Having a baby

Baby on a budget

pregnancy testHaving a baby is one of the most exciting times in your life. While nothing can quite prepare you for the changes about to happen, one area that you can get a handle on is your finances.

Costs of having a baby

The costs of having a baby can quickly add up, so it's important to start budgeting as soon as you start planning a family or know you're pregnant. Upfront costs can include:

  • Maternity clothes
  • Baby clothes and nappies
  • Bottles and formula
  • Cot (including a mattress, sheets and blankets)
  • Other equipment such as a change table, pram and car seat 

To keep costs under control, think about buying second-hand goods. Check garage sales and charity shops or join groups on social media where parents are selling or giving away items. Find out the retail price of new items so that you get a good deal and make sure the items are safe before you buy them.

Family and friends might also have items they can lend you or hand-me-downs they can give you.

Costs of having a baby in a public hospital

Get an estimate of all the costs from your health care professionals so you have a clear idea of the expenses. Also talk to people who have children to find out what it cost them and how they managed the costs. 

The medical costs of having a baby usually include:

  • Doctor and hospital bills
  • Ultrasounds and special medical tests
  • Birthing classes

If you have your baby in a public hospital or birthing centre as a public patient, all the basic costs are covered by Medicare. Medicare will also cover medical expenses such as routine ultrasounds, however some expenses, for example '3D' scans, are not covered. 

If you use a private hospital with your own obstetrician, Medicare will only cover some of the costs. If you have private health insurance, call your fund to see what medical expenses they will cover and the evidence you'll need to provide when you lodge a claim.

Taking time off work

There are also ongoing costs that you'll have to factor into your budget. These include time off work and the impact that will have on your super balance. 

Working part-time or taking time off paid work to have a baby can also affect your super.

Work out ways to improve your super balance for your retirement while taking time off paid work.

Retirement planner

Budgeting for a baby

Start your budget with your current income and expenses. If you don't know where your money goes, try tracking your spending for 2 weeks, then put the details in our budget planner. Add the extra expenses you'll have once the baby arrives (nappies, baby food, nursery equipment etc) and make adjustments for any changes to your income if you or your partner take time off work.

Ask your employer about your paid leave entitlements like maternity leave, recreation or annual leave, long service leave or unpaid leave.

Try to keep your bank balance healthy by sticking to your budget.

Budget planner

Video: Scott Pape's family finances money challenge

Video about managing family finances

Take up this money challenge to help plan your family finances no matter how much money is coming in.

Have a money conversation with your partner

Talking about the changes that will happen to your family after you have a baby is really important and these conversations should include money.

Some of the things to discuss may include:

  • How do you want your family to function after your baby is born? For example, who is going to be the primary care giver? Is the primary care giver going to work? Answers to these questions will be informed by your own values and your current financial commitments.
  • Do you need to change how you manage your day-to-day spending and saving?
  • Do you need to reevaluate your goals and priorities including financial ones? Should you delay major purchases or try and reduce your debt?

Case study: Jenny budgets for her baby

Two WomenJenny and her partner are expecting their first child. They have had several conversations about how they are going to organise their lives after the baby and have agreed that Jenny will take 9 months off work after the birth and then she will return to her job 3 days a week.

Jenny has access to 12 weeks maternity leave and will be entitled to paid parental leave from the Department of Human Services of 18 weeks on minimum wage. Jenny also intends to take some annual leave. They will have a drop in their income and expenses such as child care to factor in after she returns to work.

Jenny used the budget planner to plan how they will manage their money when the baby arrives.

The couple will sell their second car and pay off their credit card debt before the baby arrives, to reduce some of their outgoings.

Government help when having a baby

You could be eligible for government benefits such as Parental Leave PayFamily Tax Benefit or Dad and Partner Pay

Depending on your income and assets, you may also be entitled to other benefits such as Child Care Subsidy, Parenting Payment, Rent Assistance or a Health Care Card. Try to incorporate these benefits into your budget. You can phone the Department of Human Services on 13 61 50 for an estimate of payments for your family.

Case study: Louise checks her entitlements

louiseLouise is expecting her first child. She contacts the Department of Human Services to find out her entitlements as a single parent so she can determine how she can manage her finances after the baby is born.

Louise would like to be a full time carer for 6 months after her baby is born and return to her part time job after this period. Louise's mother has offered to care for her child one day per week when Louise returns to work but Louise is also looking into child care. Louise borrows some of the equipment and clothes that she will need from her sister who has older children.

Child care costs

Before you go back to work, update your budget with changes to your income and child care expenses. This will help you decide if returning to work will benefit you financially.

Contact the Department of Human Services to see if you're eligible for the Child Care Benefit or Rebate to help you pay for child care.

Smart tip

Child care will be one of your biggest expenses if you or your partner return to work.

Here are your child care options:

  • Partners, relatives or friends: A great option if you are lucky enough to have this support.
  • Child care centre or family day care: Costs, conditions and waiting periods vary. Contact several to compare them and see where places are available. Your local council may also have information.
  • Workplace childcare: Some companies offer onsite child care.
  • Nannies: For some people, a nanny is a viable option. The Department of Human Services can assess if you are entitled to Government assistance for in-home child care.

Leaving custody of your child in your will

Do you have a will? Think about asking someone to be the guardian of your child if you and your partner should die and name this person in your will. Find out more in our article on wills.

The way you spend money will change when you have children. Getting your finances under control will give you peace of mind and allow you to relax and enjoy being a parent.

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Last updated: 21 Nov 2018