5 F.R.E.E. Financial Tips for Every Parent

As we approach Father’s Day, we consider all the financial stressors that plague parents. Whether you’re a newb or seasoned vet, these F.R.E.E. tips can help.

By Emily Elmore | 18 June 2020

My husband’s grandfather likes to say that “the measure of a man is his ability to provide and protect,” and it’s a philosophy my husband buys into. An athlete and military officer, he’s a big silverback gorilla who falls squarely in the “masculine” category. Yet he’s never too busy to play with our boys, too proud to change a diaper, or too stoic to help them through an emotional outburst.

We talk about that philosophy a lot, because we think it’s a good one when applied to a household. Grandpa might be a little generationally dated, but my husband has found a way to beautifully balance good advice with modern parenthood. It’s our responsibility to provide and protect. Protection is pretty straight forward for parents. Someone or something threatens your kid, remove the threat. But provision is more nuanced. Procuring resources to survive is of the utmost importance, but supporting physical and cognitive development requires a lot more than a steady paycheck. Our little humans’ health and happiness are the measure of us as their parents, and providing an environment that nurtures their development takes investment of time, love, patience, and other intangible resources in addition to financial wellness.

Financial FREEdom is all about understanding your financial picture so you can make it work for you. You don’t need limitless financial resources to have a happy, loving home. Limited resources can (and do) cause more stress, and those limitations might require you to work long hours that keep you away from the kids. Changing behaviors over time in incremental ways can pay big dividends on time and resources available, which means less stress and more attention to the ones who need it most.

What is FREE? Financial Resilience, Empowered Early

FREE principles are like any other health and wellness routine: determine where you are and develop a plan that can incrementally improve that situation until you reach your goal. The idea is that the sooner we commit to understanding our personal finances, the earlier we can initiate a plan that allows us to fund our goals. These goals might be paying down student or credit card debt, starting a business, or growing a family. It also means that when financial setbacks happen, our finances are capable of absorbing the shock. Coronavirus is the perfect example, and so is a premie baby. An endless list of events can set you back thousands of dollars.

5 Tips for Parents Using the FREE Method

1. Save for disruptions AND for peace of mind.

The last thing you want to stress about as a parent is paying the bills each month. Build savings over time to create a cushion. That way you can afford to make a spending mistake (rock n’ play?) without jeopardizing your family’s financial security.

If you’re expecting, start living on your expected baby budget BEFORE the baby arrives (if possible). In the meantime you can funnel all those baby expenses into a savings account, which will do two things for you:

  1. Get you used to the new budget before the baby gets here (and chaos ensues), and
  2. Build your savings.

Even if you already have a baby-kid-teenager at home, savings can help and you can start saving literally any time. Review your budget and find ways to increase income or reduce expenses. Whether it’s $1 or $100 more per week, squirrel it away into a savings fund. You can also automate your savings (which you can do in the Nav.it Money app) so that you aren’t having to remember to do one more thing while trying to corral the youngsters.

2. Kids don’t have to cost a fortune.

First, #realtalk: if you’re paying for daycare, then YES, kids cost a fortune. You’ll need to do some math here if you have a two-parent household. Most daycare facilities cost $500+ per week per kid, and this is a deal… $10 per hour per 40 hours is $400 at the 0% qualified, teenage babysitter rate. Nannies are easily 2-3 times that. $4k per month is $48k per year. Plus food, plus gas, plus plus plus. If you or your partner are making anything less than the $50k-$60k range and one of you has the contractual ability to walk away, think hard about the benefits of staying home instead. The home parent can always procure one of those teenage babysitters at rock-bottom rates to help on busy days.

Beyond capable daycare, healthy babies and kids don’t need you to break the bank. Food, 7 or so outfits, some shoes, a coat, toileting items, some non-negotiable safety items like a carseat, annnd that’s about it. Most of the rest of it is just marketing that’s designed to scare you into thinking that you’ll fail as a parent if you don’t have all the latest gear.

You won’t. Your baby would be as happy as a hipster in Seattle with nothing but your love and attention, and neither of those things cost a penny. Will you want to give them more? Of course. The idea is to think of what must be funded and work out from there. Build a budget for funding special items, trips, etc and spending won’t cause stress– because you’re prepared for the expense.

3. Automation is your friend.

Parenthood will take up most of your time, and that will make it hard stay on top of your financial responsibilities, like paying bills on time or hitting your savings goals.

That’s why automating as much of your financial system as possible will make your life a whole lot easier.

Certain bills like rent, electricity and water have to be paid on time. They not only keep the lights on, but those on-time payments will help you avoid late fees and keep your credit report in good shape. Putting them on auto-pay keeps those bills in good standing no matter how chaotic parenthood gets.

Regarding savings, a lot of new parents tend to pause or decrease their long-term savings, but it’s important to remember that your savings rate is the single most important factor in reaching your long-term financial goals. The more you can automate your savings, the more you can consistently work towards your most important financial goals.

4. Get a good insurance policy.

There are a lot of insurance salesmen out there willing to sell you any policy that earns them a fat commission, regardless of how well it actually fits your needs. However, a good insurance policy is priceless because it protects your family from financial catastrophe.

  • Health insurance will pick up the tab for those really big medical bills, especially the ones that are ongoing.
  • Term life insurance will replace a working parent’s income, or will bear the cost of replacing all the duties of a stay-at-home parent (like childcare, cooking, cleaning, etc.).
  • Long-term disability insurance will replace your income if there’s ever an extended period of time where your health prevents you from working.
  • And liability insurance will pay the damages if you ever accidentally injure someone or damage their property (like in a car accident).

These are all things that would be difficult or impossible for most of us to handle on our own, which is exactly why good insurance is so valuable.

5. Ask for help when you need it.

Everyone struggles. No matter how much prep you do, or how much experience you have, parenthood is tough. In between all the amazing moments like your baby’s first laugh, holding her while she sleeps, and that time she pukes all over your best friend, you’ll go through plenty of financial and emotional stress.

It’s normal. Everyone has the same worries, fears and struggles, and everyone makes mistakes along the way. You are NOT alone.

So when times get tough, don’t be afraid to ask for help. Whether it’s friends, family, professionals or even online forums (we have an app for that), there’s always someone who’s been through what you’re going through and is willing to lend a hand. All you have to do is ask.

We’re changing the narrative around money but change can’t happen with a one-sided conversation. That’s why we’re excited to bring different voices and experts to share their wisdom. Send us an email and let us know what you think. And remember the nav.it money app offers you free tools for checking in and managing your money moves.

You can download it at Google Play and the Apple Store.

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