Parenthood is one of the most cherished and joyful feeling and couples are generally quite eager to plan everything perfectly for their special bundle of joy. However, in addition to great happiness and a sense of fulfilment, parenthood also brings with it loads of responsibilities. In most cases, these responsibilities might require individuals to make major financial changes. The changes might be so overwhelming for some people that it might lead them to adopt poor financial habits such as repeatedly availing cash loans online.
The sad part is that such habits can have really bad consequences, which might ultimately influence their credit score in a negative manner. This is definitely not a good way to g forward, especially since these individuals need to consider the fact that they are now responsible for the another person. Discussed below are the 5 effective measures that parents can take to ensure that their credit score does not see a negative slide in the wake of their new responsibilities.
1. Buy Only What The Baby Needs
Most parents want to give the best things in the world to their babies, but this does not mean going all out and buying everything under the sun. Parents need to understand that babies have limited needs and it is outright foolish and even wasteful to stock things that they might not use for many years to come. Parents also need to be mindful of the fact that babies tend to have an extremely fast growth rate, which means that they will outgrow their outfits and shoes only after wearing them once or twice. So, it is advisable for the parents to go out for baby shopping with proper planning so that they do not end up buying unnecessary things and risk placing themselves in grave financial trouble.
2. Switch To Automated Bill Payment
Whether it is paying their medical bills or making credit card payment, almost all financial tasks take a backseat during the first few months after the arrival of a newborn. Missing timely payment of bills or credit cards can have a direct impact on the credit score of the parents. This problem can be easily overcome by switching to automated bill payment long before the baby is due to arrive. This will ensure that the parents have at least one less thing to worry about besides keeping their credit score in the positive. With the payment history accounting for more than 1/3rd of the total credit score, spending a few minutes to set up the automatic payment of the bills is surely well worth the effort.
3. Think Twice Before Seeking More Credit
The extra expenses that accompany the birth of a child might seem too much to handle for some parents. In such situations, most parents tend to seek extra credit by applying for a new credit card or opting for online payday loans. However, such spur of the moment decisions can prove to be a truly bad idea, especially for parents with no means to increase their income. Extra credit is likely to create additional financial burden for the new parents and this can easily result in wrong financial decisions. Moreover, the stress of extremely tough terms of repayment combined with the high interest rates of payday loans might make the situation even worse. Hence it is important for the parents to think twice before applying for a cash loan or even a new credit card.
4. Don’t Delay Financial Planning Till The Very End
There is a long period of time between a woman getting pregnant and delivering the baby. Utilizing this time in proper financial planning can help parents avoid a lot of stress and shortage of funds after the birth of the baby. Couples should consider all the options available to them and the changes they will need to make to maintain their economic stability as new parents. In case of working women, the possibility of losing a regular income for a considerable period of time after the arrival of the newborn should be factored into the planning. When done well in time and in a proper manner, financial planning can help new parents stride through the economically difficult times post delivery in a smooth and stress free manner.
5. Establish The Priorities
One of the best ways to avoid a financial crisis and the chances of damaging their credit score is for the new parents to establish their priorities. There is a considerable difference between what is absolutely must for a child and what a child should have. It is important for the parents to be able to distinguish between the two so as to set the right priorities. The former should be given greater preference, while the later might be provided when there is no shortage of funds. Parents also need to set the priorities for their children according to their resources and the level of financial flexibility they can exercise with their credit score.