Inflation Forces 3 In 4 New Parents To Reevaluate Finances

Many expectant parents are making significant financial adjustments and reevaluating their financial strategies as inflation impacts the economy. One of their decisions, while providing short-term relief, has far-reaching consequences.

A recent BabyCenter survey found that nearly three out of four expecting parents make considerable financial sacrifices. The most common are postponing debt payments or shelving plans to clear them.

Delaying debt payments can seem like a necessary relief for new parents, but it comes with significant long-term costs. Financial advisor Jonathan Feniak emphasizes the gravity of this decision:

“Postponing debt payments can increase the total amount of interest paid and negatively impact credit scores. This can hinder future borrowing opportunities and reduce financial flexibility—making it challenging to manage unexpected expenses or economic downturns. It can hinder parents’ ability to pursue other financial goals, like saving for a child’s education or investing in a home.”

Consider this simplified scenario: An expecting couple decides to delay their $10,000 debt repayment. Originally, they were on a three-year repayment plan at 7% interest, with monthly payments of approximately $308.77, resulting in total interest payments of about $1,115.72. By postponing payments for a year, they shift to a four-year repayment plan, which includes a year of interest-only payments. This adjustment lowers their monthly payments in the short term but increases their total interest to approximately $1,864.48—an increase of $748.76.

Deferment impacts a family’s long-term financial health and resilience and influences broader economic trends. Families delaying major purchases and reducing discretionary spending can suppress overall consumer spending.

Still, financial adjustments are deeply personal, as shared by working father Anthony Dutcher. “Becoming a dad last year was a whirlwind of excitement and new challenges. We relied heavily on credit cards to cover hospital bills, which led us to debt consolidation loans. Not the most glamorous route, but worth every penny for our healthy and happy baby.”

Working mom Jacquelyn Farnsworth recalls how debt repayment drove her back to work after maternity leave. “I was asked so many times if I was sure that I wanted to go back to work. To me, the question felt like an affront. What choice did I have? We couldn’t pay our bills if I wasn’t working, and now I had medical debt from the birth and a new credit card balance to pay off as well.”

“For me, as well as my wife, the decision to postpone debt payments was driven by the immediate need to cover essential expenses like diapers, baby gear, and those adorable, but sometimes pricey, onesies,” explains working father Nguyen Huy. “Childcare cost was a big…