Babies could prove to be expensive. As per the calculations made by the U.S. Department of Agriculture, you could end up spending over $12,000 during the very first year of your child’s life. But do you think you should spend so much money especially when you are alone and have a new responsibility for securing a steady future for your newborn? Here are some financial mistakes to avoid so that you do not fall into the debt trap. For a single lady who has just become a new mom, you need to tread with caution. You must be overjoyed to have your baby but it is for your baby’s future security that you need to curb your spending and stop accumulating debts. You need to save money and stay away from financial mistakes that could cost you, your peace of mind.
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Money Mistakes: Purchase ‘Must Haves’ Which You Do Not Need
As per https://studentloanhero.com, “I wished I had known as a new mom all the things that are a waste of cash for babies,” said Carly Fauth, the head of marketing at financial education website Money Crashers, citing Diaper Genie systems and bottle warmers. “Diapers need to go straight into the trash,” Fauth said. “And a pot of hot water will warm a bottle just fine.”
Do not go overboard while spending for your little one. Do not make the mistake of buying things that are not necessary. For instance, many moms make the mistake of buying a costly glider rocking chair. You must realize that most of your rocking the babies and nursing are done in bed or while walking around. You could have kept aside the money for your child’s college savings account. You need to spend wisely. Do not go on a shopping spree. As a single mom, your chief concern should be to give your baby a comfortable life without falling into the vicious cycle of debts.
Before you invest in an item or gadget for your newborn as suggested by somebody, it is a good idea to think twice. Ask yourself if you really need that item and whether the item would really make a difference in your life and make things easier for you. Moreover, it is crucial to examine the possibility of using the money towards a long-term benefit for your baby that could impact his life positively.
Money Mistakes: Not Including Necessities in the Baby Registry
You must request clothes, diapers, and other necessary items. As per the findings on Investopedia, you could expect to actually use over 2,700 diapers in your newborn’s first year. If the cost of per diaper is 20 cents that could be setting you back by about $540. Moreover, if you add roughly $20 every month for buying wipes, you would end up spending roughly $780 during your newborn’s first year simply for cleaning and covering his bottom.
It is a good idea to have those expensive necessities gifted to you. It is best not to use your own money. Get them gifted to you as that could be a huge financial help. Wipes, diapers, formula, bedding, and other such necessities could be boring but it is a wise move to request such items on your kid’s registry. That would be making a considerable difference in the bottom line, especially if you are a single mom struggling with financial issues and student loan debts that need to be paid back consistently and timely. Browse through debt consolidation ratings before choosing a debt relief or debt management method and the right service provider.
Money Mistakes: Purchasing New Baby Items
One of the gravest mistakes new moms are known to commit is buying so many new outfits for the little one. Your baby would be growing out of those outfits in no time, even before you could realize it. He would hardly wear all those outfits as he is most of the time comfortable in onesies. This is a serious spending mistake on your part. This sort of spending mistake could be applied to some other items like food grinders, toys, mattresses, bedding, strollers, cribs, and high chairs. Feel free to buy second-hand items but you must thoroughly clean and disinfect all items for baby use to rule out infection.
Another important tip is to borrow your baby’s items instead of purchasing second-hand stuff. For instance, it is a good idea to borrow your baby’s bassinet from any close friend or relative. However, one exception to the rule is when you are considering a car seat for your baby. This is supposed to be critical life-protecting equipment for your baby. It is best to buy a new one to ensure total safety for your baby. Even if you are buying a second-hand car seat, it is best to go through the checklist provided by the National Highway Traffic Safety Administration to assist you in assessing its risks.
Money Mistakes: Not Bothering to Set Up a Separate Baby Fund
Financial experts and debt relief specialists always suggest setting up separate high-yield savings accounts for your baby. You must automatically have funds transferred there every month to have enough savings to spend on your baby’s necessities. You must be wondering how to find baby fund money. You need to examine meticulously your finances well in advance. You may trim your expenses effectively by using coupons. You must opt for low-cost options whether it is for eating out in a restaurant or for entertainment. You may ask your relatives and friends to help you with the baby fund by requesting them to give money for the baby shower.
Money Mistakes: Do not forget the retirement fund
It very well may be most enticing to pry open your retirement reserve and guarantee yourself to get it all around loaded later on. With that approach, customary commitments to your store may likewise stop. While the facts demonstrate that you may have numerous years till retirement, your retirement corpus depends intensely on the intensity of aggravating enthusiasm for its development. Abridging the number of years diminishes your corpus generously. Rather, search for substitute sources to get the important accounts. Spare more, spending plan your spending, use charge card prizes to your advantage, get suitable protection spread and make brilliant ventures for your kid and yourself.
Conclusion: Never Make the Mistake of Going Ahead without a Plan in Place
It is important to have a proper budget and an effective debt repayment plan in place before you start repaying your debts. You need to meticulously examine your finances to identify places where you could make slight adjustments for freeing up some money for paying up your outstanding bills and debts. Do not choose the wrong priorities at this juncture. Remember you have to look after the baby’s needs and comfort singlehandedly. If you wish to give your baby a secured and steady financial future, your topmost priority should be getting rid of all your existing debts. Avoid upgrading your phone or getting a new car. Make small sacrifices to eliminate your debts. You must consider developing a tunnel vision for achieving the goal of becoming debt-free.