September is typically considered the “baby boom” month of the year, and as every parent knows, that little bundle of joy is not cheap.
The average middle-income family can spend nearly $14,000 on child-related expenses every single year, according to the latest “Cost of Raising a Child Report” released by the federal government.
Consumer Finance Expert Andrea Woroch broke down some spending mistakes new parents tend to make and how to avoid them.
- Going bigger: New parents tend to think they need to move into a bigger house or buy a bigger car. Adjust to the new lifestyle before taking on bigger expenses. There may be instances where you do need a bigger car, but consider to look at costs, such as comparing car insurance or getting a used car.
- Overbuying baby gear and clothing: There are so many gadgets that companies want parents to buy, but they only use it for a few months. If anything, borrow things from friends or family. Make sure you spend money on necessities (strollers, car seats) and you can find deals.
- Ignoring the “what ifs”: No one wants to talk about death, but you need to prepare ahead if there were life-changing events. Look into term life insurance policies.
- Underestimating child care: Consider setting up a nanny share with families who have kids the same age. Or consider a babysitter co-op.
- Putting off college planning: The sooner you start saving, the less you have to put away every month.