Three dangerous money mistakes you are making as parents

Raising a young child involves so many daily challenges that makes it’s likely you have little free time to think about your financial future. Which when done causes great damages to the later end of life and also your kids financial life when they grow-up.

Now is the right time to check those money mistakes you have being making as parents, and find out how to get your finances in other.

Money and kids
Money and emergency
Money and retirement

1. Money and kids

Kids are inherently expensive even for the most flugallt family and the most careful planners. And although your bundle of joy comes with a host of costs you need to prepare for, there is no reason to make having a baby even more expensive than it has to be.

According to a new study by the USDA, raising a child in 2011 was 23% more expensive than it was in 1960, over the course of a lifetime, parents can expect to pay about $234,900 to raising a child vs $991,723 in 1960 an increase of $40,000. Which is tremendously high.

You can break limit financially today

even with such figure can one thrive during the process of raising a child? Yes, is possible.

But this are five mistakes you should beware of and avoid so that you’ll have more cash in your pocket for the super important stuff, like investing and investing in your financial education.

A. Failing to plan in advance for baby expenses:

Finally, one of the biggest mistakes new parents make is failing to plan for the fact that kids do cost money. Even if you’re very careful with what you buy, after all, you will need diapers, your baby will need to eat, and someone will probably have to watch your baby from time to time, which either means child care or talking time off from work. You can’t plan for everything, but you can determine how much money child care or unpaid leave we cost your family and adjust your budget to accounts for it.

2. Splurging for fancy new baby stuff:

Walk into any big-box store and you’ll discover football fields of strollers, baby carriers, and various baby gadgets and gizmos. But do you need all of it? Not a chance from wipe warmers that makes gourmet baby food. It’s tempting to buy everything so that your little one has the very best.

But all the baby gear doesn’t come cheap. According to investopedia a new stroller costs an average of $400, while a new bouncy seat swing can cost $200 or more. Add to average cost of $1,100 for baby funiture and you’re out with $1,700 before the baby even makes it home from hospital.

The reality however is that people’s has being raising babies for many years without all this stuff- and chances are pretty good that your bundle of joy will be fine without 90% the baby product on the market.

If you’ve got a crib, some diapers, good clothes, and a place to change your baby, you’re probably good to go. After your baby is born and you get into a routine, you can figure out what the products would actually make your day-to-day life easier. And forward all those cash to your emergency fund or saving for investment.

C. Encouraging unrealistic expectations

We all know children who have a laptop and iPhone by the time they’re 12, but is that always a good idea? Probably not. Although some expect argue that there is no such thing as a spoiled child, (still am not saying a kid under 12 years with a laptop is a spoiled child).

But parents teaching kids that instant gratification is the norm can set them up for a lifetime of dissapointment and expectations that are largely unrealistic.

D. Not teaching kids about money

Kids who never learn about money may be destined for failure in real-life. What most parents teach there kids about money are things like.

….how to write a cheque, and later then wonder why money keep missing, there is more to money than this. I thought the first and the most important lessons every parent should teach there child “the difference between liability and asset” when a child know that liability take money from is pocket and asset bring money to his pocket it’s helps then delay gratification and become future oriented.

E. Digging kids out of debt

I understand that all kids naturally love there parents and want to help them start life on the right foot. And the high levels of debt that most young people have, alongside with low salaries and poor debt prospects, make it very tough for them to get ahead.

But actually footing the bill for your kids actually Hunt them more than it helps them.

Though it may be a little hard to take in. But believe me. Debt is actually a personal problem that masquerade itself in financial clothing, that why so many people has persistent problem with debt. Probably when you has a parent pay the debt for your child not before long time he or she has acommulate another bundle, the problem have not being deal with yet.

The hard way to help your young once is to watch them struggle finacially, why working with then build there financial intelligences.

2. Money and emergency

Many parents fail to prioritize their savings properly, this can lead to a serious money mistake that many people only recognize after an emergency. All parents should focus on setting up an emergency fund to cover: at Least three months of expenditure if emergencies occur.

Though many have read in some of our posts, about thoughts like “savers are losers” actually is true but it’s all about those who thinks saving will be enough to have a secured financial future. This is an old way of thinking that doesn’t take into account how money has change, and how in few years inflation can eat off there hard end savings.

But I believe it’s important to have liquid assets at hand so that when hard time comes,you don’t go for loan or be stranded. Six months worth of expenses is good, you don’t have to save an incredibly large amount every month. Start small and, before you know it, before you realize your emergency fund has been in good condition.

And is even better to authomate the emergency fund saving process. What do I mean? you set up your bank account to authomatically send money into your emergency fund, to take some stress out of the process.

You can break limit financially today

3. Money and retirement

According to the fifth annual Wells Fargo middle-class retirement study, one-third of middle class Americans doesn’t contribute to any form of retirement plan, not even the 401(k)s or comparable investment vehicle. Meanwhile, 31% claims they didn’t think they would have enough money to survive in retirement.

“You can borrow money to stuff your bills but can’t borrow for retirement,” that’s why allocating checks from each paycheck to paycheck toward your golden years is important. If you have a option you a choose a 401(k) account, since many employers will match a portion of your contribution. If not, pick a Roth IRA, it also give you a far more secure retirement. But there are also great and far great retirement opinion, but this requires financial education.

Since Money worths less and less each day through inflation. It’s better to invest in a asset were you receive ROI (return on investment) but I’ve said before you need to do more to be more.

If you invest in a asset with cash flow, you still own the asset and enjoy cash flow each month.