We recently shared some thoughts on baby budgets in response to some frequent reader questions. Since that’s always a hot topic around here, today we’re sharing some more financial advice for new parents!
Not gonna lie, kids are expensive. However, I think it puts things in perspective to think of that expense the same way a mortgage impacts you: it always feels like a stretch at first, a HUGE commitment. Slowly, though, priorities shift. You make room for it in your life and realize that it’s doable. It’s not completely earth-shattering, especially as you naturally transition away from dining out and spending money on dates, events, luxury travel and other singles or couples-life stuff. Eventually you get your act together and start making sure the entirety of your budget is wisely used to further the needs of your family.
Based on our experience, here is the top financial advice for new parents that we wish we’d known sooner.
Financial Advice for Parents to know BEFORE Having Kids
- We bought a house the month before our second son was born. At the time, it felt like a financial leap. Weird timing? Yes. But it feels SO good knowing that we are investing in something that our boys can own someday, securing their future instead of paying rent to someone else each month.
- Speaking of securing the future, get that college fund going NOW. If you start early, you really don’t need to contribute much monthly to have a sizable savings before your child heads off to university.
- Many parents choose to run their own business from home so they have more time with their kids. Get your ducks in a row from the start: form an LLC, hire a CPA and put your assets into a trust. Otherwise, your business activities could put your family’s personal belongings at risk if you happen to get sued.
- The cheapest deal is not always the best option. We bought a compact car when we had our first baby and are kind of wishing we’d sprung for a van right off the bat. Our family has outgrown that vehicle and now we’re facing ANOTHER car purchase just three years after the first.
What financial advice would you give to fellow new parents?