Category: Loans

Should You Pay for a new baby with a Loan?

Everyone knows that a baby can be really expensive. Your first baby is likely to be more expensive as you will have to buy lots of new things, such as cot, bedding, moses basket, stair gate, playpen, toys, car seat, highchair, clothing, pram, pushchair and possibly bottles, sterilizer, washable nappies etc. A lot of these things would be able to be used for a second baby so the cost may not be as high. However, there will still be costs with a second baby such as food and drinks. Childcare is more expensive once you have a second child and you may need to buy a double pushchair if their ages are similar and perhaps a second cot and a car seat.

With all of these expenses it can be tempting to get a loan to cover some of the costs. Some people do manage to save up to be able to pay for the things that they need and others may not be able to. It may be possible to ask relatives, who want to buy you gifts, to help out with some things, but you may still find that you do not have enough to pay for everything that you need. It can be quite a shock when you do add up the prices of things.

Before you consider taking out a loan it is worth making sure that you really do need everything that you intend to buy. There are many things which shops try to sell us, which are not perhaps necessary. Things such as changing tables, prams (when a pushchair will do and last longer), disposable nappies (when washable are much cheaper) and many other things which are not necessary to buy. It can be lovely to have a decorated nursery with pretty matching furniture, but borrowing money to pay for it may not be a wise idea. You may also be able to buy some of the items second hand or even get them free. Take a look online and see what is available. It is always recommended that you buy new mattresses and car seats for babies and children, but other items should be fine bought second hand.

Getting a loan can be a big commitment. Even if it is borrowing on a credit card, it still counts as a loan and can be difficult to pay back. Before borrowing any money, it is always important to think about how you will be able to pay it back. With a baby, it is likely that there may be at least one member of the family not working or child care to pay for. So this could mean that there is either less income coming in or more expenses and it could be a lot more difficult to make ends meet. If there are debt repayments to be made as well, it could make things even more tricky. It is also wise to consider the future. You may plan on returning to work quickly and increasing the income again and you may even have a grandparent will to help out for free, but you may change your mind. You may just feel that you would rather be with your child while you can and not work, but if you have debts to pay, you may not have a choice.

You may be at a stage where you are paying a mortgage or want to buy a family home and having debts can make this very hard. If interest rates rise, you could suddenly find it much harder to manage but once you have debt you are committed to paying it back. Make sure that you do think about the future and the consequences of getting into debt before you make your final decision.

Therefore borrowing at this time of your life could be a big risk. You may find that you will struggle with repayments and may regret borrowing the money. It is therefore really wise to make sure that you do not buy more than necessary and therefore do not borrow too much and regret that decision. Think it through really hard and make sure that you are confident that it is the right choice for you.