Exploring the Connections Between Your Parental Life and Your Financial Life

This is the fifth entry in an eight part series exploring the connections between your finances and other areas of your life.

A few weeks ago, I started a series exploring the connections between personal finance and the other “spheres” of my life. The first entry covered the connections between one’s physical life and financial life, the second entry covered the connections between one’s mental and spiritual life and financial life, the third entry covered the connections between one’s intellectual life and financial life, the fourth entry covered the connections between one’s marital life and financial life and today we’re looking at one’s parental life and financial life.

As noted in the first entry, I tend to view life as a bunch of “spheres,” or areas of focus. I really like Michael Hyatt’s list of nine such “spheres”: physical, mental/spiritual, intellectual, social, marital, parental, avocational (hobbies), vocational, and financial – they cover much of what life is all about. I’ve come to view these spheres as deeply interconnected, in that success in one sphere is usually linked in some significant ways to success in other spheres (and failures are similarly connected) and that knowing the connections can help people figure out how to succeed in both areas at once.

Today, we’re going to look at the parental sphere and how it connects to one’s financial life.

What Is “Parental Life”?

This one’s pretty simple: it’s the part of your life where you’re serving as a parental figure to a child or even to another adult. You offer basic needs, emotional care, life advice, and instruction, and that’s just the start. Involved parenthood builds a lifelong relationship that both parent and child can benefit from in numerous ways.

The responsibility of parenthood has an enormous number of financial implications. Here are just some of them.

First of all, the basic care of children is expensive. It starts with the medical costs of pregnancy and birth. Once the baby arrives, you have eighteen years (at least) of food, clothing, and shelter ahead of you for that child. There are child care costs, educational costs, gifts, and on and on and on.

The expenses can sometimes seem endless. There’s always an extra meal to prepare, a fee for some school event, a book that’s needed, a birthday that’s coming up. From birth to independence, it’s a relentless flood of expenses.

Second, setting your children up for a successful future can also be a real financial burden. Even if you can afford to get your child all the way through high school, there’s the issue of postsecondary education, which is probably the single biggest expense they’ll face in their lives aside from possibly buying a house.

Are you going to help your child with those expenses? How much? If you step up to pay for everything at a top notch school, that’s an enormous six figure financial burden. Even if you don’t help that much, it’s still a major financial cost that needs a lot of planning and saving.

Third, there are significant tax benefits and other financial benefits of being a parent. There are a lot of expenses, but there are also a lot of benefits. You have an extra deduction on your taxes. There are child care tax benefits. There are many community opportunities open to children and families. These things don’t balance everything out, but they certainly help.

If you’re struggling with your income, there are many programs out there that provide additional aid if you’re caring for a child, ensuring that they always have food on the table and that their basic educational needs are met.

Finally, having a healthy relationship with your adult children confers significant financial and life benefits on both of you. If you do your parenting job well and have a little luck to boot, you’ll eventually grow into an adult relationship with your child where you help each other out in a myriad of ways. You might provide some free child care for grandchildren. They might make dinner for you regularly.

Sometimes, these situations even turn into cohabitation, where everyone involved shares the financial burdens of maintaining a home, saving a tremendous amount of money for everyone involved.

Being a parent is a big personal and financial burden. It takes a lot of work, but it can also be incredibly rewarding. Here are five low cost strategies I use for maintaining and improving my own parental life.

Strategy #0 – Love, Forgive, and Be Patient

Before I get into those strategies, though, there are three principles that underlie all of these things. It is extremely hard to be an effective parent if you’re not bringing three key elements to the table.

Love your child without condition. This doesn’t mean jumping in and making everything easy for them. This doesn’t mean protecting them from every difficulty. This doesn’t mean excusing their mistakes and protecting them from all consequence. This doesn’t mean never having consequences.

It means giving them love that they don’t have to worry about. It means that you are their “safe place” where they will feel love no matter what path their life follows or what mistakes they make. As a parent, you can provide that. It’s not easy at times, but it’s a key foundation of good parenting.

