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Financial mistakes of new parents
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BY MARSHALL LOEB
MARKETWATCH
If you’re planning on a new baby in your house, your finances should be in order. In addition to all the responsibilities, babies come with a long laundry list of expenses.
If not handled properly, these can become overwhelming or at least detrimental to your financial health.
From Kiplinger.com, Erin Burt warns new parents about these three financial mistakes:
■ Not making a budget. With all the supplies you’ll need to buy, from diapers to car seats to baby clothes, make sure to take a step back and determine what you need versus what you want. One good resource is “Baby Bargains” by Alan and Denise Fields. This book gives reviews on hundreds of baby products and offers advice on what and what not to buy.
Remember, whatever you do, don’t rack up debt while preparing for baby.
■ Ignoring life and disability insurance. Both forms of insurance could come in handy for your family should anything happen to you.
Buy enough life insurance to equal four to five times your annual salary.
For disability, check with your employer. Many employers offer disability plans that cover up to 60% of your salary.
You may need to buy a supplemental policy. In the case that your employer doesn’t have you covered, you should buy your own.
■ Putting college savings over retirement. It’s just smart financial planning to put away for your retirement.
Paying for college can be financed by loans, but there won’t be loans for you to live on in your golden years. You’ll have to rely on your adult child to support you, by that point.
After plowing 10 percent of your take-home pay into your retirement account, only then should you consider contributing to baby’s college fund.
Editor’s note: Share your money-saving tips by sending them to moneytips@ timesshamrock.com. Your tips will be featured in the newspaper and online.
If not handled properly, these can become overwhelming or at least detrimental to your financial health.
From Kiplinger.com, Erin Burt warns new parents about these three financial mistakes:
■ Not making a budget. With all the supplies you’ll need to buy, from diapers to car seats to baby clothes, make sure to take a step back and determine what you need versus what you want. One good resource is “Baby Bargains” by Alan and Denise Fields. This book gives reviews on hundreds of baby products and offers advice on what and what not to buy.
Remember, whatever you do, don’t rack up debt while preparing for baby.
■ Ignoring life and disability insurance. Both forms of insurance could come in handy for your family should anything happen to you.
Buy enough life insurance to equal four to five times your annual salary.
For disability, check with your employer. Many employers offer disability plans that cover up to 60% of your salary.
You may need to buy a supplemental policy. In the case that your employer doesn’t have you covered, you should buy your own.
■ Putting college savings over retirement. It’s just smart financial planning to put away for your retirement.
Paying for college can be financed by loans, but there won’t be loans for you to live on in your golden years. You’ll have to rely on your adult child to support you, by that point.
After plowing 10 percent of your take-home pay into your retirement account, only then should you consider contributing to baby’s college fund.
Editor’s note: Share your money-saving tips by sending them to moneytips@ timesshamrock.com. Your tips will be featured in the newspaper and online.
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| Women face most financial risk in retirement |
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