Courtesy Kathleen Porter Kristiansen
- I used to save $1,500 a month in an investment account for my kids, for a total of $100,000.
- I only had $46,000 in my own account, though, and a Ramit Sethi post made me change my ways.
- I’m now applying the airplane oxygen mask philosophy and helping myself before I help my kids.
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Like every aspect of my life, my financial priorities shifted when I became a mother in 2015. As a first-generation millionaire, my focus became how to help my young children take advantage of the incredible power of compound interest.
However, I recently read a social media post by personal finance guru Ramit Sethi about the “invisible script” behind prioritizing your child’s finances over your own that stopped me in my nightly Instagram scroll:
“I’ve lost the game myself, but at least I can win for my kids.”
I realized how much I’ve been saving for my kids – and myself
I checked the numbers. My children (ages 3 and 5) now hold investment accounts in their names totaling $100,000 combined. For the past five years, I’ve made monthly investments of $1,500 a month in their names. I’m incredibly proud of those numbers and value my children starting their adult lives debt-free. Until seeing Sethi’s post, though, I hadn’t considered the opportunity cost of this investment.
My investment accounts from the same period total $46,000 in my name. If you believe that where you spend your money shows what you treasure, then these numbers clearly show that I value my children’s fiscal future twice as much as my own.
I usually scroll past child-free Sethi’s mentions of parenthood, but this post showed me an important truth. Despite 15 years of personal financial education, I put my children’s future economic success ahead of my own. Am I mad about setting my children up to become young millionaires? No. Am I going to reallocate things from now on? Yes. Sorry, kids.
How I’ve changed my savings strategy
My allocations going forward will be 529 contributions up to my state’s match and funding my children’s custodial Roth IRAs up to the amount of their earned income (they make money modeling in Instagram ads). The difference? Now, $1,000 a month will go into my brokerage account.
While my children currently feel like they are part and parcel of me (they are indeed grasping at my laptop as I type this article), they’ll be off living their own lives in just over 10 years. I aspire to set them up for financial success, but above all, I don’t want to become a financial burden for them. My strategy going forward is to embrace the airplane mask analogy for family personal finance – take care of yourself before you help your children.
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