Motherhood later

Mamas on Bedrest: Operating Instructions, Our 1st Mamas Bookclub Read!

September 17th, 2012

Welcome to our inaugural Mamas Bookclub! Our first read is Operating Instructions by Anne Lamott.

I really enjoyed this book. It is a journalistic account of Lamott’s first year with her infant son Sam. Lamott becomes unexpectedly pregnant with Sam at age 35. By her own admission, a self absorbed, recovering addict is not at all mother material, but despite all of her shortcomings, Lamott is a woman of deep faith and the thought of extinguishing her child is untenable, so she goes through with the pregnancy. We get a glimpse of Lamott’s pregnancy, labor and delivery, but the bulk of the book recounts Anne’s struggles as a single mother of a baby boy.

This book could have easily been a trite, smarmy account of first  time motherhood, complete with the adoring “oohs” and “aaah’s” and “my baby is perfect and completes my existence”. Instead, Lamott gives us the true grit. For sure we see her deep love and adoration for her son. But Sam was a colicky baby and we witness firsthand Anne’s moment’s of utter frustration, desperation and being at her wits end as she recounts the hours each night that Sam would wail with debilitating gas and her inability to console him as a newborn. I particularly liked that Lamott was real, there were times when she didn’t want to be Sam’s mother, she didn’t want Sam and she didn’t want to be in the situation in which she found herself. She is brutally honest about wanting to walk away  at times, and the time she thoroughly came to understand child abuse. It’s not that Anne would have ever harmed her child. But as a mom of a baby who howled, I completely “felt” what she was saying-and I had a husband to help!

A recurrent theme throughout the story is Anne’s guilt that Sam would grow up without a father, and Anne’s struggles as a single mother. When she told Sam’s father that she was pregnant, he immediately pulled away and even denied that he was Sam’s father. Ultimately Lamott takes him to court to be able to name him as father on Sam’s birth certificate, while not requesting support or for him to have a relationship with Sam. Anne takes solace in the face that Sam is loved and adored by a tribe of friends and family, and that he does in fact have wonderful male role models. Still, her paings of guilt and longing for a partner for herself and a father for Sam are palpable throughout her story.

The strength of Operating Instructions lies in Anne’s candor and transparency. Many mothers, myself included, can recall a day (or two or three) going by and not showering or brushing her teeth. Many is the mama that has wished that she hadn’t had her child. (A controversial point to be sure, but as a mama who had trouble carrying, I felt extreme guilt the first time I prayed for God to send someone, anyone, to come and take this yowling little creature I had prayed so diligently for!) At the same time we witness Anne giving thanks for her son in church, feeling wholeheartedly blessed at his presence, all while Sam farts a tune as she speaks.

Operating Instructions shows the complexity of motherhood. The ups, the downs, the good, the bad and the ugly. In essence, Lamott normalizes the experience of motherhood. She exhibits the indescrible love that a mama has for her child; the sheer amazement and bewilderment that this beautifully complete little person came through her. She is able to laugh at his “odd stages” when her baby isn’t the darling “gerber baby” but a rather ugly with acne and losing his hair. We experience her vulnerability; how she learns the utter necessity of help from others and learns to accept help graciously and also learns to say “no” with as much grace in an effort to safeguard her sanity.

Mamas on Bedrest, I wholeheartedly recommend this book. It’s a quick read full of humor and candor. I think that the best thing about this book is that it will help mothers realize that motherhood, in the earliest stages especially, is difficult at best. Even the best moms sometimes falter and sometimes despite your best efforts, your baby will cry and wail. Yet, at each stage there are blessings and moments of wonderment that make the journey truly worthwhile.

Mamas on Bedrest: 5 Ways to Save for Your Children’s Future

June 20th, 2012

I just completed the necessary paperwork to establish trust funds for my children within my health and wellness business.  After tomorrow, my children will be independent business owners and will be able to assume their businesses at the age of 18.

I had been told that I could establish trust funds for them early on, but kind of shied away from the idea. I honestly don’t know why. But when the idea was proposed again a couple of months ago, my mind was ripe or the idea and I set about preparing the necessary paperwork.

