for a loop. He can sit on my lap for a minute or two, hug me a time or two, then get down and things are largely as they were before.

It’s easy to see this kind of security because it’s so tangible. A little boy on his father’s lap, shedding a few tears after a tumble, then getting up and going back to play just as happy as he was before – that’s security for him. He knows that I’ll make the bad things in life better and because of this base security, he’ll have the room to stretch his wings and learn how to fly.

What’s often harder to see is that the same idea applies to family finances. Let’s say, for example, that I wreck my truck on the way home from work this week. My wife and I pay for comprehensive insurance (a form of financial security) and we have enough in savings that the deductible could easily be covered. This is security – knowing that if a disaster happens, there are things in place to help us out.

Not only is this security for myself, it’s also security for my son. If I lose my job, we’re in a financial state (because of wise and frugal choices that I’ve learned to make) that lets us keep our house and keep some approximation of the life we enjoy right now. If I were to be physically disabled, we’d be in the same situation – our life would change, but it wouldn’t be disastrous. If I suddenly die (or my wife does), my child’s financial future might arguably improve.

Much as I can pick up my son after he tumbles down the stairs, good financial planning means that there’s something there to pick me up if I were to tumble. And I will tumble at some point or another.

Here are five things you can do right now to improve your security:

Start an emergency fund Open a savings account at a new bank, then have a small amount automatically deposited into that account each week. I constantly mention emergency funds, but there’s a reason for it – when something goes bad in your life, it will save the day.

Look for ways to curb your required spending A while back, I made a list of 40 ways to reduce your required monthly spending. Go through this list right now and find a few ways to trim some fat from your required purchases. Then, take that money and use it to build up your emergency fund, or …

Pay off your debts Instead of buying some new stuff, spend your money paying off your debts. If something happens in your life, it is the debts that will really harm you – creditors will come seeking their money. I recommend trying the debt snowball method or the highest interest method, and get to work paying off those debts.

Start exercising and eating better This seems completely crazy at first, but if you’re in better shape, you’re much more likely to deal well with medical and personal crises.

Check your insurance Does your current insurance adequately cover the most likely crises that would befall you (car issues, disability, a fire in your home)? I stupidly went years without renter’s insurance and it came very close to biting me in the back for it. We also carry comprehensive car insurance, and a tornado smashed my truck pretty strongly about two years ago. Without the insurance, I don’t know what we would have done (it was barely drivable).

The next time you see a child take a bump, begin to cry, and run to their parents, remember that it’s all about security – and you can make choices right now to ensure that kind of security is there for you when you need it.

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  1. Bellen says:

    This is terrific advice for those just entering the workforce, those newly married, those who are new parents, parents of college bound, those anticipating retirement, and those retired. Gee, I guess it’s just plain good advice for everyone, no matter what phase of life they are in. Thanks for the reminder.

  2. Miguel says:

    Trent you left one big out out –Life insurance. Not to sound like a commercial but, a few weeks ago I had the same thought you did. My daughter is about the same age as your son, 20 months old, and I will always do my best to provide security for her and my wife. Part of my strategy involves having life insurance. Right now my family’s biggest asset is my earning potential. If I die early they miss out on years, and years of income coming in. So my policy is a good way to make sure they are taken care of even if I am not here.

  3. Colleen says:

    Great advice. Despite other financial set backs (spending too much!) we have always made health insurance, car insurance, home insurance, term life insurance and mortgage payments our priorities when it comes to our money. We have been fortunate enough to have never been without any of these, and have had to use the health insurance (four kids) and car insurance (five drivers) enough times that we would have been ruined with them.

  4. Brip Blap says:

    One more important foundation of your child’s security is making a will. I say this even though “make a will” has been sitting on top of my to-do list since my son was born more than a year ago. Go over to My Two Dollars and read his post “It Takes The Devastating To Remind Me Of What Is Important” to realize why every parent needs a will – every parent, not just the ‘breadwinner’.

    No parent wants to think about this, but protecting your children when you’re not around to protect them is an important part of life – like Miguel said, life insurance is critical, too.

    It’s really not a fun subject to consider as a parent, particularly because you ALWAYS want to be there to catch them before they get a boo-boo. But you won’t – someday they will be on their own. Hopefully later rather than sooner, but it will happen.

  5. MVP says:

    I can’t emphasize enough the importance of having an emergency fund of at least $1,000 in the bank for EVERY individual or family. I’m amazed at the number of people who don’t have this safety net (yes, I was one of those people not too long ago). But since we started keeping one, it’s saved us from despair several times, and has allowed us to keep our chins up when life kicks our butts. Life WILL kick your butt at some point – be ready for it.

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