8 Money Mistakes New Parents Should Avoid
CNN/Stylemagazine.com Newswire | 10/25/2017, 7:47 a.m.
(CNN Money) -- It's a thought many new and soon-to-be parents have: How can something so tiny require so much stuff?
While you might not need all the gear you've stocked up on, there's no getting around the fact that having a baby will bring changes to your budget.
"A baby brings out the bad money habits -- if you have them," said Eric Roberge, a certified financial planner and founder of the firm Beyond Your Hammock. "If you aren't controlling your spending and don't have a budget, when you bring in a child, more emotions come into the picture and you tend to spend more money. It exacerbates an already existing problem."
Every new parent wants the best for their little one, but that doesn't mean you have to go broke doing it.
Here are money mistakes experts advise new parents avoid:
1. Caving to parental pressures
You aren't compromising your child's future if you don't buy every new gadget that claims to make the baby smarter, less fussy or a champion sleeper.
"Don't compare yourself or your child to other moms and other peoples situations. Do the best you can," advised Alexandra Hopkin, a financial counselor with Gen Y Planning.
2. Not planning for new costs
Sure you used to cook all your meals, clean the bathroom every week and do all the ironing. But the first few weeks with a new baby tend to be a sleep-deprived blur.
"As a new parent you are probably going to be tired and might not be able to take care of things around the house like you once did," said Monica Sipes, a certified financial planner at Exencial Wealth Advisors and new mom to a two-month-old girl. "So maybe you hire a maid, or lawn service or other services that will free up your time."
But that convenience comes at a cost, which is why experts suggested adding some extra spending to your budget to make sure you won't be left in a cash crunch.
3. Not padding your emergency savings
Unplanned expenses are even more likely to crop up with a baby. Those bottles you spent hours researching? The baby hates them. Or the stroller you agonized over doesn't seem to be the right fit.
"Definitely make sure your emergency fund is fully funded," said Roberge, who recommended having at least six months of expenses saved up.
Having extra money stored away can also help make the transition back to work easier.
"It's hard for moms to know whether they will want to go back right away until they have the child," said Hopkin. "This savings gives you some leeway if you want to take unpaid leave."
4. Buying too much house
The decision to start a family is often preceded by purchasing a house, and many new homeowners don't take into account the future expenses they incur after having a kid.
"They don't necessarily plan for increased child care expenses when deciding on a manageable monthly mortgage payment," said Roberge.