This is the third savings vehicle that I have for each of my children. They each also have standard bank savings accounts into which we put the assorted birthday money and such. They also have 529 College Savings funds which I established when they were each born and I am sorry to say that I have not been as diligent as I should be in contributing to them. I like the idea of being able to build businesses for them from my business that will create wealth for them and secure their futures. It’s something that I am already doing and it will be easy to nurture their trusts along in the process.

So what is the best way to save for your children’s futures? It’s really hard to know, but I say that’s it’s any way that will enable you to contribute to the plan/fund/account regularly and that grows at a substantial rate. As I contemplated my savings plans for my children, I looked into what other options are available and found 5 good options for saving for your children’s future.

1. A Typical Savings Account.

This is where I started with each of my children. When they were born and as soon as I was able to get them social security numbers, I went to my local bank and opened savings accounts for them. It seemed like the right thing to do. But I quickly found that the ability for the money to grow in a typical share savings account is really limited. Interest is calculated according to national financial data and we all know that currently our nation’s (the United States that is) financial health is pretty much in the crapper. So suffice it to say that interest rates on my children’s savings accounts are nominal at best, about 0.5 to 2%. I wanted something more.

2. College Savings Accounts.

A 529 College Savings planis a savings account that allows your money to grow tax deferred. Withdrawals for qualified college expenses are federal income tax-free. Some states also offer upfront tax deductions. My children’s 529 plans are comprised of mutual funds and I have my children’s accounts managed by the same company that manages my retirement accounts and they are earning a tidy little sum. Any good financial planner can help you establish a 529 College Savings account for your children.

Another type of college savings account is a Coverdell Educational Savings account. From what I can tell, a Coverdell account is very similar to a 529 College Savings account. A Coverdell is an account that allows your earnings to grow tax deferred. If you use the money to pay for qualified education expenses, your withdrawals are tax-free. However, from what I have read, there are a few tax advantages available up front with the 529 that may not be available with the Coverdell. Other than that, the accounts look amazingly similar to me. So my suggestion to you is that if you are trying to decide between a 529 savings account and a Coverdell Educational Savings account, you should consult with a financial planner knowledgeable about college savings plans.

3. The Uniform Transfers to Minors Act or Uniform Gifts to Minors Act (UTMA or UGMA)

The quick definition of these custodial accounts is

A trust often used to set aside money for a child’s college education. In many cases, a parent will give up to $10,000 per year per child to take advantage of a tax exemption on gifts.

But the back story to these accounts is

The Uniform Law Commissioners adopted the Uniform Gifts to Minors Act (UGMA) in 1956. The primary focus then was to provide a convenient way to make gifts of money and securities to minors. Later, it became clear that a more flexible law was desirable. The Uniform Law Commissioners adopted the Uniform Transfers to Minors Act (UTMA) in 1986. UTMA expands the types of property you can transfer to a minor, and provides that you can make other types of transfers besides gifts.

Custodial accounts are similar in some ways to trusts. Both place property under the control of a person who isn’t the beneficial owner — that is, the person who has the ultimate right to enjoy the fruits of the property. In the case of a trust, a trustee manages the property for the benefit of the beneficiaries. In the case of a custodial account, the custodian manages the property for the benefit of the minor.

Yet custodial accounts are not trusts. In fact, the whole point of UGMA and UTMA is to permit you to transfer property to a minor without establishing a trust. The legal framework for trusts is much more elaborate than for custodial accounts. Generally speaking, trusts are more expensive, complicated and time-consuming than custodial accounts.

There are good reasons to use trusts in many situations, however. Trusts provide greater protections and more flexibility. Generally you should think of using a trust when you expect to transfer tens of thousands of dollars. Custodial accounts are more suitable for smaller transfers.

4. Trust Funds

I think that the above passage gives a really good explanation of trust funds and how they differ from custodial funds. The reason that I chose to establish trust funds for my children that will arise from me and their trustees managing their businesses within my business is that my children are young and on the scheme of things so am I. At 9 and 6 years old respectively, I have roughly 12 years to grow their trusts. That is pretty easy given that I have roughly another 20 years to work myself! Being able to contribute to their trusts on a regular basis while building them businesses is a win-win all around. (If you want to learn more about how I have my kids’ trusts built within my business, e-mail info@mamasonbedrest.com.)

