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Planning your family’s financial future—five mistakes to avoid

November 2019

If you’re recently married or a parent to-be, congratulations! You have an exciting future ahead of you. To always keep your family financially secure, watch out for some of these common money mistakes:

Thinking only about short-term expenses

It’s easy to get caught up in all the little costs that hit you every week. But don’t forget the long-term expenses for your family. If you want to buy a home some day or send your kids to college, you’ll need to start planning now.

Establish money goals with your spouse. Make sure you’re on the same page about what you want to achieve in life, and figure out how much you’ll need to save to afford those goals.

Letting your budget “work itself out”

Creating a framework for your money is crucial. If you’ve managed to more or less get by without managing your cash, you might be surprised by how much money you’re wasting on things you don’t really need.

Start tracking your expenses by keeping an eye on your checking account activity. Identify areas where you can cut back, and put the extra money into savings (you’ll need it to meet your family’s financial goals).  

Ignoring savings perks

If you’re a newlywed, take a look at the plans offered by your insurance or cell phone providers. Those family plans you’ve always ignored? They may now apply to you. If a provider can bundle multiple contracts into one plan, it usually means reduced costs for you.

Married couples and new parents may be eligible for tax breaks as well. Don’t leave money on the table. Talk to a qualified tax professional to learn more.

Failing to ask about your employer’s leave policy

After you have a baby, you probably won’t be eager to rush back to work. The downside to taking time off? It may affect your income. If you’re pregnant, find out if your employer offers a parental leave policy (or if you can collect disability).

Some companies may provide partial paid or unpaid leave policies. No matter your situation, it’s important to know what to expect so you can start making financial plans as soon as possible.

Not adjusting for baby expenses

No doubt about it, your new baby will change your life—and your finances. Don’t wait and see how your spending habits differ. Otherwise, you may have to dip into your savings or rack up credit card bills.

Start planning now for expenses such as a stroller, diapers and if you plan to go back to work—child care. While the costs may seem overwhelming, you can keep your budget in check. For example, shopping for gently used clothes or participating in clothing swaps with other families can drive down one of your biggest baby expenses.

Growing your family is exciting. While you can’t anticipate every cost, you’ll be able to save for the things that matter most with a little financial planning.

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