However, it is easy to avoid this pitfall by learning from mistakes other parents have done. This guarantees a more comfortable life and more peace of mind. With your finances under control it is easier to budget and bring up your new family without much hassle.
Below are some of the most common mistakes to avoid as a parent to ensure you live a quality life:
The demands of modern lifestyles are many and as a parent you might realize belatedly that you were too steeped in work to even realize there were new financial responsibilities on the way. In fact some parents only get to see their kids after they have been born due to work commitments out of their home towns.
However, you can create financial strategy early enough by talking to a financial advisor to determine how your finances will change once the family starts expanding.
2. Ignoring Increasing Debt
Debt is as American as American pie as one analyst observed recently. A 2015 report by Federal Reserve Bank of New York the average household debt in the U.S is $132,529. The level of debt has increased by 10% according to the U.S BLS. Most new parents have a source of income and accessing credit is easy.
With a credit card it is easy to accumulate more debt and if you welcome a new member into the family without controlling such debt the repercussions can be devastating. It is important to look at debt control measures such as debt settlement to avoid saddling the household with debt. A new parent should endeavor their debt to manageable levels.
3. Overlooking Tax Credits
Did you know you could enjoy tax credits as a parent? For instance, child tax credit and dependent-care credit can help you save a lot of money that can go into other aspects of household expenditure. If you are unsure about such tax credits talk to a financial consultant who will guide you on how you can claim such benefits.
4. Failure To Invest In Life Insurance
What are your priorities as a parent? Should you invest in a personal loan for your vacation or life insurance coverage for your family? A 2015 Insurance Barometer Study shows life insurance has fallen down to no 7 in terms of financial priorities by households with 60% of parents seeing no need for such cover. This is the worst mistake you can make because you don’t know what can happen tomorrow. Always protect your family in case you leave them behind.
These are just a few of the financial mistakes you should avoid as a new parent. For better quality of life reduce debt, invest in life insurance and always plan ahead.
James Lou is a debt settlement consultant based in New York. He has over 24 years in the industry. Lou is also an avid writer and mentorship speaker in the country.