Is a $40,000 preschool a good investment?

Reading this article about the quest for the 1%ers to get their children into top preschools in New York City left me shaking my head.  Preschool prep classes - really?  Apparently the high society folks in NYC are convinced that going to a preschool that doesn't have yoga and a science lab will prevent their kids from getting into Harvard. 

There is some scientific rationale to (sort-of) support this movement.  It is true that early life exposure to language, for example, can improve vocabulary and ultimately help children to learn.  However, scientific studies have not examined the impact of cushy facilities and personal training at 2 years of age on success later in life.  This is a large bill to pay for a societal status symbol, but it is not setting the child up for any future success that he or she could not realize by attending a free or reasonably priced preschool program. 

Great article about planning for your baby's financial future

In this article, steps are described that will help you plan for Junior's future.  They include the basics, such as getting life and disability insurance.  The article also includes advice on longer-term planning, including starting to save for college.  The article is brief and describes the basics, but it is a great starting point for new moms and moms who are new to the world of finance.  Consider it a jumping-off point, rather than a comprehensive guide.

Men vs. Women on Finance

As you may have figured out by now, men and women are very different in a lot of ways.  In this article, a study is described that compared the attitudes of women and men toward dealing with money.  Interestingly, women view things more historically, which can actually make us better investors.  Unfortunately, many women also lack confidence and fail to get involved in financial matters.  Wake up ladies!  There is no reason that the man in the relationship needs to control all of the finances unless you are a hopeless spending addict or a hoarder.  Otherwise, it is time to get involved and make more joint money-related decisions. 

Where there's a will...

No mother, I repeat, NO MOTHER wants to think about the need for a last will and testament.  We can't even fathom the day when we are no longer able to support, love, and help our children.  Though this is an uncomfortable topic, it is one that all families should face.  One ABC News survey found that only 28% of people ages 37 and under have a will.   What does this mean for the families of the other 72%?  Many headaches, for starters.  Just because you have a spouse or children, your assets do not automatically transfer directly to them if you die.  Also, just being young and healthy does not mean you are at risk of death from accidents or sudden illness.  What if you are in the situation of this poor woman and nobody will administer CPR to you when you suffer a life-threatening event?  You need to prepare for the inevitable.  We all love our children more than anything, and one of the most important things you can do for your children is to plan for the future.  When the day comes that they are mourning their mother, do they really need to also be worried about paperwork and financial allocation?

Women and planning for the future: fear the unknown

I am increasingly frustrated by women who pay little attention to the family finances.  Time after time, women tell me "my husband handles all of that".  Every time I hear that phrase, it takes me back to a conversation that I had years ago with a family member.  She and I both got married in our 20's and began having children around the same time a few years later.  In one of our regular phone conversations about nothing important, she remarked that I seemed to know a lot about money for a woman.  "Why don't you?" was my response.  "My husband takes care of all of that," she replied.  At this point I began asking questions, with every response making me cringe more and more.  She didn't know anything about her family finances.  She didn't know what they were saving for retirement, what her husband's actual salary was, or whether they even had life insurance.  "God forbid, what if something ever happens to him?", I implored.  "What would you do if your husband was not around to manage the money? How would you even get by when you can't even figure out which bank your savings account is in?" 

Fast forward several years.  I wish I had been more convincing during that conversation.  Suddenly, without any warning, that same woman's passed away.  He was only in his 30's.  She was left with 3 young children, a mortgage, cars, and bills.  This woman, who had until this point never even had to balance a checkbook for the duration of her marriage, was now in the position of family CEO.  The first months were a complete disaster for her.  Not only was she dealing with her grief over the loss of her husband and trying to comfort her children, who were now without a father, but she also had to try to figure out how to keep the lights turned on, learn how to access funds so the kids could have lunch money, and attempt to get her own credit card.  (Yes, because her husband was the primary card holder on their joint cards, the cards were immediately canceled by the card companies when he passed away and she was left without a credit card temporarily.)  In short, a terrible situation was made even worse due to the lack of financial understanding and involvement of this woman.  You never know what can happen in the future, and she is living proof.  Wake up and pay attention, ladies.