Some Thoughts on Parenting and Personal Finance Success from an Experienced Parent

Sarah and I welcomed our first child into the world in 2005, not too long before the launch of The Simple Dollar. Since then, we’ve been on this shared journey called “parenting,” and as our firstborn has grown older and we’ve added two more children to the mix, the challenges have grown and changed.

In the past, I’ve written a lot about how to be an effective parent in terms of teaching financial lessons and setting the stage for financial success for your kids, but today I want to write about something a little different. Rather than looking at the kids, I want to look at the parents.

Being a parent is hard. I’m not going to pull any punches with you. It is incredibly rewarding, but it is also incredibly challenging. For most of us who can’t afford to hire a set of full time nannies to actually do the parenting for us, parenting means devoting a ton of time and energy and money to the raising of children, and that cost must be paid.

The time has to come from somewhere. The money has to come from somewhere. The energy has to come from somewhere.

This is particularly difficult when both parents have careers that put demands on them. There’s only so much time and energy in the day, and there’s only so much money to go around.

What follows are some of my own thoughts on how to balance all of this as a parent. My focus isn’t on how to impart the most value onto your children, but how to make the financial and time demands of modern parenting work for the parents to be able to plan for their own future, be good employees and good parents, and still maintain their sanity.

Focused Time and Life Skills

One of the most powerful revelations I’ve ever had as a parent is that most of the “adult” tasks I do tend to work out better for all involved if I multitask them as parenting tasks as well.

If I’m making supper, I turn it into quality time spent with the kids. We work on making supper together while we talk about our day, and along the way, I teach them how to do some sort of kitchen task properly.

If I’m clearing the bathroom drain, I don’t just do the task. I’ll grab one or two of the kids and show them how it’s done. I’ll show them the drain “snake,” talk about how it works, demonstrate how it’s used, and then let them try it.

If I’m working in the garden, I’ll have the kids come out and work alongside me, putting plants in the ground or pulling weeds or something like that.

Yes, sometimes they’re distracted or bored or don’t want to do it, and there are times when it would definitely be “easier” to just do it myself.

However, this type of “quality time” hits a lot of things on the head simultaneously.

First of all, it’s time spent together actually doing something together. That’s the embodiment of the idea of “quality time.”

Second, they’re learning some life skills from the process. Each of my children can make passable meals for themselves or for the family as a whole. They can clean up after a meal. The oldest one (and maybe our middle child) can do his own laundry. They can all budget their own money. The oldest two (and maybe all three of them) could start a passable garden. The oldest two can clear a clogged drain. All three of them can clean a room fairly well. They can all do the dishes. They can all clear the driveway of snow and get a car ready to drive on an icy day. I know they can do these things, and so sometimes we’ll do them together and sometimes I’ll just tell them to do those things for themselves.

This is going to result in kids who can handle most of life on their own the day they leave our house, which means that there’s a lower likelihood of them returning to the nest, which is going to be a big financial benefit to all of us.

Third, because of these burgeoning skills, all of us have more free time. We’ve now reached a point where if all five of us bear down on a task, it gets done pretty quickly. We can clean up the kitchen and dining room quite fast. We can knock out a long checklist of household tasks really quickly. This leaves us all with time for fun things, which we often do together.

Fourth, it’s “quality time” that doesn’t cost money. You’re not taking them to an activity which costs money and takes time away from actually getting things done at home. You’re not taking them to a babysitter while you “get stuff done.” You’re doing it together, and it’s not costing you anything.

My sincere recommendation for all parents is, as early as possible, make some of your “quality time” oriented around teaching them life skills as you practice them. Have them help with laundry and dishes and meal preparation and cleaning as early as possible and make it clearly understood that these are normal tasks that they take equal part in as part of the household. Show them how to do things properly by doing them together until they can handle them on their own.

Considering an “Ideal” Childhood

Many of the families around us seem to have their children wrapped up in tons and tons of activities. They’re constantly traveling for sports or academic or cultural events, which brings about a ton of additional expenses, and they seem to have very little unscheduled free time.

