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Updated February 18, 2020

Essential Money Moves for New Parents

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Becoming a parent is one of the most meaningful things you'll ever do. And the most expensive.

The average family can spend about $15,000 a year on child care.

Now is a good time to make sure your financial health is in check.

To help out, we've put together 7 suggestions for you:

1. Grow Your Money 19x Faster Than a Typical Bank

Open a high-yield savings account.

When you start saving early, your money has more time to grow. Compound interest rates can increase your nest egg far beyond your initial investment.

Unfortunately, most people have a regular savings account with 0.09% APY. That's a big mistake.

    CIT Bank

    CIT Bank Bonus Offer: $300 for New and Existing Customers

    CIT Bank now offers up to $300 cash bonus for new and existing CIT Savings Builder customers. This limited time promotion expires May 30, 2020. Conditions apply.

    Expires 5/30/2020
    CIT Bank

    CIT Savings Builder - Earn 1.75% APY

    Earn up to 1.75% APY. Here's how it works: Maintain a minimum balance of $25k OR make at least a $100 minimum deposit every month. Member FDIC

    Expires 5/30/2020
    Discover Bank

    Discover Online Savings - $200 Cash Bonus

    To get your $150 or $200 Bonus offer: What to do: Apply for your first Discover Online Savings Account by 4/6/20, 11:59 PM ET, online or by phone. Enter Offer Code CY320 when applying. Deposit into your account a total of at least $15,000 to earn a $150 Bonus or deposit a total of at least $25,000 to earn a $200 Bonus. Deposit must be posted by 4/20/20, 11:59 PM ET. Maximum bonus eligibility is $200.

    What to know: Offer not valid for existing or prior Discover savings customers or existing or prior customers with savings accounts that are co-branded or affinity accounts provided by Discover. Account must be open when bonus is credited. Bonus will be credited to the account by 5/4/20. Bonus is considered interest and will be reported on IRS Form 1099-INT. Offer may be modified/withdrawn without notice. See advertiser website for full details.

    Expires 4/6/2020

2. Earn passive income with real estate

Earn quarterly dividends from real estate investing.

Real estate investing is known for being consistently profitable. Over the last 30 years, real estate performed better on average than stocks. That's why it's a favorite among the wealthy.

But it's only for millionaires, right? Nope. You can get started with a minimum investment of just $500.

Fundrise lets you pool funds with other investors to purchase real estate. Then they use a strict underwriting process to find and screen projects.

Best of all? You don't need to deal with tenants, maintenance repairs, and other problems in traditional real estate. Your money gives Fundrise the capital to acquire, build, and manage projects for you.

If you're really eager to start investing, choose Fundrise's Starter Portfolio. They have low fees and it's only $500 to start. It's a great choice for beginners and the app is very easy to use.

3. Protect your family for as little as $5/month

Most women are under-insured. Many don't have coverage at all.

Bedtime stories, packing lunches, and changing diapers. You're essential to running the household.

How would your family manage if the worst should happen? Would they be okay without your income?

Getting the right life insurance can ensure your family's future. It's one of those you wish you'll never use. But you're glad to have it.

Bestow offers families up to $1 million in life insurance. Rates start at $5/month. After filling out a quick online application, you could get term life coverage in less than five minutes.

How? They use their own algorithm to underwrite policies, so you don't need a medical exam. You can even change or cancel your plan at any time.

You should think about life insurance sooner rather than later.

Buying life insurance when you're younger saves money, lots of it. It's best to do your research and get multiple quotes. To start, compare your rate on Bestow.

4. Earn Cash Back on Groceries and Gas

Perfect for cash back enthusiasts.

Once you have kids, food and transportation become your biggest expenses. The average family spends $150 - $300 per week on groceries and $3,000 per year on gas.

That's why we recommend the Blue Cash Everyday Card from American Express, a CreditDonkey partner. You can earn impressive cash back on family necessities. Plus, there's no annual fee (See Rates & Fees).