Forgive your child’s mistakes. Your child isn’t perfect. Your child is learning how to be a functional human being in the world, and you are the primary teacher of that functionality. You’re going to see your child stumble in that learning quite often.

Forgive those stumbles. Minimize the mistakes they make and don’t hold those mistakes against them. That doesn’t mean ignore them – it means help them move past those mistakes and then move past them yourself.

Be patient with your child. They won’t always conform to exactly what you want, nor should they. They won’t always know how to succeed at first, and some kids take a long time to figure it out.

Be patient. Don’t expect perfection today or even tomorrow. Look for a step in the right direction, not a completed journey.

Strategy #1 – Have Genuine and Meaningful Time Together on a Very Frequent Basis

One of the biggest issues that many families have is that they get comfortable with their individual routines and responsibilities and begin to let genuine and meaningful time spent together fall through the cracks.

The parents have their jobs to worry about and all of the issues of maintaining a household and the myriad of other issues in their lives. The children have schoolwork and their own burgeoning social lives and often endless extracurricular activities.

It is incredibly easy, especially as children grow into adolescence and then into their teen years, to let genuine and meaningful time fall by the wayside. This causes families to lose touch with each other as people, especially when the people in that equation are changing.

One of the most powerful things you can do as a parent is to make genuine quality time with your family a very routine and sacrosanct thing. Aim to have dinner at the dinner table together at least five nights a week. Have a pizza and movie night together at least once a week. Play a board game together at least once a week. Go on a day-long adventure on a weekend day at least once a month.

Schedule these things. Literally put them in your calendar. Make them unchangeable. When they’re happening, everyone puts down their cell phones and turns them off.

This is a window to really get to know who your children are as people, to know what they’re interested in and are passionate about, what their good features are and their bad ones, what their life concerns are. The thing is, they learn the same things about you, even if you don’t always directly notice it. That bond grows, but it only grows if you work on it consistently.

Strategy #2 – Focus on the Value of Effort Rather Than Results

When you’re encouraging your child, focus on the effort they’re putting forth. Talk about the value of working hard and how it translates into skills and success automatically.

When you’re complimenting your child on success, focus on the hard work that got them there. Point out how you’re proud of the hard work that they’ve put in and you’re glad to see it paying off.

Don’t focus on the results. Focus on the process that brings good results.

If you focus on the results too much, so will your kids. They won’t worry about the process of hard work that it takes to get there. They’ll look for shortcuts to the results that they think everyone cares the most about, and that almost always has bad results. Not only have they not actually built any genuine skills, they’re often very tempted to do unethical things to get those results, because they believe that only the end results matter.

Don’t worry about the results. Focus on the homework and the studying rather than the test grade, because if they do the homework and the studying, the test grade will probably be pretty good. Focus on the practice rather than the results of the game, because if they work hard in practice, the end results will probably be pretty good.

Be there for the big game. Applaud the good report card. But just as much, if not more, compliment the effort spent on studying and on practice and on preparation. When you do cheer on the result, make sure that they know you’re cheering for the hard work they put in and admiring that inevitable result.

Strategy #3 – Catch (and Mildly Reward) Your Kids Being Good

Parents are often seen as disciplinarians, catching their child misbehaving and doling out penalties for doing so. While that might be a method for curbing bad behavior, it doesn’t actually do anything to encourage good behavior.

A much better approach is to catch your children doing good things and mildly reward them in some fashion.

One thing I like to do is watch for my children doing the right thing when they don’t think I’m watching and then report on it positively at the dinner table. I’ll perhaps see my oldest son studying on his own time for a science test and I’ll point out at the dinner table how I saw that and how I’m proud of him and how he’s nailing it. I’ll see my daughter helping out a neighbor on her own and I’ll tell everyone about that the next night at dinner.

We’ll often extend privileges a little bit. We have some tight restrictions on screen time at our house and if I’ve seen our children doing something good, I’ll extend it a little bit.

