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 factor, too. Looking back, postponing debt payments was a significant sacrifice, but it also taught me valuable lessons in financial management and resilience.”

Whether debt payments are modified or postponed altogether, the choice weighs on family relationships. Financially overstretched families also tend to decrease communication and increase tension, says counselor Shenella Karunaratne. “When partners are both exhausted due to the new baby and also stressed out about money, they often start to talk to each other less. This is the exact opposite of what you should be doing.”

For expecting parents, the first step to adjusting to their new financial reality is reviewing their current budget. Kevin R. Chancellor, a financial advisor, suggests a detailed budget analysis: “Identify necessary adjustments and prioritize spending to maintain a healthy financial baseline.” Strategies such as the ‘snowball’ or ‘avalanche’ methods for debt repayment offer systematic approaches to managing and eventually overcoming debt.

Finance director Adam Horvat also suggests restructuring budgets to accommodate unexpected costs and setting up automated systems to manage savings and debt payments efficiently: “Adopting an envelope budgeting system can help curb overspending on non-essentials, making it easier to allocate funds where they are most needed.”

Certified financial planner Charlie Pastor recommends considering balance transfer credit cards for short-term relief: “These cards can offer an interest-free period, providing breathing room to settle into the new family dynamics without accumulating interest.”

Postponing debt payments can feel like a quick fix for expectant parents needing some financial breathing room, but it’s crucial to think about the bigger picture. While helpful in the short term, these financial shortcuts can impact the broader economy and their personal financial health down the line.

As families work through these tough times, getting expert financial advice and making a solid plan can really make a difference. The aim is to balance immediate financial relief with long-term stability so families can handle today’s financial challenges while building a strong foundation for the future.