Money Isn't Everything: Financial Advice for Families Needs to Make Sense as Well as Cents

This afternoon I tuned into a webcast sponsored by insurance giant MetLife. The webcast featured a panel of experts speaking on the topic of family finance:

• Stacey Bradford, author of The Wall Street Journal Financial Guidebook for Young Parents;
  
• David Port, author of The Caveman's Pregnancy Companion; and
• Beth Hirschhorn, Senior Vice President: Global Brand and Marketing of MetLife.

Much of the content was quite useful.

Port provided a roundup of stats on the cost of a university education south of the border ($170,000 if your child attends a publicly-funded university or $350,000 if your child attends a privately-funded university) that should minimize the griping amongst Canadian parents when it comes time to pay Junior's tuition bill this fall. He also provided some solid advice on keeping your family on-track financially. (Note: I may return to Port's portion of the program in a future post. Both Bradford and Port's books are on their way to me, so I've got a reason to write about family finance issues again.)

And Hirschhorn produced a handy (although slightly horrifying) formula for calculating how much insurance the insurance-industry experts estimate you need at any given time (60% of your annual income x your number of years to retirement). If you can't afford that, total up all your debt plus five years' annual salary and purchase that amount of insurance instead.

Unfortunately, where the MetLife seminar lost credibility (and I mean lost it in a major way) was in the "money saving tips for parents" portion of the program, which was delivered by Bradford.

Bradford was asked to deliver 10 money-saving tips for parents for each of the baby, toddler, and school-aged parenting stages. Most of the tips fell into the category of same old, same old (the stuff you've read a million times before, which is okay: she was rounding up this material and presenting it all at once, which is the purpose of a webcast like this one).

But some of her tips definitely missed the mark. The underlying advice was either unsound or it simply didn't ring true.

Here are the most annoying examples, based on the notes I took during the webcast.

"Borrow gear." "Buy used baby gear." "Accept hand-me-downs (for toddlers)" "Consider consignment shops." There's nothing wrong with shopping secondhand or borrowing certain types of baby or toddler gear from friends and family-members, but it's important to know which types of items are safe to purchase second-hand (or borrow); and which ones aren't. That crucial point – that some items are best purchased new - and you need to do your homework in order to keep your baby – should have been raised at least once during the webcast, particularly given that variations of this same tip were raised four separate times (see subhead, above). It's a message the Consumer Product Safety Commission in the US and Health Canada have issued repeatedly, and for good reason: children die each year because of accidents involving dangerous goods purchased second-hand.

"Ask your pediatrician for free formula – and be sure to get more free formula at the hospital." This was offered as a fabulous money-saving tip for breastfeeding moms as well as formula-feeding moms. "If you're breastfeeding, you'll need to supplement or to give some formula to your mom when she's babysitting," said Bradford. Later, during the question and answer period, all of the webcast participants offered additional advice on how to get additional free formula samples. "Write to the formula companies." "Ask the hospital for extras." "The formula companies will give you plenty because they know that once you start with their brand, you're likely to stick with it." At no point did anyone mention why bringing a can of infant formula home might not be such a great idea – or the bargain you think it might be – if you intend to breastfeed your baby, despite considerable research in this area; and World Health Organization (WHO) policy frowning on such practices (pdf). I was shocked.

"Skimp on a stroller and a high chair." Splurge on a car seat and a breast pump instead. While I agree a good car seat and a top-notch breast pump are essentials, I don't know that you want to skimp on a stroller ("All you need is a light umbrella stroller") or a high chair ("Just buy a $30 seat that attaches to a chair"). I'm thinking about things like back support and durability.

"Delay preschool. You'll save thousands. Have play-dates instead." Preschool tuition isn't a line item in the budget of every family. Many families are already scheduling playdates, paying for childcare, and holding down two (or more) jobs. I was also a little offended on behalf of ECEs (early childhood educators): to imply that early childhood education can be replaced by a playdate -- well, that's selling ECEs really short.

"Shop the sales. You can save 20% to 50% on next year's wardrobe." Maybe, maybe not. Sometimes it is difficult to predict what size and shape your child will be a year from now.

