Mothers and Money

I came across this article on the Internet earlier today, but of course I can’t seem to find the original URL in order to give it credit. With babies on the brain I thought this was an interesting topic.

Because two out of three mothers ages 25 to 44 work fewer than 40 hours a week, according to demographic research conducted by American University’s WorkLife Law program, women who have children in their 20s have the most to lose financially over the course of their lifetimes. When you factor in lost wages, benefits, and opportunities for advancement,the cost of motherhood can easily be more than $1 million for a college-educated American woman, says journalist Ann Crittenden, Washington, DC-based author of the book The Price of Motherhood and co-founder of the grassroots organization MOTHERS (Mothers Ought to Have Equal Rights).

Women in their 20s have the most years ahead of them to earn compounded interest on their savings — but don’t have as much disposable income to invest once they have kids because of the expense of childrearing, says Crittenden. As a result, they tend to have less money than women who’ve been able to use those years to save and make their wealth grow.

Women who delay childbearing until their 30s often have a financial edge over younger moms. “They’re usually more established in their careers, earning more income, and have started retirement saving,” says Ruth L. Hayden, a financial educator and author of Start Where You Are: Retirement Planning in a Changing World. “They often have a financial foundation in place that is a little more solid.”

Many parents in their 30s and 40s are better able to balance their work and family lives. “Older mothers — and fathers in particular — are more relaxed, says Armin Brott, author of Father for Life: A Journey of Joy, Challenge, and Change. “Parenthood at this age is often more planned, and these fathers have thought about what they want. They’re a little more settled in their careers, and they’re not as worried about missing a promotion if it means more time with their child.”

I definitely feel like I’m in the older crowd of mothers. I’ve been saving in my 401(k) since I started working 11 and a half years ago. The market knocked my nest egg back a bit, but I continue to contribute the maximum allowed each year as does my husband. I’ll continue to do that for at least another six months.

I plan to go back to work full time after the baby is born, but if the mood sways me to work fewer hours then I’m not opposed to looking for a new position or a new job. I would love to find something that would allow me to work part time or at least reduced hours.

I know this could have an impact on my future financial well being, but the fact that I have nearly 12 years worth of money growing certainly helps ease any financial fears.

I always thought that my husband and I would spend the months leading up to a baby saving like crazy, but instead I find myself shelling out more and more money for home upgrades and repairs. After all, it seems a lot easier to remodel the bathrooms now then wait until our baby arrives.

Because my husband and I have been financially prudent all these years I’m actually not worried about the finances. I might change my mind as we start buying things and paying for daycare, but for now I feel that our previous discipline puts us in a good place.

Let’s see if I’m singing the same tune this time next year!

3 thoughts on “Mothers and Money”

  1. I just turned 27 and was thinking that i would *start* thinking of having babies until I'm at least 30. I want to establish myself a little bit more in my career and also earn the flexibility to perhaps work from home a bit or reduce my hours when I have kids.

    It's just such a tough and personal decision. You seem to be handling it quite nicely! bravo!

  2. Welcoming motherhood from a simplistic veiwpoint and not getting caught up in the advertisements of all the things babies "need" is really the best way to go, and from the past few years of following your blog I know you are already a pro at this!

    I know one thing we have done now that we are getting ready to welcome our 2nd child is take the cloth diaper plunge, but there are lots of ways to be frugal with your kids without scarring them for life!

  3. @DFWKnitter – Thanks for the link. I just started writing a post asking for suggestions on registries. I can't figure out what I'll really need.

    @Newlyweds on a Budget – I didn't really plan on waiting this long, but other health issues got in the way of us planning too much earlier. I really hope I can find a job that will enable me to work a reduced work schedule, but I know that's probably what half of the women with children want too šŸ™‚


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