We’re intentionally trying to take a different approach with our children. Basically, the only activities they’re involved with are ones that they expressed a strong interest for on their own and seem to be actively engaged with it in their own self-directed free time. We try to maximize their self-directed free time and try to not get them into organized activities unless it matches an interest they’ve cultivated on their own and really want to be in that activity.

At the same time, when they do have an interest that cultivates on their own, we tend to be as supportive of it as possible at home. We encourage their efforts, give them lots of space to work at it, and talk often about the value of deliberate practice. Sometimes, this ends up leading to an organized activity, as my oldest son’s passion for soccer has (he cannot get enough of soccer).

We view this as being a light form of “free range parenting,” which is a parenting style with known psychological benefits for both parents and children.

This approach has several benefits for us as parents beyond the benefits to the children.

For starters, it’s a lot less expensive. We don’t spend a whole lot on activity fees, travel for activities, and so on. Our children are in a few organized things, but they’re not incredibly expensive.

It also lends itself to time flexibility. With a lot of our children’s activities being self-directed, we can move around that time quite easily. This means it’s much less likely to find ourselves with time conflicts or to find ourselves in situations where we can’t have a home-cooked meal, which also saves us money.

Another plus: it gives us as parents the benefit of some true leisure time as well to engage in our own hobbies or share in theirs. I tend to use a lot of deliberate practice principles when I’m trying to learn something new, so this gives me a chance to be an example in that way. A simple example of this comes from my son’s recent attempts to get into speed solving the Rubik’s Cube, which I also started doing along with him. Because of our free time flexibility, he had the time and space to really get into this hobby (and build some incredibly solid spatial reasoning in his head), and I had the time to practice it as well and demonstrate some good practices for learning a new skill.

Parenting Causes Decision Fatigue… and What to Do About It

Decision fatigue is a topic I’ve written about extensively in the past; here’s a quick summary of the topic:

In its simplest terms, decision fatigue refers to the idea that people tend to make worse decisions after having made a lot of decisions. Much like muscle fatigue, if you flex your “decision” muscle too much, it will fail you.

I went on to discuss how decision fatigue has a major impact on a person’s financial habits because decision fatigue causes you to make really poor short term decisions, such as impulse buying and rash financial moves.

Here’s the problem: parenting causes serious decision fatigue. I’m far from alone in noticing this phenomenon.

On a given day, my children end up requiring me to make dozens of decisions on their behalf that simply wouldn’t happen if they weren’t present. They’ll ask for something or request attention or need some help and I end up having to make some kind of a choice as a result.

The idea of decision fatigue is that you really only have the capacity to make a certain number of good decisions in a day before that “decision muscle” gets tired and stops performing well. So, with all of the normal decisions of everyday adult life and everyday professional life, adding a big dollop of everyday parenting decisions means that you’re likely to hit decision fatigue much more frequently.

What happens when you hit decision fatigue? You start making bad choices. You start buying things impulsively. You make really poor financial decisions. You choose not to save for the future. In short, it becomes really hard to build a financially successful lifestyle if you find yourself frequently in the pit of decision fatigue.

What’s the solution, then, for parents who often find themselves just completely burnt out after long days of work, personal life, and parenting and all of the decisions required by those roles?

First and foremost, start automating a lot of your choices. The more things you automate in your life, the better. If you want to save for retirement, set up automatic retirement contributions. If you want to build up an emergency fund, set up a small regular automatic transfer into a savings account. Automate every aspect of your financial life that you can.

Another strong tip: re-evaluate your hobbies and consciously drop all but one or two of them. This might seem like strange advice when talking about decision fatigue, but what I’ve found is that when you have a bunch of potential options for every moment of your free time, you end up with your free time contributing to decision fatigue. Reducing my hobby count and then consciously planning out my free time a little drastically reduced my decision fatigue. Most days, I typically wall off an hour for focused reading and an hour or two for board gaming and that’s the sum of my hobby time. I don’t watch television, for example – it’s a hobby I’ve given up aside from date nights with my wife where we’ll watch a movie or partially binge-watch a mutually-chosen television series. I just cut my hobby time down to the ones I care most about and then literally plan for time for each of those hobbies each day.

