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Having A Baby Here's What You Need To Think About Financially
Ask any parent and they'll tell you that while kids are a joy, they're also expensive – and – budgeting starts well before bub arrives into this world.
👶 According to Suncorp's Cost of Kids Report raising a child in Australia is now 10% more than it was in 2016.
🧒🏽 In 2018, the Australian Institute of Family Studies said it would cost $159K to raise two children to 18, and that was before inflation shot up to its current rate of 6.1%.
Every parent is different but a little bit of forward planning can really keep the costs down – before your brain is too frazzled after the fifth sleepless night in a row.
Pre-pregnancy financial planning
There are exactly a bazillion things you can never know, control or comprehend about having a baby.
Why do some sleep while others treat nights like their own personal party time? How do you dress their tiny bodies without breaking a precious bone? Why do poop explosions only happen when you’re in the middle of Coles?
🧮 But you can control your budget. Let's see what the government's MoneySmart recommends:
Know how much money will be coming in while you're taking parental leave. Some expenses will drop while others will rise.
Consider: potential medical care, furniture like cots, prams, clothing, nappies, food, bottles and supplies you'll need (and more).
Never think it's too early to start planning for daycare. Research childcare providers that suit your budget and location as waitlists can be as long as 18 months.
🎙️ A-hem: It will also help a lot if you and your partner have a forward-thinking employer that has good parental leave benefits and flexibility. At a minimum, check your contract.
Before your baby’s arrival…
1. Health insurance
If you want to be treated as a private patient during your pregnancy and birth, you’ll need to upgrade your health insurance to include pregnancy cover at least 12 months before you fall pregnant.
Even if you don’t choose pregnancy cover, you'll still have some out-of-pocket costs in the public system as Medicare does not cover it all.
There can be gap payments for specialists, ultrasounds and even at your GP. It's always worthwhile asking if they bulk bill and if they don't find out the difference and compare with other providers.
Going public? Consider taking out a policy with ambulance cover. Most states charge for rides and call outs – NSW is up to $6,797 – so even one call out could pay for itself. Most basic hospital policies include ambulance cover, although there's precious little else and for a few dollars more a week, you can find a more comprehensive bronze cover.
Be aware: Pregnancy cover usually sits in the higher tiers of health insurance so it's best to weigh up if it is worth the investment for your family and budget. Many health funds offer further benefits for pre-and-post pregnancy, such as post-natal mental health, lactation consultants and sleep settling advice.
2. Register for parenting payments
The Australian government provides a range of payments and tax options to support families during this period.
💰The Family Tax Benefit and Parenting Payment offers income support and help with the cost of raising children.
🫰 You may also qualify for Parental Leave Pay, Dad and Partner Pay and the Childcare Subsidy. Visit Services Australia to find out more.
3. Buy mindfully when the baby arrives
You could spend a literal fortune buying everything you might need to keep your bub happy and comfortable in its first year of life. There are fancy electronic rockers and butt fans, even bath-water thermometers.
Logic doesn’t often prevail when you’re a nervous parent-to-be, and that wiper warmer suddenly feels absolutely essential. Take a bit of time to think about whether the purchase is necessary or a nice-to-have.
Buying essentials like a pram, cot and car seat is pricey enough. In fact, a 2019 study conducted by IBISWorld found that the average cost of a baby in its first year is $7,918.
The main point is don’t get too carried away with all of the gadgets and doohahs. Your bub might not like them and will almost certainly outgrow them within a few short months.
👶 Focus on the things that you really need and if there is any extra left over then decide if you really want anything else.
🛒 Shop your family and friends' baby gear leftovers, because that is a great place to get hand-me-downs. For bigger items, try Gumtree or Facebook Marketplace for a second hand bargain.
4. Lean into your support network
Leaving the support of the hospital can be a daunting prospect, but state health networks actually offer fantastic advice and support during those first few months.
Depending on your situation, a midwife will visit you at home to provide postnatal care for you and your baby. You will also be offered a schedule of visits to your local early childhood health centre, where a nurse or midwife can weigh your baby and offer advice on developmental milestones.
It's all too easy in those first twelve months to do anything other than keep your baby alive and eat peanut butter toast but remember you matter too.
Try setting aside some time and money for yourself. Trade baby-sitting with a friend, or get a family member to come by. A date night could go a long way to keep you sane as you navigate first-time parenthood.
As they say many hands helps, particularly with a new bub. Let your friends help, whether it's dropping over real food, or holding baby while you shower, it'll save you paying for outside help and do your sanity and budget a world of good.
Learn from other mothers that have been in the same situation you have. Pregnancy focused websites like Kiindred share a wealth of tips around motherhood & smart saving tips in the early months of having a child.
🍼 The Australian Breastfeeding Helpline operates 24/7 and offers information and support from qualified lactation counsellors.
☎️ You can also find a range of providers near you via your state’s child health information link. For other parenting advice and support, you can call the national helpline or parenting helpline in your state.
🐼 If you're really struggling, speak to an organisation like PANDA, who specialise in support for new mums and dads.
✅ You may well be living in a constant state of pandemonium, but there are some things you can do to establish a bit of order and create a sense of support when you’ve got a new bub.
The bottom line
The unexpected will always occur when it comes to babies and children, and the sad reality is that you will likely be sleep deprived and time poor when it comes to dealing with things.
Focus on sorting out the big expenses before your baby’s arrival and try to maintain a sense of humour when it comes to the rest.
💩 As they say, poop happens.