5. IRA Accounts

I was really surprised to see Roth IRA’s listed as a way to save for your child’s future. to me, a Roth has always been a way to save for retirement, so the idea of establishing an account for my little ones seemed counter intuitive. However, these are the facts:

  • Parents can give their kids a financial head start by opening a Roth IRA in the child’s name once the child starts earning income. This can be as little as a paper route or having your young child work for you in your business. (Check with local/state/federal laws but I think you can have your child “work” for you as young as age 7.)
  • Children over the age of 18 retain control of the account, and certain legal retrictions prevent your child or other investors from taking earnings out penalty free before the age of 59 1/2.
  • As with anything, there are exceptions to this rule. If your child becomes disabled, they may be able to make withdrawals from their Roth IRA to meet their financial needs. Roth funds can be used for educational expenses or for  purchasing a first home.

As you can see, there are many ways to save for your child’s future. It takes some investigating and research, but a bit of work up front can provide you with a reasonable way to set money aside for your children and for it to accummulate to a sizeable nest egg for your children’s future. If you are unsure of which way to save is best for you, consult with a certified financial planner for advice.

References
Bankrate.com

Edward Jones

Fairmark.com

Mamas on Bedrest: Babies or Bankruptcy?

December 9th, 2011

They are e-mails that just break my heart.

“I have just learned that I am pregnant with triplets and have been put on bed rest for the remainder of my pregnancy. This is a huge financial blow as we were living paycheck to paycheck when I was working and barely making it. We  didn’t plan this pregnancy, and we knew that it would be a financial stretch. But Triplets??? I am completely overwhelmed! I have no idea how we’ll make it.”

At a time when this mama to be should be experiencing great joy, she is instead overwhelmed and quite possibly panicked. More and more I see couples delaying childbearing or abandoning the families of their dreams due to finances. But sometimes, as the above e-mail illustrates, life just throws  you a curve.

While the decision to have a child is a very personal one, in the United States, without paid family leave, its becoming a luxury. That’s not to say that people aren’t having babies. But more and more, having a child is an additional burden that many couples are woefully unprepared for. Now granted, triplets are not common and are almost always a surprise to the parents to be. But something like bed rest is common (and increasingly more with women waiting later to have children, fertility issues, etc..) yet it catches most couples unaware and unprepared. So what should a couple do when a pregnancy presents unexpected circumstances that create a financial burden?

First and foremost, take a deep breath. Okay, have your meltdown first, then take a deep breath. Surely things seem overwhelmingly bleak, but you can survive. Hundreds to thousands of couples have weathered complicated pregnancies, multiple pregnancies, bed rest, complicated labors and deliveries, NICU babies and survived. Truth be told, many couples have been devastated financially. But others have actually survived the storm. How? Here are 3 steps to take to get a realistic assessment of your finances as you approach your pregnancy.

  1. Make a list of all your monthly income, every dime you receive.
  2. Make a list of all your monthly expenses. As much as possible, list everything that you spend money on from bills, to gas, to gifts to “that morning latte”.
  3. Make a list of all of your outstanding debt; mortgage, car notes, school loans, credit card debt and the like.

Once you make these lists, you’ll have a clearer picture of how much money you make, how much money you owe and how much money you spend. The task then becomes separating the essentials from the non-essentials. Rent/mortgage is an essential. Daily lattes or lunch out is not. Where can you trim? Couples will have to look at everything and make some tough decisions. I can recall one couple who was having financial difficulties when mama went on bed rest. For them, one solution was to move back in with parents. Was it their first choice? Most certainly not! But they saved a lot of money on rent and utilities and also, since the parents were retired, mama had a lot of care and support while on bed rest.

Pregnancy can present some unique challenges, especially when they are multiple and/or high risk. Couples will have to be creative when it comes to finding solutions to managing the financial burden these challenges bring.

Over the next several blog posts, we’ll share various tips we’ve learned about financing bed rest. We want your input. What are your financial concerns? What has worked for you financially? Share your story below as it will most certainly benefit another mama.