Tag Archives: Elizabeth Warren

6 Biggest Money Mistakes Mothers Make

Tonight I’ll be leading the chapter meeting for our local Mothers & More chapter on “The 6 Biggest Money Mistakes Mothers Make.” Join us and bring a long a new or gently used purse for our donation to Elizabeth house! Here are the “mistakes” I’ll be discussing with moms tonight.

1. Making “To Work or Not To Work” Decisions Based Solely on Short-Term Family Budget

When mothers wrestle with questions about whether to stay employed or not, or whether to scale back employment to make room for family, the conversation usually centers on whether the current family budget can afford those changes. Can we still pay the mortgage or rent? Could we trim expenses to make up for lost income?

Too often, all the longer-term implications are left out. How will this decision impact my ability to save for retirement? My Social Security benefits? How will this decision impact my future earning potential?

Whenever faced with an employment or financial decision, ask yourself:

How will this decision affect the short- AND long-term finances of my family?

How will this decision affect my own short- AND long-term financial security?

2. Falling Into the “Can I make enough to pay for childcare?” Trap

When our daughter was born, my husband had just started his second year at a law firm and I had just been laid off from a part-time job. We sat down together to decide whether I should look for a new job or not. Estimating the income we thought I could make in a job with reasonable hours, we subtracted taxes, childcare, and work expenses. There wasn’t much left. Working for pay didn’t pay much. So we decided I wouldn’t, because we could afford for me not to.

Three different things lead many mothers into this trap. Continue reading

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Filed under Assumptions about Mothers, Career-Life Fit, Economy, Money, Motherhood, Remodeling Motherhood, Remodeling Motherhood Tips, stereotypes

Why Families are Feeling the Squeeze

A couple of weeks ago, the Los Angeles Times business section ran a short article on the cost of raising children, Children Don’t Come Cheap. Grand total for middle class family from birth to 17 was $222,360, which doesn’t include college tuition. “That’s 22% higher than the 1960 cost – adjusted for inflation – of $182,857,” the article reported.

Where’s all that extra money going? The common narrative implies that parents are throwing away “extra” money on gadgets and fancy clothes and big houses and even organic groceries or dining out more. Not so. The data continues to confirm what I wrote about in my book This is Not How I Thought It Would Be and in this blog post, Busting Stereotypes about Families and Money, using information from Harvard professor Elizabeth Warren.

It’s the increase in fixed costs that are eating up families budgets these days and making them feel like failures because they can’t get ahead.

  • “the report called child care and education expense ‘the most striking change in child-rearing expenses over time.’ Those expenses grew from 2 percent of total child-rearing expenses to 17 percent.”
  • “Housing was the most expensive expenditure in both time periods in the USDA report, and it increased in real terms over time.”
  • “A child’s health care expenses doubled as a percentage of total child-rearing costs from 1960 to 2009. It also climbed in real terms.”

It’s that triple threat of child care/education, housing and healthcare that is eating up family budgets.  Even two-income families today have LESS left over after fixed expenses than their parents did a generation ago. As a result, families feel even more pressure to get their children a good education to ensure their children’s economic future and in the process driving up the cost of housing near good schools and the cost of private childcare and education.

Food and clothing costs have gone down over time.

  • “Changes in agriculture over the past 50 years have resulted in family food budgets being a lower percentage of household income”
  • “a child’s clothing and miscellaneous expenses decreased as a percentage and in real terms from 1960 to 2009, due partly to ‘globalization.'”

How about you? Do you feel these pressures on your budget? Do you compare your family to previous generations and wonder why you can’t get ahead?

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Filed under Economy, Healthcare, Money

Busting Stereotypes about Families and Money

On the surface it seems puzzling. Over the past 30 years we’ve gone from a majority of single income families with children to a majority of families with two incomes. Yet, as you’re probably aware, families are saving less and have more debt than ever. As a result they’ve been hit hard by the current recession.

But why? If two-parent families now have two incomes, and more money, why aren’t they wealthier than ever?

Elizabeth Warren, Professor of Law at Harvard and the Chair of the Congressional Oversight Panel for the U.S. banking bailout, wondered too, and then went to find the data. Continue reading

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Filed under Assumptions about Mothers, Economy, Fatherhood, Money