Writing for TheStreet the past 12 years, I’ve often cited Andrea Woroch, a major time money-saving expert whose mission to assist American families find simple ways to save lots of more – without radically changing their lifestyle.
This week, Woroch points out that September is that the commonest birth month of the year. it is also an honest time for brand spanking new parents to believe the financial side of their parental responsibilities.
“Becoming a parent is an exciting time for couples, but it is also a stressful one because of sleepless nights and therefore the endless costs that accompany caring for a baby,” Woroch says. “In fact, the newest Cost of Raising a toddler research from the USDA found that the typical middle-income family spends roughly $12,300 to $13,900 on child-related expenses annually .”
“Given the present economic issues caused by the pandemic with 59% of U.S. households experiencing a discount in income since March, it’s more important for families to carefully craft a budget, anticipate all potential expenses and mind their spending.”
To get that task accomplished, Woroch advises young parents to avoid five common money mistakes new parents make. She also provides some action tips to bypass money mistakes and keep moving forward, from a financial household management point of view.
Mistake 1: Going bigger. Upgrading your home and car to accommodate baby seems practical, but it adds an unnecessary financial burden during an already stressful time.
“The reality is, babies don’t need much space,” Woroch says. “Since there are many new expenses that accompany caring for an infant like diapers and wipes and unexpected healthcare bills, it’s best to settle into your new life first and suits the new budget before making major upgrades.”
Mistake 2: Underestimating childcare costs. Parents are watching dispensing $565 per week for a nanny and $215 for a daycare center, as reported by Care.com.
“But beyond the working day, parents overlook the extra care they’ll need on nights in weekends which may add up given the typical hourly rate for a babysitter is around $15,” she adds. “To save, found out a babysitting exchange with other families in your neighborhood or with relatives who have children round the same age.”
Mistake 3: Ignoring life assurance and estate planning needs. nobody wants to believe death once they bring a replacement life into the planet , but life-insurance and estate plans provide financial safety nets for your family.
“When looking into term life assurance , consider getting 5 to 10 times your annual salary in coverage. for instance , a healthy 35-year-old woman can purchase a 20-year, $500,000 term life assurance policy for about $20 per month,” Woroch notes. “Plus, you’ll set it up right from home through sites like Haven Life, which may be a life assurance agency backed by MassMutual, makes it simple to shop for affordable term life assurance online.”
Mistake 4: Overspending on gadgets. New parents get bound up in buying new clothing and infant gear, hoping these gadgets make caring for baby easier but many of those items are used for a brief period of your time so it’s better to borrow or buy used.
“For all those essentials you can’t avoid buying sort of a seat or crib, search for deals online first. for instance , sites like CouponFollow.com offer online coupons to many popular retailers. you’ll also snag sales like 20% off select baby gear from Britax at BuyBabyBuy.com,” Woroch says.
Mistake 5: Postponing college savings. College planning could also be the last item from your mind once you are knee-deep in diapers, but the sooner you begin , the better it’ll be to satisfy the target savings goal.
“The longer you wait to start out saving, the extra money you’ll got to put away monthly ,” she adds. “Remember, saving anything is best than nothing albeit it’s just $20 a month. Plus, opening a 529 College Savings Plan helps your savings grow sort of a old-age pension .”
“In lieu of toys and other gifts, ask family and friends to contribute to the present college fund to create it up faster,” Woroch notes.