Updated on 04.19.17

Six Money Lessons I Learned From My Kids

While my husband and I have always worked hard, we didn’t really care about money until our late 20s. We felt the money we earned was there to spend, so we happily spent our paychecks and then some. And it never bothered us to make minimum payments on student loans, car loans, or credit card debt, either.

But then it happened: We got pregnant with our first child. In an instant, we started viewing the money we earned in a different light. Instead of thinking of money as a tool for pleasure, my pregnancy instilled a strong sense of duty. It wasn’t just me and my husband against the world anymore; it was us. And if we wanted a brighter future for our new family, we had to make our money count.

Money Lessons My Kids Taught Me

In a few short weeks, my oldest child turns eight years old… and what a journey it’s been. Both of my girls have taught this Type-A mom so much about life, including the importance of having fun and letting go.

But they’ve also taught me a lot about money – and not just how to spend, but why saving is more important than I realized. Let’s face it, some lessons can only be learned by doing – and there are a handful of lessons I only learned once I had children myself.

Here are a few money lessons parenthood taught me:

Lesson #1: Emergency funds become more important than ever.

Before we had kids, we never had a fully-funded emergency fund. We had savings, but our emergency fund was more of a “spending fund” since we used it as we wished. And when we had a real “emergency,” we just charged it on a credit card and paid it later. It wasn’t the most efficient method for handling life’s surprises, but we handled it fairly well.

These days, I can’t imagine not having three to six months of expenses designated for emergencies. And it’s just not about bills; it’s about peace of mind. Our kids are extremely healthy, but the medical bills constantly catch me off guard. For heaven’s sake, my daughter’s ordeal with swimmer’s ear cost us $300 in visits and prescriptions just last month!

Then there are all the other surprise expenses parenting requires – the birthday parties you forgot to buy for, the last-minute school supplies, and the dress clothes for fancy occasions. Plus, you still have the regular emergencies to plan for – the leaky roofs, surprise car repairs, dental work, and vet bills.

Now that I’m a parent, I rest easy knowing we have savings to cover practically any expense we couldn’t anticipate or plan for in our monthly zero-sum budget. Because, life happens… and kids just add one more element of surprise.

Lesson #2: You can’t ignore the future.

When we were in our 20s, we barely looked ahead more than a year. We planned vacations and halfheartedly planned to retire one day, but never took the time to envision what our lives would be like five, 10, or 20 years down the line.

But once we had kids, we started to think about the future all the time. And now that our children are ages 6 and 8, we realize that college is only 10 years away, and that so much will happen between now and then – expensive stuff, like sporting events, school outings and trips, and even prom.

We can’t start planning for everything, but we do plan to remain debt-free. And without the drag of debt, we should be able to afford most of the expenses that come our way.

And when it comes to college, we aren’t burying our heads in the sand there, either. When each of our children were born, we started saving tiny sums of money in individual 529 accounts. It started at just $25 per month, then grew to $50 per month… then $100. These days, we save around $5,000 per year to take advantage of our state’s (Indiana) generous 20% tax credit.

It may not add up to enough to cover all of their college bills, but I know saving for the inevitability of higher education is better than simply hoping for the best.

Lesson #3: Splurging can be a lot of fun.

Our initial plunge into frugality came with a ton of rigid rules. Because we focused on paying off debt for so long, we barely spent a dime on fun.

But having kids taught me to loosen up – and of course, it helps that we’re now debt-free. While we plan the bulk of our spending with a zero-sum budget every month, becoming a parent has taught me to live a little, too.

So yeah, we occasionally splurge on ice cream at the park or a few hours at our local Jump-N-Play. And yes, we travel quite a bit and take plenty of vacations with our kids – all with zero guilt.

Parenting taught us to put the important stuff first, which is why we max out our retirement accounts, save for college, and stick to a budget and spending plan every month. But with kids, you have to have fun sometimes – and fun isn’t always free.

Lesson #4: Our financial decisions can impact their futures, too.

Having kids not only made me focus on their future, but on our future as well. Over time, we’ve realized the decisions we make during their childhood can affect how they live as adults.

If we don’t save for retirement, for example, we could easily burden our children in the future. And if we don’t take care of our health, we have a better chance of relying on them to take care of us.

Having kids made us realize something important: that our savings and investing goals aren’t just for us – the effort is for them, too. So, we save for retirement like our future depends on it. Because it does. We also exercise, eat healthy, and do our best to take care of the only bodies we’ll ever have – not just for us, but for our kids.

Lesson #5: Money isn’t everything.

As someone who thinks saving and investing is “fun,” I tend to focus a lot of time and energy on our finances. My husband and I are the type of people who play around with retirement calculators instead of watching TV. We know the financial decisions we make more are important, and that the steps we take today can help us enjoy even more freedom and security in the future.

But, parenthood also introduced me to the other side of the coin. Even though money is important, it isn’t everything. Becoming a parent gave me a higher purpose; it gave me something to plan for – to live for. Most importantly, becoming a parent taught me to stop and smell the roses. It taught me to stare deeply into my children’s eyes for no reason at all – to grasp at the straws of their innocence and hold them close while I still can.

Becoming a parent helped me realize that money is nothing more than a tool, one that makes it easier to buy the life we want. We need money to survive, but we don’t need it to live. And when I’m with my kids, I want to live in the moment as much as I can.

Lesson #6: True happiness doesn’t come from ‘stuff.’

Here’s something I already knew, but it really sank in once I had kids: Money can’t buy happiness or love, and it can’t fill an empty heart.

My husband and I spent our early 20s spending with no purpose at all. We traded in our cars for the sudden rush of excitement we felt from buying something new. We constantly spent money on our house, trying desperately to make it a home. We bought clothes, toys, and “stuff,” hoping we would feel something – anything. And none of it worked.

Having kids reminded us that life is precious, and that the most important thing we had was each other. And there’s no greater reminder of how pointless “stuff” is than a smiling baby held snugly in your arms. Kids don’t need stuff; they need us.

Final Thoughts

People always say that children are expensive, and I totally agree. But I still believe – with all my heart – that having kids is the best money we’ve ever spent. Whether we’re forking over cash to take them to the dentist, pay for school supplies, or plan a fun vacation, it’s all the same to me. Every dollar I spend on them comes back to me tenfold in terms of happiness, contentment, and purpose.

And maybe that’s the biggest lesson of all – that some life experiences are worth having, no matter how much they cost. So, I’ll keep budgeting and saving and planning for their future and mine; I don’t regret anything since I chose to bring life into this world – or a single cent.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

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What money lessons did you learn from parenthood? What would you add to this list?

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