Why People’s Debt Can Increase After Kids
Some people have perfectly good credit scores and have a great financial situation until the day they become parents. People with kids are statistically shown to carry a significantly greater amount of debt. This comes a no surprise of course since they are welcoming a new mouth to feed into their household. Studies show that parents spend about $800 a month extra per child on average. That’s a big shift from having to spend only on yourself and your partner. Can you anticipate this kind of increase in expenses? Or will you go into debt?
Some people just can’t seem to figure out how to make it work and there are a variety of reasons why. Let’s take a look at some of the biggest reasons why new parents’ debt can increase after a baby and how you can avoid it.
They Don’t Put Away Savings
Having a baby means having to purchase all of the gear before they arrive. They’ll need a bed and everything that goes in the room with a bed. Bottles, swings, vibrating chairs, carriers, diapers, changing tables, and about approximately 5,000 other things.
It’s important to put away savings so that you can anticipate these costs when your little bundle of joy arrives instead of just running it on a credit card and sending yourself into spontaneous debt. Ideally, you’ll already have savings to begin building from but when you become pregnant you can start saving more aggressively.
Luckily pregnancy can lead to being much less social so this can be an advantage to your wallet. Take advantage of this time not going out and buying drinks and food and put it away into your savings.
Lack of Child Support
Some parents are living on one salary alone to handle the new expenses of a baby on top of their own. If one parent decides not to be a part of the child’s life that can mean a huge problem for the parent left to fend for themselves unless they have an extremely well-paid job.
Even for someone with a well-paid job it can prove to be a challenge since you’re not always guaranteed maternity leave or paid time off while you raise the baby. Daycare costs are getting higher every year, and without another parent to help with childcare, that means you’re going to need to pay for a lot of it. This can lead a mom or a dad straight to their wallet for the credit card to save the day. Unfortunately, this means they are about to have to pay for debt on top of all the things they are already paying for.