No time of life is more exciting and full of promise than after becoming new parents. That bundle of joy may cry a lot and need attention every waking moment, but you wouldn’t trade parenthood for the world. Though, understandably, you may be glad the little one sleeps a good 16 to 18 hours a day (if you’re lucky).
Besides catching up on your sleep, all those hours the baby is napping provide a good time to think about your family’s financial future. If you are like most new parents, the baby means a few lifestyle changes. Outside of some alterations in your sleep schedule, you also have to make some alterations in your budget, including finding a way to start socking away some money for junior’s college.
If you have good credit, you’re a step ahead in the game. You can take advantage of low interest credit cards, finance the vehicle that works best for your family, refinance student loans to lower interest rates and payments, and save money on the mortgage for the family home.
Low-interest credit cards
When you have great credit, banks compete for your business. They know you’ll make payments reliably, and if they want to maximize profits, they’ve got to have some A- tier credit customers. Since the A-tier can get a credit card anywhere, they must offer enticements.
For new parents, 0-percent APR and balance transfer options provide a huge help, especially if they’ve been saddled with any extraneous medical or other new baby related expenses. Check out the rewards many cards offer as well. Cash back can come in handy when you need to buy a trunk full of diapers, and airline miles are a godsend when you need a vacation.
Get the car that’s right for you
That little two door sporty car you drove around in college just isn’t going to cut it anymore. You may not need a minivan or station wagon, but something safe and reliable that you can get the baby in and out of easily is a necessity. With good credit, you should be able to find something that holds its value well and won’t cost you with a cash-strapping repair bill down the road. You need that extra cash for the college fund.
Refinance student loans
With all the new obligations of parenthood, it’s easy to forget all about your student loans, but just letting them ride on auto pay can be a costly mistake. For example, many graduate students took out private student loans in order to complete their degrees. At the time they took the loans, they had much more limited credit histories and lower credit scores. Unlike federal student loans, with private student loans you can refinance at a more competitive rate when your credit score improves.
Take advantage of low mortgage rates
Mortgage lending continues to offer historically low interest rates. For new parents looking for that first family home, the time has never been better. Those already in a home can take advantage of mortgage refinance options. Many people who refinance their student loans are able to use the savings towards a new home.
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