A few months ago, my son asked me an interesting question, “What financial advice would I give my twenty year old self?”  After pondering the answer for a while, since I think he was asking for advice in a very creative but roundabout way (I answered him here.) As I am making plans to take time off in May to help out my step–daughter care for my three year old granddaughter when the new baby is born, I thought of the same thing.  What advice would I give my twenty eight year old self when I was in her shoes as a new parent?  Here is what I came up with:

Go easy on the nursery – Like many expectant mothers, I went a little crazy on the baby’s nursery with new matching furniture and décor.  Turns out the little ones aren’t little very long!  They grow like weeds so it would have been more practical to purchase a used crib and changing table since the baby couldn’t really care less about those things. They are interested in looking around the room (so a cool mobile above the crib) or crying to get your attention to get you into the room, not in the crib itself.  Knowing what I know now, I would have saved the money to spend later when the kids are around ten years old and get them a bedroom set they can keep well into adulthood.  That twenty two year old son still uses that dresser we purchased for him when he was a tween.

Resource – What baby things cost calculator — Babycenter

Embrace the hand-me-downs – This is along the same lines as the furniture. Kids grow fast so many of the clothes your friends and relatives may hand down to your kids were only worn once or twice – some not at all!  I used to carry bags of used clothing over to my neighbor’s house and was barely able to ring the doorbell with the piles of garments hiding my face. Her sons loved to wear the “cool older kid’s” outgrown stuff and often would point to their shorts or jackets with a “thumbs up” when they saw us.  Just think that in addition to a neighborhood watch, we could have started a neighborhood clothing exchange and everyone could dress for free and in style.

Put your money where your memories are – Take memorable vacations.  Looking back, my family’s favorite memories are of the special trips we took together. We didn’t take expensive trips every year. In fact, we often went camping, which our family really enjoys. When we did the hotel route, we made it count.  For example, when we went to the San Diego Wild Animal Park, we booked a special VIP behind-the-scenes tour, where we had a special raptor tour and were able to go into the elephants’ quarters and inside the tiger’s den (behind two sets of bars of course).  Have you ever caught the scent of a tiger?  You’ll never forget it.  We often talk about this trip many years later and those extras were well worth it.

Teach kids early and often to manage their own finances – I always enjoyed teaching my kids to be money savvy.  The advice I would give, however, is to make it really simple since parents are really busy.  In my case, I used a simple allowance formula — I gave my kids the equivalent of their age each week but they had to save half in the bank and then they had to use that money for things they wanted rather than me handing them cash.  They found early on that buying the new $80 video game wiped them out so they learned to buy used, exchange games with their friends and sell back to the store.  Those cash management skills are coming in handy today.

Save for your own retirement before saving for their college – As parents, we naturally focus on providing for our children and want what’s best for them.  In the long run, taking care of our own retirement is what’s best for them and the truth is, tough as it sounds, there are many ways to pay for their college or trade school, including getting inexpensive units with AP classes and community college, as well as scholarships, grants, loans, working part time, employer-paid education, the US military, etc.  When you are on track to fund your own retirement, then think about starting a college savings plan such as a 529 plan.

Some basic things every parent needs are a will to determine who the guardian of your children would be in case you aren’t there to raise them and life insurance to provide the funds to do so.  Other than that, do your best, eat dinner together, read to them, and be tough on them since life is tough and they’ll be ready.  Get down on the floor and play with them.  And laugh. Laugh a lot.