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6 Credit Mistakes Moms Make

Gerri Detweiler

When my daughter was little, she didn’t always like my decisions, but she thought I was perfect. Now that she’s older, she knows Mom can mess up. Part of that is due to the fact that she’s growing up, and part of it is because I’ve shared many of my missteps with the hope she will avoid at least a few of them.

Here are six common credit mistakes moms make.

1. Losing track.

Most mothers multitask to the max. You’re often the family CEO, and keeping track of the entire family’s schedules for the next month may be second nature. But with so much going on, it’s easy to lose track of where your money is going. Not keeping a careful eye on purchases can be costly. You may wind up with a credit card balance you can’t pay in full, or you may pay for things you don’t really want anymore but haven’t gotten around to canceling.

To save time and money, use online money management software to track purchases so you can live within your means, and consider apps like Bill Guard to spot grey charges.

2. Putting others first.

While wanting the best for your kids is natural, some moms take care of their children at the expense of their own financial futures.

“Moms sometimes borrow more than they should to finance their children’s college educations,” says Heather Jarvis, a mother of three and student loan expert who blogs at AskHeatherJarvis.com. “Parents need to be realistic about how much they can afford to contribute.” She goes onto add that moms sometimes “neglect their own retirement savings in an effort to save for their children’s college educations.”

If you’re a parent who takes care of your own financial needs first, it doesn’t necessarily mean you are selfish in a bad way. If you’ve got the basics in place, you are in a better position to help others in the future. And you won’t have to live with the fear that haunts so many: being a burden to your children someday.

3. Being generous with credit.

Whether it’s cosigning her kid’s first car loan or letting her sister who recently went through a divorce use her credit card, the mom who takes on someone else’s credit obligations risks hurting her own credit scores. Cosigning makes her legally responsible for the entire debt. If the person she signed for is late with payments, guess what? Those late payments affect her credit scores just as much as if she had paid a bill late.

4. Hitching a ride on their partner’s credit.

Some women “assume their credit is 100 percent tied to their spouse — if their husbands have good credit and a high income, that automatically transfers to them,” warns Emma Johnson, a personal finance writer and founder of WealthySingleMommy.com. “When they face divorce, women often find out they are mistaken.”

Women of all ages (including those in the happiest of unions) need to check their credit reports and make sure they have at least one credit account of their own, just in case. Johnson can attest to this. She never imagined she would be a divorced single parent of two — until she was. You can use the free Credit Report Card to keep track of where your credit stands on a monthly basis.

5. Missing a teachable moment.

Kids learn a lot of lessons from their parents. Unfortunately, learning how to manage money well isn’t always one of them. It may not always be appropriate to include your kids in every money conversation, but it is important to keep them in the loop.

“I believe that one of the best ways to teach your kids about money and credit is to live an appropriately transparent financial life,” says Carrie Rocha, a mother of two young children and author of Pocket Your Dollars: 5 Attitude Changes That Will Help You Pay Down Debt, Avoid Financial Stress, and Keep More of What You Make. “That means helping them understand when and why you use credit and when and how you pay off your debts.”

Rocha is particularly concerned about mothers who hide purchases from spouses or kids. “Hiding purchases from your husband is a bad idea for all the obvious reasons,” she says, “like it feeds a cycle where trust is increasingly denigrated.”

6. Using the wrong cards.

Take a critical look at what’s in your wallet from time to time. After all, your shopping habits have changed since you became a parent. You may find yourself cruising the aisles at Target, and less frequently in a fitting room at Nordstrom for example. If the credit cards you are using haven’t changed, you may be paying too much in interest or missing out on valuable credit card rewards.

Review your credit cards once a year. If you carry a balance, see if you can get a lower interest rate. If you pay your accounts off in full, make sure you have the right rewards card.

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