Top 10 Money Mistakes New Parents Make

Falling into the must-have traps: This is similar to the previous point but causes a lot more damage because the cost is high. I am talking about the popular expectation that a family with kids needs a bigger car, a bigger house and a nursery that is completely set up before they welcome the baby.

Forgetting what is more important, financially — your retirement: Saving for college is important, but even more important is saving for your future. You can get a loan for college, but there isn’t one to fund your retirement.

Ignoring college savings: After you fund your retirement and other immediate goals, make it a priority to rework your budget to find money to start a college savings account. Start small and set it up to automatically increase the contribution with every birthday. If you get cash gifts for birthdays and other holidays, make sure to immediately set aside a portion of it to go to the college fund.

Postponing estate planning: Many parents assume that, if they don’t have a big estate, they don’t need a will or any type of estate planning. If you have any assets and you want your beneficiaries to receive them without a lot of hassle, set up a trust or a will. When you add a minor child to the mix, it gets even more complicated if you don’t have anything set up. Who will get custody of the baby in case you go? How will your money be spent? Do you want your child to get access to the money right away or do you want to set some money aside for his or her education? Do you want your child to get all your assets or do you want to donate some to a charity? Meet with an estate planning attorney if you have not already; the first meeting is most likely free and you will be able to figure out how much assistance you need to put a plan in place.

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