Moms and money

Money. Mom. Two “M” words that are inextricably connected in many families.

For kids, it's "Mom, can I have some money?" or "Will you buy me that?" For mom it's, "How can I afford this?" and "College costs how much?"

When it comes to money, mom is unique. She plays her own role in the family money management, whether she's earning it, managing it, or spending it. Her individual needs are unique as well, considering moms tend to earn less and live longer than dads. Nicole Middendorf knows about the two "M's" firsthand, as a mom and a financial planner.

Middendorf is a mother of two and CEO of Prosperwell Financial, a women-owned financial planning firm in Plymouth, Minn.

Q: As a mom and a financial planner, do you think moms are different when it comes to money than women in general?

A: “Moms are different for they tend to put their kids first—as well as everyone else—and so they sacrifice things for themselves,” Middendorf explains. Take prioritizing college. Student lender Sallie Mae’s 2013 “How America Pays for College” survey found 74 percent of parents with teens would use retirement funds to pay for college expenses. It’s an understandable sentiment. But as the phrase oft-uttered by financial planners goes, you can borrow for college, but you can’t borrow for retirement. Middendorf agrees that retirement takes precedence. “I completely advise moms to save for their retirement first.” In fact, this is more important for moms than dads. Despite the societal shift of more female breadwinners in the home, women still, on balance, tend to earn less and caregive more, requiring retirement savings catch-up.

Q: Are there any advantages that moms have when it comes to money?

A: “The advantage is that you have a little person to mold and help and talk to about money. The more you talk about money, the more comfortable you feel with it,” Middendorf says.
To make money a family affair, head to the web., developed on the recommendation of the President’s Advisory Council on Financial Capability, offers 20 digestible financial lessons for kids as young as three all the way up to the teen years. For example, the experts who developed the site say three to five year olds should be able to grasp the concept that money is earned through working and it’s necessary to wait to buy things (my four-year-old and I will work on that last one next time we hit the toy aisle).

Q: You talk about a “family 401(k)” as a good way to familiarize kids with the basic idea of a 401(k), the tax advantaged retirement plan sometimes offered through work. What is the family 401(k)?

A: “With a family 401(k), you as a family come up with a goal for your money. As a parent, you can offer a matching program as well. The goal could be a pool, a trip, or a new ‘toy’ for the family. So, for example, you put money in and then if your daughter puts a dollar into the family 401(k), you could match her 50 cents. This way she can learn about 401(k)s so when she starts her first job she understands the concept of the 401(k) and will sign up right away."

Q: Nicole, how do you teach your own kids about money?

A: “Allowance is a useful tool. Each Friday the kids get a dollar. They are five and three [years old]. You can use whatever dollar amount that fits with your budget."
Also, explore needs versus wants. “We do a wants/needs chart where the kids take out a sheet of paper, cut out newspaper ads, and put them in their spot. My son did his wants versus needs as opposites. So Spiderman was on the need side and the toilet paper was on the wants side. It made for a very funny conversation.”
Incorporate money talk in daily life. “I was in Target one day [with my kids] and asked if [a toy] was a want or a need. This woman down the aisle gave me a priceless look—like I was crazy. There are so many moments you can teach your kids about money.”
Expect the lessons won’t always go smoothly. “Another time I took the kids to Target with their own money to buy toys. Each had theirs [money] in a ziplock bag. [My son’s] bag broke and ended up all over the checkout aisle floor. It was ‘Clean up on aisle 12’ and then the cashier counted every single coin.”

Q: What are some tips parents should keep in mind when preparing and shopping for the holidays?

A: One, determine the amount of money to be spent beforehand on gifts. Next, determine the amount of money to be spent on extras such as holiday cards, postage, decorations, food, and gift wrap. Develop these lists as a family and finally, have your kids make as many gifts as possible.

Kara McGuire is a personal finance writer and a St. Paul mother of three. Send comments, questions and story ideas to