Another strategy: put yourself in positions where you might spend money or make financial decisions early in the day, and avoid them like the plague later in the day. In fact, I generally stay off the internet entirely later in the day to avoid e-commerce temptations. I don’t want to have to make the “buy or not buy” decision on anything less than a perfectly clear mind.

Be the Person You Want Your Kids to Be

As with some of the other tips here, this is just solid parenting strategy that happens to align well with personal finance health.

This one’s straightforward. Think about the type of adult you want your children to be. What attributes do you want them to present to the world? How do you want them to interact with others in their personal lives and professional lives and community lives? Remember, you’re not trying to control their destiny, but define what kind of people you’d like them to be in the world should they turn out “right.”

See that list of traits and principles you just came up with? That’s how you should behave as much as you possibly can. Those traits should govern your actions, not your words. If you can’t live up to those principles and traits, how can you possibly expect them to?

If you want them to be an active part of your life as adults, then you should be an active part of the lives of your parents. If you want them to be financially responsible and not teetering on the edge of financial ruin, then you should be financially responsible and not be teetering on the edge of financial ruin. If you want them to be honest, then you should be honest. If you want them to be frugal, then you should be frugal. If you want them to make sensible spending choices, then you should be making sensible spending choices.

In short, if you want your kids to have a better life than you, then you should live your life according to the principles of those who actually do have better lives.

Obviously, no one is perfect and no one will do this perfectly all the time. The thing to remember is that this is your ideal. Allow yourself to regularly think about how you will actually embody those values and principles in your everyday life, whether you think your kids are watching or not. Aim to live by them.

I found that the book The Millionaire Next Door by Thomas Stanley and William Danko is not only a great batch of personal finance advice, but it actually addresses this challenge of being a good parent and a good example to your children in terms of healthy financial behavior. If you want your children to be financially independent of you and be an accumulator of wealth, then you yourself shouldn’t be financially dependent on your parents and you should be an accumulator of wealth, and that takes a particular approach to daily living. The book is full of principles that apply very well to parents who want to set an example of healthy financial behavior through action for their children.

If I’ve learned anything about parenting, it’s that action speaks louder than words. Words only serve to explain the reasoning behind actions. If you’re acting in one way and your words point in another direction, your actions will be the far better example. If you rant at your children not to spend money foolishly while you spend money foolishly, they’re going to spend money foolishly. If you tell your child to not be unhealthy but then exhibit unhealthy behaviors yourself, you can’t expect them to not exhibit unhealthy behaviors. If you demand honesty but then are dishonest yourself, you can’t expect them to not be dishonest.

Be the person you want your kids to be. If you want them to be financially responsible, start by being financially responsible yourself. You’ll end up in a better place while also setting a tremendous example for them.

Final Thoughts

The financial and personal impact on parents from their parenting decisions is tremendous. Parenting can warp our financial choices, devour our free time, eat every spare dollar, and keep us from ever getting ahead financially, and even worse, all of that can end up setting some really bad patterns for the children to emulate, too.

First and foremost, as a parent, you have to consider what is going to both shape your children into functional independent people as well as what choices are going to ensure that you have a successful post-parenting life, too, while staying sane through all of it so that you can be there through thick and thin. That’s not an easy thing to balance.

My honest advice boils down to a few simple things, but the core principle is to be the adult you want your children to be when they’re adults. If you strive for that in every action, you’ll be in good shape. Alongside that, give your children room to breathe and discover who they are. Mold them through example and through gentle guidance and give their interests room to grow and room to shrink; don’t engage in big financial and time and energy commitments unless the child is already invested.

Also, recognize what parenting pulls out of you and compensate for that. Parenting is difficult for everyone; respect that the challenge puts you in positions to make suboptimal choices and find ways around that by protecting your financial decisions. Don’t let parenting wear you into oblivion; if you find that it is, you’re doing both yourself and your child a disservice and you need to work toward better practices for both your sake and your child’s sake.

You’ll find that by following these principles, you end up with a happier and healthier and more well rounded child and a happier and healthier and more well rounded you, and both of you have a far better chance at financial success in life.

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.