FOR IMMEDIATE RELEASE: February 13, 2006
New and Expectant Parents Financially Unprepared,
REDBOOK / Visa USA Survey Finds
- Visa USA Launches Online ‘Budgeting for Baby Calculator’ to Help Parents Manage Expectations, Prepare for Big Day -
NEw York, NY – February 13, 2006 – New and expectant parents are not as financially prepared as they think they are, according to a new REDBOOK magazine / Visa USA survey. Results of the study show that while 76 percent of expectant parents said they feel financially prepared, 41 percent of new parents, in hindsight, admit they were not. The survey of 1,000 parents, conducted in September 2005, appears in the February 2006 issue of REDBOOK.
The survey also found that while both expectant and new parents agreed family finances are a big challenge when it comes to having a baby, they had different expectations about what “financially prepared” actually means. This may explain why just less than half of expectant (46 percent) and new (47 percent) parents surveyed created a family budget for their new baby.
“The U.S. Department of Agriculture estimates that the average middle-income family will spend over $184,000 raising a child until the age 17. This is a huge financial challenge that parents today are not preparing for,” said Stacy Morrison, editor-in-chief, REDBOOK. “Our readers are managing work, marriage and now family. With so much going on in their lives, we felt it was important to give them a financial heads up on what to expect, when they’re expecting.”
“When it comes to finances, expectations don’t always meet reality, and this survey clearly illustrates how important it is for families to be realistic about the financial stresses involved in having a baby,” said Jason Alderman, director, Visa USA. “One effective way to help ease these concerns is to prepare a family budget.”
Additional key findings of the survey include:
- Added Stress: 87% of expectant parents anticipate that baby expenses will increase their stress level.
- Hospital Bills: The biggest gap in expectations vs. reality? The cost of delivery. One in four new parents ended up spending more than $2,000 on out-of-pocket costs for services associated with a normal delivery. On average, expecting parents are only budgeting for $776 to cover extra delivery expenses.
- Big Spenders: Nearly half of new parents say they spent more money than necessary on a car seat; 36% overspent on strollers; 25% overspent on photos, a crib and clothing.
- The Small Stuff: 48% of expectant parents surveyed said “every-day expenses” were their biggest financial worry, compared to just 33% of new parents.
- Relationship Tension: While 36% of expectant parents feel their new role as parents will be a source of tension in their relationship, nearly half of all new parents found that to be the case.
As reported in REDBOOK, Visa has added an interactive “Budgeting for Baby” calculator to its free, award-winning online financial education program, Practical Money Skills for Life. The calculator allows expectant parents to calculate what they expect to pay for typical expenses for both one-time and monthly purchases for a new baby. Once estimated costs are entered and tabulated, the calculator creates a separate budget, based on actual average retail prices for these same expenses. Comparing expected costs versus actual retail estimates will help parents set a realistic budget as they prepare for the big day and everything that comes after.
“The online budgeting for baby tool found on www.practicalmoneyskills.com can help parents feel more financially secure as they start one of the most important stages of their lives—raising a child,” Alderman added. “With some careful planning, new parents will be able to reduce financial stress, avoid unnecessary costs and save for their child’s future.”
Visa surveyed 1,000 parents (500 expecting and 500 new), nationwide, between September 6-16, 2005. A summary of the REDBOOK / Visa Baby Budgeting survey results and the Budgeting for Baby Calculator are available, for free, at www.practicalmoneyskills.com.
REDBOOK is a women’s lifestyle magazine that brings health, relationship, work, home, and emotional advice, as well as news about women’s choices, opportunities, and achievements, to 2.35 million readers every month. REDBOOK is published by Hearst Magazines, a unit of The Hearst Corporation (www.hearst.com), one of the world's largest publishers of monthly magazines, with a total of 19 U.S. titles and 145 international editions. Hearst reaches more adults than any other publisher of monthly magazines (76.3 million according to MRI, spring 2005). The company also publishes 19 magazines in the United Kingdom through its wholly owned subsidiary, The National Magazine Company Limited.
About “Practical Money Skills for Life”
The “Practical Money Skills for Life” curriculum is teacher tested and teacher approved. At the 2001 National Education Association Expo, teachers graded and evaluated the program. Nearly 100 percent of teachers who reviewed the website approved of it; 98 percent said they would recommend the site to other educators; and 94 percent gave the program a "B" or better. The curriculum currently reaches 2.5 million teachers, 37 million students, and 100,000 schools. Additionally, this program won the National Association of Consumer Agency Administrators 2002 Achievement in Consumer Education Award (ACE) for the best innovative program for the private sector and was named an “Honorable Mention” by the Jump$tart Coalition for Personal Financial Literacy’s 2002 Soaring$tar Award.
About Visa USA
Visa USA is the nation's leading payment brand and largest payment system, enabling banks to provide their consumers and business customers with a wide variety of payment alternatives tailored to meet their evolving needs. Visa USA is committed to increasing the choice, convenience, acceptance, and security of Visa payments for all stakeholders in the payment system - Members, cardholders and merchants. Through its 13,500 Member financial institutions, more than 488 million Visa-branded cards have been issued to cardholders in the United States. Last year, U.S.-based financial institutions relied on Visa's processing system, VisaNet, to facilitate $1.3 trillion in transactions with unparalleled reliability.
Worldwide, cardholders in over 150 countries carry more than
1 billion Visa-branded cards, accounting for more than $3 trillion
in annual transaction volume.
Visa offers a trusted, reliable and convenient way to access and mobilize financial resources - anytime, anywhere, anyway.
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