Bringing home the newborn it feels like the home is suddenly filled with magic in the air. It’s a time for celebration and thinking about the future. One day your little one will grow up and they will need more things to live. They’ll eat more food, need new clothes almost every year, and they will be going to college one day. So it’s best to start off your family life with as little financial burdens as possible. This doesn’t mean that you can’t borrow or you can’t ask for help moneywise, but you should avoid as much debt as possible. The latter years of your parenting will therefore have much less problems and you can instead focus on improving the life of your children instead of maintaining it.
Make a family agreement
First-time parents may need to be helped by their parents. And this support can come in more than just babysitting. If you have a good relationship with your parents, you should try to set up a date where you can make a financial agreement. Instead of going to the bank for a loan, see if your parents have the willingness to support you financially. Friends and money don’t mix but when it’s family there is a different level of trust. It’s far better for your parents to give you half the money a loan could supply you with, but with no added interest and maybe even no time limit on when you have to pay it all back. It’s kept within the family and no debt is therefore mounted.
A quicker option
Credit cards can be brilliant tools when you are in a pinch. Loans take a bit of time to be given the green light, and some loans are going to need extensive credit history checks. Therefore credit cards are often the better choice for a family that needs some extra money and quickly. However, the repayment programs are often much harsher than loans. For one the interest rates are far higher and the companies and banks that give out credit cards are adamant about short repayment periods. Look at a credit card debt calculator to figure out what amount you will eventually pay back. Different companies have their own standards and terms and conditions, so it’s useful to know how much you would pay and what kind of interest rates you would be looking at before you take a card out.
Look in the mirror
Before you even had a child, you should have worked out if you are both ready financially. No one can ever truly hold your hand when you have a child and need to look after him or her. You need to become more responsible, live a frugal life, save wherever you can and have a new mentality of budgeting and changing things to live well within your means.
It’s a scary but exciting time when you have a kid for the first time. See if your parents are willing to loan you some money just for the first year or so instead of getting a loan from a bank. On the other hand, you can use credit cards to help pay for the things you need and use a calculator that helps you plan repayments effectively.