When you become a parent, everything else in life takes a back seat. Unfortunately this sometimes includes responsible personal finances, as the high cost of raising a child and the stresses inherent with parenting take their toll on your mind and your bank account. There are only so many hours in the day you can work, yet so many bills that have to be paid on top of the constant spending involved in ensuring the healthy and happy development of your child. You get money where you can, and spend your meantime juggling between a Discover Platinum, Barclay's Silver, Chase Sapphire, and any other precious metal or gem you got in your billfold.
Here's an overview of the three major options available to most new middle-class parents in a weak economy:
It's the obvious number one choice, but don't let the seemingly simple ebb and flow of cash fool you into thinking it's the end-all-be-all of solutions for dealing with expenses. If your child is the most important part of your life, then you must seriously consider savings for college, as well as taking out insurance policies. Thus it may not always be ideal to use the entirety of your income on immediate expenses, and other options should be considered to make ends meet in the near-term.
There is an incredibly fine line between responsible credit card use and finding yourself buried beneath a pile of high interest debt. New parents are especially susceptible to this, as they will easily throw a card down for diapers and cheesy mac without thinking twice. But for most families, credit cards are a necessary part of life. Focus on staying responsible, and do this by opting for cash back credit cards and other offers that motivate you to pay off the balance at the end of the month. Then, appreciate the rewards most people never get to see because they fail to live up to their end of the deal.
If there's family around, especially grandparents, then borrowing is very likely an option. There's no shortage of expert advice out there that warns against the pitfalls of lending money to family members, but the honest truth is that it's hard to say no when you can say yes. Add the well-being of children into the mix, and the choice becomes obvious. It's therefore critical that you take steps to assure borrowing from family, if it happens, won't cause conflict down the road. Make a record of every transaction. In the end it's the best for the whole family, and at least there are no interchange fees.
It's not as though there are an enormous number of ways to make ends meet when you're a cash strapped parent. Responsibility is key to navigating the otherwise unpredictable and even unnerving first few years of covering the debts that come with raising kids. Have the discipline to go about the various payment methods available to you, and you're certain to be doing what's best for you and your loved ones.