Sometimes, I’ll even give a small material reward of some kind on a very irregular basis. I’ve bought my children an item at the store before in an unexpected moment or give them an extra $5 before they go to a sleepover, telling them that I’m proud of them for having done something really right. This is much less common than the spoken compliment at the dinner table, however.

The point isn’t the reward. The point is that I noticed them doing the right thing and I acknowledged it in some significant and positive way. Doing this requires being observant and aware of what your children are doing, which is always valuable.

Strategy #4 – Be Consistent and Clear

When you have expectations for your children, be consistent and clear about them. Both are important.

Consistency means that the standards are always the same and don’t vary from moment to moment. If you expect your child to do things one way after school one day and then another way after school another day, that’s inconsistent. They often won’t know what you expect, and then you’ll find yourself frustrated that they’re not “doing what they’re supposed to,” and you’re begging for conflict. Expect the same standards all the time.

Clear means that there’s no question what it is that’s expected. One thing I’ve found as a parent is that clarity often makes a world of difference when it comes to communicating with a child. Things that are clear to you aren’t always clear to them. When you say “clean your room,” what does that really mean? You might know it to mean “make your bed, throw away any trash, do any laundry and put it away, and put any items on your floor and desk top and dresser where they belong.” This might not necessarily be clear to the child.

One thing I find very helpful in parenting is a checklist. If I expect them to follow a certain routine, like after school chores or something like that, I make up a checklist that they can follow so that they understand what they’re responsible for. I laminate the sheet so that they can check things off with a dry erase marker.

The same thing should be true when it comes to consequences for misbehavior. If you’re going to provide a consequence for misbehavior, it should be consistent in that it fits what the misbehavior was and is in line with past consequences, and it should be clear in that your child knows exactly what the issue is.

Without consistency and clarity in everything you do as a parent, you create mistrust. Your child doesn’t know what they did wrong, nor are they able to actually tie the consequence in any meaningful way to what they did wrong. If the consequence is arbitrary and wildly varying, then it’s not really a consequence but just a random event to fear and avoid.

Strategy #5 – Be a Good Role Model in Every Way You Can

In the end, the best thing you can do as a parent is to model the type of adult you want your child to be as much as you possibly can. Your child is going to take cues from you throughout their childhood and, yes, even well into their teen years and adulthood. When I look for it, I see myself still taking cues from my parents when we interact.

If you want your children to be model citizens aiming themselves for success in the world, then you should do everything you can to be a model citizen aiming yourself for success in the world. If you want your child to be a good, caring person who is involved in a positive way in their community, then you need to be a good caring person who is involved in a positive way in your community.

You need to be consistent about it, too. Volunteering a couple of times doesn’t make you a good role model for volunteering. Being nice to people sometimes but then talking bad behind their back doesn’t make you a prime example of how to build good healthy trusting relationships.

Ask yourself what kind of people you want your children to be, then be that person as much as you possibly can. You can’t make your children be that kind of person, of course, because genetics plays a role here, but you can certainly nudge them constantly in that direction.

Have you ever noticed how, in a lot of ways, kids take after their parents? The neighborhood jerk often has bully kids? It’s because kids take a lot of cues from their parents. Give your kids good cues all the time.

This is hard. It means that you’re constantly striving to be on your best behavior in all aspects of your life. However, not only will this set a great example for your kids, but it will pay benefits for you in your life, too.

Final Thoughts

Parenting is the single hardest job I’ve ever taken on in my life. My goal is to raise three fully independent self-sufficient children with good character who as adults don’t need me in their lives for support but want me in their lives because we bring so much value into each other’s existence.

That is hard work. That is expensive work. It takes a lot of paying attention and effort and love.

It pays off, though. It pays off when I see my kids doing the right thing without needing to be told to do so. It pays off when I see them creating marvelous things. It pays off when I see them identifying problems to be solved and putting in the hard work to solve them right.

Parenting is tough, but it’s worth it.

Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.