  • 3% Cash Back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%)
  • 2% Cash Back at U.S. gas stations
  • 2% at select U.S. department stores
  • 1% back on all other eligible purchases

Their rewards structure is simple to follow. You earn Reward Dollars and can redeem for statement credits, gift cards and more. Just be sure to pay off the balance in full each month so the interest rates do not offset your rewards and benefits.

Right now, you can earn a $150 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months. Terms apply.

5. Master Your Household Budget

This is every mom's secret weapon.

The worst (and easiest) way to waste money is to lose track of where it's going. New diaper bags, bottle warmers and other gadgets are fun but unnecessary. Instead, make sure your spare cash goes towards future goals like college and retirement.

Free online budgeting tools like Personal Capital can help you figure that out. The app links your accounts (bank accounts, credit cards, loans and investments) for a complete snapshot of your finances. This includes:

  • Net worth
  • Any types of debt
  • Spending habits
  • Retirement readiness
  • Portfolio performance

The Education Planner calculates your college savings goal based on a specific school or overall in-state vs out-of-state costs. It also factors in the cost of room and board, books, and even adjusts for inflation.

The Retirement Planner analyzes how different life scenarios (such as buying a house) will impact your retirement plan. You even get personalized investment advice.

6. Take advantage of 529 benefits

You can invest in any state's 529 plan.

When you're playing peek-a-boo with the most important person in your life, sending them off to college feels like light-years away.

How can you prepare for your baby's first step into adulthood?

A good place to start is a 529 plan. It's basically a college savings plan that offers tax and financial aid benefits. Almost every state has at least one 529 plan available and each one is different.

Start planning early. The average cost of in-state public tuition is $9,970 a year (not including room and board). To get ahead, set up automatic monthly transfers to your 529 college savings plan account.

7. Cancel Forgotten Subscriptions

Lower your monthly bills almost instantly.

It's safe to say many of us have signed up for a few free trials and special promos. Chances are, we're not keeping up with every expiration date.

Have you ever been surprised with a steep automatic renewal charge? I know I have (hello, unused gym membership).

Thanks to Truebill, you can save hundreds by identifying and canceling forgotten subscriptions. Subscription boxes, streaming services, loyalty programs—you name it.

It's perfect for busy moms and dads. No 30-minute phone calls, no awkward follow-ups.

Just connect your bank accounts or credit/debit cards and cancel through the app. Their team of expert negotiators will get rid of the unwanted subscription that's been plaguing you for months. Then they'll send you an email with how much money you saved.

Truebill uses bank-level security with 256-bit SSL encryption and read-only access to protect your information.

Stop wasting money on monthly charges. Download the app on iOS or Android now.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. This site may be compensated through the Advertiser's affiliate programs.

Editorial Note: This content is not provided by American Express. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through the Advertiser's affiliate programs.

For rates and fees of the Blue Cash Everyday card, please click here.

More from CreditDonkey:


Life Insurance for New Parents


Best Online Savings Account


Passive Income


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Blue Cash Everyday Card from American Express
Apply for Blue Cash Everyday Card from American Express
At American Express' Secure Site
  • Earn a $150 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
  • 3% Cash Back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%).
  • 2% Cash Back at U.S. gas stations and at select U.S. department stores, 1% back on other purchases.
  • Low intro APR: 0% for 15 months on purchases and balance transfers from the date of account opening, then a variable rate, currently 12.99% to 23.99%.
  • Don't wait for your Card in the mail. Start earning cash back before your card even arrives, if eligible for Instant Card Number.
  • Cash back is received in the form of Reward Dollars that can be redeemed for statement credits.
  • No annual fee.
  • Terms Apply.
  • See Rates & Fees
  • Go to issuer's official application, terms, and details
Introductory Bonus Cash BackCash Back RewardsGas RewardsGrocery RewardsCar Rental InsurancePurchase Protection$0 Fraud Liability
Intro APR for PurchasesIntro APR for Balance TransferRegular APRAnnual Fee
0% on Purchases for 15 months
0% on Balance Transfers for 15 months
12.99% - 23.99% Variable
$0

How to Invest $20k

What to do with 20k in savings? Learn how to invest $20,000, plus 3 investments you must avoid. Imagine what it could be worth in 20 years if you start now.

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Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

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CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.