Dollars and Diapers: Money Mistakes Every Parent Should Avoid

By Krystal Brown

Becoming parents for the first time is an overwhelming feeling, and you want to buy everything for your kid! However, the chaos and new experiences should not let you get off-track from your financial planning.

Here are the common money mistakes every parent should avoid. After all, long-term financial stability is the goal!

Overspending on Clothes and Random Stuff

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It’s true that parents want to buy new clothes, shoes, and bags for their baby. There’s no better feeling than seeing your toddler dressed up in cute outfits.

But the truth is, babies will soon outgrow these clothes and shoes. As babies grow, these things will be of no use. These also include cool toys and gadgets.

Not Considering Life Insurance

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Not considering life insurance tends to be the biggest financial mistake of new parents. Parents should have their life insurance to avoid financial stress.

In case something happens to the parents, children will have enough financial stability in the insurance to look forward to their future.

Investing in life insurance is a great idea to save money in case of an emergency in the future.

Buying Everything New

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Buying new things for children feels good, but the truth is that baby products can be expensive. A stroller or fancy gadget can cost much more than expected. Plus, your toddler won’t use it for more than a few months.

Websites like Craiglist can help you find used items for toddlers. While buying new stuff is good, opting for gently used stuff if you’re tight on the budget isn’t a bad idea either.

Not Making a Budget

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After having a baby, the chaos, work, and sleepless nights can make you neglect a lot of things. Don’t let your budget be one of them!

Making a budget according to your expenses and savings is necessary to save money in the long run. Spending money blindly on your child will make you lose the record of your expenses.

Not Changing Pre-baby Habits

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Another big mistake of new parents is that they don’t change their money habits after having a baby. For example, you and your partner might have a habit of eating out regularly and spending money on lavish items.

After having a baby, you need to change these habits. Otherwise, you will need to earn more to meet your expenses.

Not Considering Savings Plans

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Savings plans are a huge benefit for saving money for the future. You can consider retirement savings plans and education savings plans for your children.

Consulting an organization will help you make complete savings plans, which will help you save some bucks for your children’s future.

Spending Too Little

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While spending too much isn’t preferable, spending too little on your toddler isn’t good either. You should provide your child with the basic things while making sure they are not deprived of the basic necessities. 

Thus, you can buy new clothes and toys for your child. Just make sure you don’t overspend on such stuff and ignore other necessities. 

Buying a New Home

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Buying a new home is a good idea only if you have enough savings for it. 

After having a baby, the expenses increase a lot. In this case, buying a bigger house as well will end up increasing costs. All of this can become more troublesome if you’re already bound with previous debts.

Not Talking About Money

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Most parents avoid talking about money with the thought that they might end up messing things up. The truth is, avoiding the conversation will not help you save more.

Apart from their busy routines and hectic work schedules, parents should sit together to track their expenses and decide where they need to spend more money. 

This strategy will help them align their expenses.

Not Considering Emergency Funds

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Having emergency funds is a wise safety decision. You should be prepared for any medical emergency or emergency trips.

For this, setting up emergency funds is necessary. Having these funds will take away the stress of paying bills when your child is sick.

Becoming a Stay-At-Home Parent

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With the rising living costs, surviving on the income of a single person is becoming difficult for families.

Therefore, it is better that both parents do jobs to earn more for the family.

However, it’s also true that childcare costs are high, and you cannot ignore them. If one of the partners is earning enough to feed the whole family, the other can choose to stay home and take care of their child.

Ignoring Your Own Financial Needs

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Having a baby does not mean that parents should ignore their own needs to fulfill the needs of their baby.

Parents should also enjoy themselves. You can still have dinner outside once a week or visit the spa for a relaxing massage often.