From credit to regular spending habits, it can be easy for financial patterns to change once you become a parent. Whether you’re the parent of a newborn or a young adult who just went off to college, it can be easy to make certain financial mistakes without even realizing the possible repercussions.
Not using the right credit cards
A few years ago, it may have made sense to have a credit card for that one department store because you shopped there often. But if you find yourself shopping at a particular store less frequently now (or not at all), you may want to consider canceling that credit card. Instead, opt for a store credit card that can offer you perks and rewards that better suit your lifestyle now that you’re a parent.
Cosigning on loans
It can be tempting to want to help out your child for their first car loan or credit card, but think very carefully before doing this. If your child is unable to make timely payments, your credit score will take a hit. If they’ve never had credit before and you’re trying to help them build it up, consider just issuing them a credit card instead. You don’t have to let anyone else use it—simply issuing a credit card to someone else can help their credit if you’ve had that card for a long time and continue to make timely payments. Or, get your child a secured credit card. These are both ways to help build up your child’s credit, and eventually, you won’t even need to cosign for them.
Not taking advantage of tax benefits
If you have children, you may be able to take advantage of various tax benefits when tax season rolls around. Some parents, however, handle their own taxes and completely overlook these advantages. Next time it’s time to file taxes, you may want to work with a local accountant, so that you know just what you may be eligible for when it comes to tax breaks and deductions.
Not saving for college
It’s never too late to begin saving for college, but too many parents wait until the last minute, which just makes it that much more overwhelming. Look into a savings plan as soon as possible, and you may be able to lock in today’s rates for the future. Alternatively, if you’re receiving structured settlement payments, you can sell some or all of them and receive a lump sum of cash now. The lump sum payment you receive can be used to help pay for your child’s college tuition. Contact us today to learn more about how you can receive a lump sum for the sale of your future payments.
Babies and small children grow up quickly, so spending a lot of money on shoes and clothes tends to be wasteful; what fits them today may not fit a month from now. Additionally, young children can sometimes be rough with their toys, so save the fancier (and more expensive) gadgets for when they’re a bit older.
At Peachtree Financial Solutions, we understand that bills and expenses add up, especially when you start a family. If extra money could come in handy and you’re receiving structured settlement or annuity payments, we can help. Contact us today for more information on turning those long-term payments into a lump sum of cash.
Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.