"Don't wait too long to potty-train." To this, Bradford added, "This piece of advice is a bit controversial. I would never suggest you push your child. Do it when it's the right time for your child." Huh? I'm having a bit of difficulty reconciling the two pieces of advice. Don't wait, but don't push?

"Take semi-private lessons." Sign your school-aged child up for semi-private tennis and violin lessons rather than private lessons, says Bradford. You can fork over the cash for private lessons when they are older and their talent is more established. No comment from me on this one....

"Share a hotel room with your child when your family is traveling. You will save $150 dollars per night." My reaction: (1) This is a tip? (2) This works well until your family size reaches or exceeds six. Then you will be forced to spring for that second hotel room in most hotels.

Financial advice for parents, like other types of parenting advice, needs to take all of a family's realities into account, including important health, safety, and lifestyle information, not just the family's financial situation. Otherwise, the financial advice isn't of much use to moms or dads; and the company providing it risks looking woefully out-of-touch with the very customers it is trying to woo.

* * *

I actually got a lot out of this webcast -- although it wasn't quite MetLife intended. The webcast reminded me just what is involved in communicating effectively with parents. It's not as easy as it looks. It's only when things start to fall apart that the mental glue that usually holds everything together becomes obvious. (Hopefully, that won't happen the next time I sit down to blog or I'll be awfully embarrassed after writing this hard-hitting post. But, hey, sometimes things need to be said.)

Comments

[Natasha]

OMG--the formula comments are enough for me to pull my hair out!!

[radmama]

I agree with you on must of your critique. I'll counterargue a few, though!

"Skimp on a stroller and a high chair." Well, you don't really NEED either if you're broke. You don't NEED a breastpump either, but you probably need a car seat.
They can be useful tools, but I've known children and mothers to survive nicely without either.

"Delay preschool. You'll save thousands. Have play-dates instead."
This isn't horrible advice for at-home parents.

[Moxie]

Argh. Really.

[caramama]

Gah! Gah and gah! I'm not even going to TOUCH the free formula one, considering breastfeeding is FREE (other than the breastpump, which they apparently recommend anyway). Why on earth wouldn't they simply point out that formula costs lots of money over the course of a year or more, while breastfeeding is free, not to mention the other cost benefits of breastfeeding. Wait, I wasn't going to touch this one...

I can see in certain places where skimping on a stroller might not be so bad, but for those who live in a city and are constantly using the stroller? I don't think it's good advice.

And for those families, like mine, who have both parents working outside the house--how on earth am I supposed to delay pre-school? Neither parent can stay home, and nannies are more expense than daycare/pre-schools. For those who do stay home, it might be well worth the cost to have a child go to pre-school at least one or two days a week in order.

Like you said, these tips come across to me as if the speaker is not considering the different types of families and circumstances, as well as missing the mark completely in some areas.

[Toni Griffin]

Hi Ann,

Thanks for attending and weighing in on yesterday’s event. As Beth mentioned, we definitely wanted to invite feedback and dialogue within the parenting community. Also, thanks for inviting me to reach you by phone this morning. You’ve raised some thoughtful and important considerations, and while saving money was one of the topics of yesterday’s discussion, parents should of course consider the tips and advice that make the most sense for their families. We hope to continue a productive dialogue with new parents going forward.

Best,
Toni Griffin
MetLife
@ToniGMetLifePR

[Beth]

Thanks for letting my know about your post via Twitter after I Tweeted about the lack of breastfeeding talk in the seminar.
As a mom who blogs about how to live on a budget, I found the money saving tips very out of line too. Some of them just didn't seem to qualify as tips and others definitely needs side notes that just weren't there.

As during the session, if anyone needs any real mom support for breasfeeding, please let me know. Unfortunately it is discussions like this that under mind the success of moms who want to breastfed but don't have any support!

[Ann Douglas]

Thanks for all the comments and input on this fascinating topic.

As some of you know, I've been unplugging a fair bit lately in order to immerse myself in my pregnancy book revisions, which are going really well these days.

I was astounded to find all of these comments waiting for me when I resurfaced. I appreciate them and am sorry I was slow in responding. That's the downside of unplugging, isn't it? You miss stuff. But sometimes you have to miss stuff in order to get other stuff done. Arghh: tradeoffs!) ;-)