Parents love their children and would love to do anything they can to help them. But many parents make a few financial mistakes in the name of love that actually hurt them and their children. Two of the most common financial mistakes that parents make are:
-Putting the children first
-Not having a safety net
If parents make these two mistakes then they usually end up doing more harm than good, even if they had good intentions in the beginning.
Putting the children first
It may seem a bit strange to say that you should NOT put your children first when planning out your finances but this is exactly what you should do when making big decisions. Many parents get so caught up in saving to pay for a college education that they neglect their own retirement savings.
Remember, your children can always work and take out student loans (even though that is not the best option) to pay for college if they do not have a hefty fund saved up. There is nothing much you can do if you don’t have enough money saved up for your own retirement!
Not having a safety net
Another thing that many parents forget to work on while saving for their children’s futures is the level of insurance coverage. If children are dependent on you because they are under the age of 18 then if something happens to a parent the loss of income will be devastating.
It is important to have enough insurance to provide a level of income that will last long enough to cover the possible lost income. Be sure to cover the insurance you need before putting all of your money into a college fund because that insurance can help to cover those expenses in case of an emergency.