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Wealth and a Growing Family: 5 Questions for Parents with kids under 5

My wife and I have three beautiful children, who we desperately want to prepare for the world. And this need becomes clearer every day.

But life is complex.

There are so many areas of life that need to be balanced – work, family, marriage, friendships – that it seems impossible to meet our own standards as individuals, let alone parents. But making hard choices is a defining part of being a parent of young children. There’s not enough time in the day to accomplish all we set out to. There’s not enough money in the bank to buy all we desire. There’s not enough energy to be both the parent and professional we hope to be.

Being a parent of a young family means navigating tradeoffs. But the choices we end up making aren’t always the one’s we would have hoped. We make decisions in the moment - not with a calculator and spreadsheet, but with often with our intuition. The problem is that we don’t always see how one area of life has an impact everything else.

To make better decisions, we need a way of keeping the relevant facts in our heads. We will never remember everything. But we can be better today that we were yesterday.

The following five questions are designed to shine light on the tradeoffs. There are no ‘right’ answers. There are only the answers that fit you, your values, and your circumstances.

What do our children need?

The needs of children change over time. But during their first years, children benefit greatly from the time and attention of their parents. Among the many developments that happen during childhood, parents have a profound effect on a child’s individuation and socialization.

Think of individuation as the building of a ‘self.’ This construction can be aided and reinforced by interactions with a parent. Parents lay the foundation for what children belief is valuable, what is possible, and how they fit into the world.

Socialization is the process of figuring out how to deal with other selves. Learning to form and maintain relationships with peers is a critical life skill. So is managing relationships with adults. In life, so much opportunity comes from other people.

Parents are guides for children through both developmental processes. But it takes time, energy, and awareness. Not to mention a whole lot of patience. All of these come in short supply considering the stage of life parents usually find themselves.

How do we make this work?

Raising children is an awesome responsibility, but it isn’t the only one. The time, effort, and energy parents spend with their kids needs to come from somewhere, and it often is at the expense of career, marriage, and self-care.

The first stage of new parenthood is in renegotiating roles. Who takes the dog out now?Who does the laundry? Who packs the baby’s bag?

There are many new responsibilities at home. There are also increasing responsibilities at work. Many parents are in periods of careers where leadership opportunities are opening. Bigger opportunities need to be measured against the time needed to meet the needs of children, and the finances required to support them.

This is perhaps the most unfair stage for new mothers. Do you find daycare and work? Stay at home? Hire a nanny? Guilt and frustration may persist no matter how she divides her time between career and family. Not to mention the judgement of her peers. Mothers should have a better set of choices. They deserve better.

Again, there is no right answer. Parents need to find a way forward that works for them, and cling to it. Because a strong home team is the best defense from the danger of constant comparison to everyone else.

Parenting young kids is walking through chaos. Nobody has it all ‘together.’

How should we prioritize our finances?

The dual-career household has become more common over the last two generations. This is an achievement for women that should be celebrated. It has also come at a cost, especially for parents.

Dual-career families have twice the earning power, which was a competitive advantage when it was uncommon. Today many families feel the need to keep two jobs to afford the opportunities they hope to give their children. Double the income means double the house you can ‘afford.’ Homes in ‘good’ neighborhoods, and ‘good’ school districts are the battlegrounds for a parental arms race. They’ve become the mechanism that cements opportunities for children.

There’s much more that can be said about social stratification through real estate. But what isn’t appreciated is the increased risk which highly-leveraged families face. Stretching two incomes to buy a ‘good’ house is one thing. But the two jobs that support it means double the chance of disaster. Even high income families can be only one disability, job loss, or downsizing away from losing their lifestyle.

This touches on another financial responsibility of parents – to protect the children in their charge. Before kids, insurance is a nice-to-have. After kids, it’s a necessity. But no one is checking to make sure that families are adequately protected.

Managing finances during this period of life can fell like debating which crack in the dam you want to put your finger in. At some point you run out of resources. This is the real work of financial planning with young children.

How do we talk through this?

Nichole and I often joke that between the two of us, we make one fully competent parent. I don’t know of anyone who can hold all of these tradeoffs in their mind while making decisions for their family.

The fact of the matter is that parents need each other. Better decisions come from deliberation. It means looking at an issue from different angles. It also means keeping lines of communication open.

But even in our ever-connected society, real communication is rare. The work you do with your spouse to answer these questions takes time and energy drawn from the same pool as children and career.

Tradeoffs indeed.

What are the threats?

It’s often said that no one is happy with a compromise. Making tradeoffs will leave you with the same feeling. Despite your best efforts, there will be a lot that you wish you had the [time/energy/money] to do.

The single biggest danger that parents face today is that of comparison. There will always be a bigger house, a better school district, projects you should do at work, investments you should make, the list goes on. Don’t let comparison blind you to the responsibility of parents.

Not to raise decent children, but to raise good adults.

If it isn’t clear by now, I’m writing this just as much as a reminder to me as it is for you. We are all figuring this out together. And hopefully our children are all the better for it.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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