If you’re having a baby, you can probably recite your birth plan, have your bag packed for the big day – you may even know the route to the hospital by heart. It’s natural to feel the parental instincts take over and do some baby planning ahead of time.
So that you can make the most of the amazing experience of starting a family, it’s clever to put as much effort into planning for a baby financially, so you can start life as parents stress-free.
Our recent study into the financial habits of Australians when it comes to Dating and Relationships found that 82% of couples identify money as a source of tension in their relationship. We also found that parents are twice as likely to say that money frequently causes tension in their relationship.
Here are the main things to be thinking about as your house begins being overcome with booties, bottles and baby pink or powder blue.
The biggest financial thing to think about when having a baby is time off work. Everyone’s situation is different, so the first thing to do is figure out what your workplace is willing to offer in the way of parental leave, and decide how long you want to be off work for in the first year of your baby’s life. If you want to take longer off work, you may need to think about applying for Government assistance, or calculating how your budget may be affected if your income will be reduced or even paused for a certain amount of time. Knowing the impact the length of time you will have off work on your budget is vital, so figure this out early days so you can begin planning or saving if necessary.
As many workplaces will offer differing levels of support for new parents, it’s important to know your entitlements from the Federal Government as new parents. Check your eligibility sooner rather than later, as you may find you’re able to extend your time at home. Head to the Human Services website to see whether you’re eligible for:
- Parental leave pay (up to 18 weeks)
- Family tax benefits
- Dad or partner pay (up to 2 weeks)
- Child care benefits
- Parenting payments, and
- Rent assistance
While returning to work might be the last thing on your mind, it’s something worth considering sooner rather than later. This is because for many parents, returning to work may not actually prove financially beneficial – as crazy as this may sound. Child care in Australia is a massive expense for young parents, so explore your options early to decide when or if you’ll return to work. Some things to consider are
- Will you be able to save on child care by relying on the generosity of family or friends nearby?
- When trying to decide on a local paid child care centre, be sure to contact your local council for a provider list, so you can compare costs.
- Does your workplace offer child care options, either free or subsidised?
- Don’t forget to see if having a private baby-sitter or using home child-care is a more affordable option
Balancing your Budget
Once you have your baby, as an adult and a parent, all your resources will need to come under closer scrutiny. This is true for your energy, your time, and perhaps most importantly – your money. Here are some things to think about to ensure you can stick to your budget after baby comes home.
- Start saving: You’ve got nine months of salary between the happy moment of realisation and bub’s birthday. Scrimp and save every cent you can.
- Reduce expenses: knowing the difference between needs and wants will play a vital role from now on. Cut down on impulse spending, pay closer attention to your regular outgoings, and for big purchases and ongoing commitments like utility providers, compare online to make sure you’re getting the best deal.
- Accommodation: The time might be right to examine your home loan rate and repayment amount. Would it ease the burden once you move to a reduced income to convert to interest–only payments, or could you be getting a better deal? Switching home loan providers has never been easier…
- Have a baby shower: Chances are you’ve been to more than you can count – now it’s your turn. You have things you need, so where’s the harm in relying on the kindness of friends and family to help you feather your nest?