5 common money mistakes new parents make

© istockphoto.com / jacoblund

September is the busiest month for new births, with 9 of the 10 most common birthdays in America falling between September 9 and 20.

It’s an exciting time for many first-time parents, but it also comes with some stress, including sleepless nights and growing bills. According to the latest Cost of raising a child report, the average middle-income family loses between $ 12,300 and $ 13,900 in child-related expenses each year alone.

To alleviate the financial overload that comes with having a baby, family finance expert Andrea Woroch has compiled a list of common financial mistakes new parents make, along with some practical tips on how to avoid them:

Mistake 1: Modernizing their home and their car.
Parents think they need more room to accommodate baby, but buying a bigger house or car adds unnecessary financial burden and more stress during an already overwhelming time. Stick with what you have and give yourself time to settle into this new life and new budget.

Keep in mind, the American Pediatric Association recommends that babies sleep in the same room as mom and dad for at least six months, up to a year, so that you have some time before you need an extra room for a nursery or nursery. games.

Mistake 2: buying too much baby equipment and clothes

Baby brands want parents to think gadgets will make caring for a new baby easier – often, however, these items go unused! Save money by borrowing from friends or family, buy second-hand, or rent baby gear from sites like Rents4Baby.com Where BabyQuip.com.

For the most part, all you need right away like a car seat or cradle, shop, and look for coupons on sites like CouponCabin.com. You can even earn cash for all your baby essentials to offset future baby costs i.e. you can get 20% off at BuyBuyBaby.com + earn 2% cashback on your purchase.

Mistake 3: Ignoring life insurance and needs.
No one wants to talk about death when you embrace a new life, but now that you have a child who is dependent on you financially, you have to have these tough discussions. This includes obtaining life insurance, appointing a legal guardian, and drafting your will.

Apply for term life insurance online at sites like Ladder Life, which offers a unique advantage: it is the only company that allows you to increase or decrease coverage as your life changes. your financial needs. Use this free online life insurance calculator to estimate the coverage that will be adequate for your needs. In the meantime, you can set up a guardianship or will quickly online through sites like TrustandWill.com, which offers step-by-step instructions to help you through the process. You can take a quick quiz on their home page to determine which estate plan best suits your family’s needs.

Mistake 4: Underestimating child care costs.
Working moms and dads can expect to spend $ 565 a week for a nanny and $ 215 for a daycare, according to data from Care.com. Beyond your 9 to 5, you’ll likely need extra care for nights and weekends every now and then. Since the average hourly child care rate is $ 15, this can increase and blow up your child care budget. To save money, organize a childcare swap with other families in your neighborhood or with parents who have children about the same age. Sites like BabysitterExchange.com can also help you set up a babysitter cooperative.

Mistake 5: procrastinating education savings.
College is the furthest thing from your mind when you’re kneeling in dirty diapers and haven’t slept for more than a few hours, deferring savings for your child’s future education will end up costing you more. expensive in the long run. The sooner you start, the less you will have to tidy up each month. To determine how much you need to start saving, use this college cost projector tool by Vanguard (this will shock you!). A 529 College Savings Plan works like a retirement fund to help grow savings. And, you can politely ask your family and friends to contribute to this account instead of toys for birthdays, holidays, and other celebrations.

Andrea Woroch is a nationally recognized money saving expert, writer, speaker and frequent on-air contributor who is passionate about helping American families find simple ways to save more without drastically changing the way they live. life. Andrea has appeared on hundreds of popular shows across the country, including Today, Good Morning America, Dr. Oz, CNN, Inside Edition, and ABC World News, as well as hundreds of regional shows across the country. His advice and articles have been published in The New York Times, Time, Money, Cosmopolitan, Forbes, Huffington Post and many more. When Andrea shares tips on budgeting or smart shopping, she’s busy chasing after her two young daughters. Learn more about Andrea on andreaworoch.com and follow her on Instagram for daily money tips.

Source link


About Author

Leave A Reply