Mums (and dads) want the best for their children. However, while they’re usually careful about things like healthcare, nutrition and education, they often don’t realise that their financial mistakes impact on their children too.
The first big mistake that many parents make is to use credit cards to make purchases. Studies have shown that people will spend as much as 30 percent more when they are shopping with ‘plastic.’ Even people who shop with debit cards tend to spend more – but at least they only spend money they already have. Credit cards should be used for savings (they offer excellent interest) and for emergencies only. Pay them off and keep them out of your wallet so you aren’t tempted to impulse buy with them.
The second big mistake many parents make is to continue with their ‘live for today’ lifestyle. It’s okay to be spontaneous and to have fun. However, when you get older, and especially when you have children, you have to think about tomorrow too. If you’re living from salary to salary, and have no savings to speak of, then you’re putting yourself and your child at risk. You need to start saving, even if it’s a small amount every month, for things like university expenses, for unforeseen costs as your child gets older and for your retirement. You don’t want to be a burden to your child later on, do you?
The next big mistake many people make, especially those with kids, is to mistakenly think that debt consolidation is a fix all solution. Debt consolidation can work, but it means that all of your assets are tied to your debts and one or two defaults can cause you to lose everything at once. There are also often hidden costs and fees involved and it can make your problems worse if not treated correctly. The best advice, before taking any kind of drastic action about debts, is to speak to an independent financial advisor.
Next on the list of money mistakes many mums make is not addressing their salaries. Many women – particularly mums – aren’t earning what they should be in their careers. This could be because the company is at fault, but often, it’s simply because women aren’t assertive enough when it comes to asking for what they deserve. Do a little research and check what other people in similar positions with similar skills and experience are earning, and then set up an appointment to discuss your salary. Remember, being a mum is nothing to be ashamed of and you don’t have to feel guilty or beholden to the company for giving you a job.
