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Financial Mistakes Made by Parents
Use these tips to avoid pitfalls so your budget will grow along with your children.
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Have the right size house that fits your budget.
Homes have gotten bigger, even though the traditional family size has gotten smaller. Try to do more with less. Consider having your children share bedrooms for a few years or convert your basement into useable living space. If you've outgrown your home, look for homes in affordable neighborhoods.
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Get the right vehicle for your family.
Research fuel economy and consider buying a used vehicle. Buying a used car that's just one year old can save you money. Consider keeping your vehicle for a longer time period than frequently trading it in for a new one. Auto Research Center »
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Don't overspend as new parents.
Since new parents aren't experienced with what really is needed, overspending and wanting everything to be perfect are common trends. Come up with a budget, and be willing to shop at garage sales, thrift stores and consignment shops. Remember that items are frequently used for a year, and with clothing, even less. Accept hand-me-downs from friends and family. Baby showers are also a good way to acquire needed items.
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Crunch the numbers to determine if it's more affordable to stay at home or work.
Many parents oversimplify this question by being too clear cut—if one parent barely earns enough to cover child care costs, staying at home is assumingly the right fit. However, many financial factors are left out of the decision, including how much it would cost to replace the benefits package provided by an employer, which typically accounts for 35% of salaries. Factor in commuting costs as well as other work-related expenses, such as wardrobe.
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