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Common money mistakes parents make

From figuring out how much you can spend each week to setting aside money to achieve long- and short-term savings goals, managing family finances can be a lot to balance. When creating your family budget, avoid these common mistakes.

Couple looking at finances

Not cutting costs

When you have children, your lifestyle changes out of necessity. However, one common money mistake that parents make is not adjusting your spending habits to fit this new lifestyle. For example, if you and your spouse were accustomed to going out to dinner and a movie once a week, that becomes an even bigger splurge, because you now have to factor in the cost of a babysitter. That extra cost adds up significantly over time. Plus, your expenses will go up — from food and diapers to clothing and toys — with each child. Find ways to cut costs and to live a more frugal lifestyle. Nights out can become special splurges, and you can cut costs by taking steps like shopping sales and using coupons.

piggy bankNot saving for retirement

As a parent, you want to put your child’s needs first. But when it comes to saving for the long term, that might be a mistake. Many parents budget for their child’s college costs rather than socking away extra money for retirement. This practice is fine, as long as you’re putting away some money for your retirement first. If you’re not, it’s time to revisit that budget. While financial aid is available for college, it isn’t available for retirement. Your family budget should prioritize saving for retirement first, and then saving for college.

Not discussing money with your kids

It’s critical to talk about money issues with your children. You don’t have to stress them out by discussing your personal money woes if you have them. But it’s important to teach your children about saving money versus spending money. Explain to your children how credit cards work, how debt can accrue and how interest works. Give your kids an idea of how the family budget works, and take them shopping so they can see the choices you make to stick with that budget. Help your kids become financially literate at a young age so that they’re able to make good money decisions for themselves.

Read more about family finances

Talking to kids about financial struggles
Teaching your kids about money and debt
7 Ways to save money on groceries, kids clothes and more

Please note: Articles and other information included on this website are intended for the general interest of our readers, and are not intended to provide, and do not constitute, legal, financial, health or other advice. Gerber Life makes no claims, representations or warranties as to the accuracy, completeness or appropriateness of this general interest information for your particular circumstances. If you need legal, financial, health or other services, you should contact a duly licensed professional.

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