Having a baby
Budgeting for you and your child
Having 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.
Budget for your new
Your household income will drop if you take time off work to
have and look after your baby. You will also need to budget for new
expenses for your baby.
To start a budget, take a snapshot of 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. You will need to add the
expenses you'll have once the baby arrives (nappies, baby food,
nursery equipment etc) as well as the reduced income you will
receive if you or your partner take time off work.
Case study: Penny budgets for her new baby
Penny is expecting her first child in a few months. She starts
working on her budget to see how she will cope financially when the
baby comes and when she returns to work.
MoneySmart's budget planner allows Penny to save
different versions of her budget so she can compare income and
expenses before the baby arrives, after she has the baby and when
she returns to work.
Penny's baby budget
My annual leave + paid maternity leave?
Government paid parental leave (18 weeks)?
My income (3 days)
Child care benefit?
Child care rebate?
(ask mum 1 day a week?)
Ask your employer about your paid leave entitlements like
maternity leave, recreation or annual leave, long service leave or
unpaid leave. You may also be eligible for the government's Parental Leave Pay.
This scheme gives you additional paid parental leave on top of any
leave you take from your employer.
You could be eligible for a Baby Bonus, also known as a Maternity
Payment, from Centrelink. You cannot get both Parental Leave
Pay and the Baby Bonus for the same child. Most eligible families
will be better off receiving Parental Leave Pay. Use the Paid parental
leave comparison estimator to work out which one is better for
Depending on your income and assets, you may also be entitled to
other benefits such as the Family Tax Benefit, Child Care Benefit,
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
After you give birth, the hospital will give you a package that
contains the government assistance claim forms you will need to
When you do your budget you should focus on essential
items like nursery furniture (cots and high chairs), prams, baby
food, disposable nappies, clothes, and child care if necessary.
Friends and family with children will be able to tell you what
things are essential or what are just 'nice-to-have'. Baby books
often have lists of things you will need. You can then prioritise
the items and focus on the things you can afford.
To keep costs under control, think about buying second-hand
goods. Check online, at specialist second-hand baby stores, garage
sales and charity shops. Find out the retail price of new items so
that you get a good deal. Family and friends might also have
hand-me-downs they can give you.
Child care will be one of your biggest expenses if you
or your partner return to work.
You should update your budget with the increases to your income
and childcare expenses before you go back to work. Then you can
properly assess if returning to work will cover your childcare
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.
Here are your child care options:
- Partners, relatives or friends: A great option
if you are lucky enough to have this support.
- Childcare 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 Family Assistance Office can assess if you are entitled
to Government assistance for in-home child care.
Saving early helps
Start saving as early as you can - even small amounts will help.
Living on credit cards or from one payday to the next is stressful,
especially if you have children.
You could start by saving all or part of the Baby Bonus. Putting
money aside will help cover large bills and unexpected costs. Use
our saving goals calculator to prepare for the future.
Savings goals calculator
Superannuation and insurance
When you stop working, your employer's super contributions also
stop. If you have a partner, they can help make sure your super
does not fall behind by making super contributions for
you. This can have tax benefits. You could also be eligible
for a government co-contribution.
Find out about super co-contributions
from the Australian Tax Office.
Also check on your life insurance cover. If you hold life or
disability insurance cover through your super fund, check if it
continues when your employer stops making super contributions.
Make sure you have insurance that will give your family security
if you can no longer financially support them. You might also want
to update your super and life insurance beneficiaries.
Your partner could also consider income
protection insurance. Once you have a new addition to
your family having a regular income will become even more
Your child's legal protection
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.
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.
Last updated: 26 Feb 2014
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