- The Savvy Promise
Most expecting parents try to prepare themselves financially for their new bundle of joy. However, they soon realise that the first year of their infant’s life costs more than what they expected causing some parents to take out their plastic to cover necessities. However, having the wrong credit card can cost these family paying through the nose and possibly push them into the red. Here is how to know if the credit card you own is the right one to cover this important time in your life.
1. Get a credit card that works with your budget
It’s all about mastering the power of your swipe, especially when it comes to your budget. Having a baby is expensive and can cost you anything between $3,000 – $15,000 depending on what you buy. Create a budget that takes your babies necessities into account. If you find yourself adding necessities such as diapers and formula on your credit card it is time you re-assess your budget.
2. Consider getting a low rate credit card
Another way to manage your expenses is to re-evaluate the type of credit card that you have. This will play a crucial role in you managing your finances or adding a financial strain to it. A low rate credit card can help you lower the interest you pay on balances and help you save in the process. However, it is important that you check the fees and charges that come to see if it will suit your situation.
3. Reward cards can come in handy
The amount you spend per month is going to increase now that you have a baby on board. However, this also means you can start looking for cards that match the type of spender you are. If you pay your credit card in full and on time you could consider getting a rewards card that offers you a bit more. Always keep in mind that rewards cards require you to spend a certain amount to access points. Therefore, checking to see if you already spend that amount is essential.
4. Set up a savings account
Having to juggle the many expenses that come with having a baby can put a financial strain on parents. Adding a savings account might seem like a far stretch for your finances, but it will create a buffer for emergency expenses that pop up such as medical expenses or home renovations that need to be done for the baby. If you already have a savings account in place you could consider having your savings automated.
5. Already racked up some debt?
Balance transfer cards have a 0% interest period that you can utilise to manage your debt so that you can get your finances on the right track. Keep in mind that the introductory rate expires and could revert to a higher interest rate. Avoid adding new costs onto a balance transfer card as this can be charged at a higher interest rate which can cause a huge setback.
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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
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