Becoming a parent for the first time turns your world upside down. You’ll probably notice that within a few months of becoming a parent, your priorities will have shifted completely, and your main focus in life will be securing a bright future for your child.
Your financial situation is also likely to change when you become a parent. There are many different expenses that are necessary, from clothing to food, to potentially buying a bigger home for your growing family. Therefore, it’s important that you budget appropriately and plan for the future. The following is an overview of the most common financial mistakes made by new parents.
They stock up before the baby is born
While it’s tempting to get all of the shopping done before the baby is born, many soon-to-be parents go overboard on purchases. You may find that your family has many things that you can use second-hand, or that much of the things that you buy will not be needed.
They don’t save for their child’s future
It’s usually better to skip the fancy strollers and extra outfits and put money into a savings account for your child’s future. In years to come, they will thank you for being able to contribute to their education, pay for extracurricular activities, or simply to have provided them with a financially secure childhood.
They don’t plan their estate
One of the most important things that a new parent should do is to create or update their estate plan. In your estate plan, you do not only state who will inherit your estate after you pass away. You also can state who you would want to be the legal guardian of your child in the event that you pass away.
Making sure that your child is protected and cared for by people you trust is vital. Make sure that you create or update your estate plan if you have not already done so.