Having a baby

Budgeting for you and your child

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.

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 and Natalie's first child

jenny and natalieJenny and Natalie 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 of their baby and she will return to her current job 3 days a week.

Jenny has access to 12 weeks maternity leave and will be entitled to the 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 uses the parental leave calculator to work out how much income she will have when the baby arrives and after she returns to work.

They decide to sell their second car and budget to pay off their credit card debt before the baby arrives to reduce some of their outgoings.

Single and having a baby

If you are having a baby and you are single, it's important to research and plan for your life changes as soon as possible. There are important decisions to make about how you want to arrange your life after you have your baby that will impact on your finances. For example, do you want to care full time for the baby for a period, or work part time or full time?

Prepare during pregnancy

Being pregnant can be an emotional rollercoaster, especially your first time. There are many new things to learn about and you will probably want to know all about the baby growing inside you, as well as what you need to prepare before the baby arrives.

It's important to budget for any associated costs during pregnancy. These may include:

  • Doctor and hospital bills
  • Scans and special medical tests
  • Maternity clothes
  • Baby clothes and equipment
  • Extra savings (if you can) for after the baby is born

It's probably a good idea to talk to people who have children to find out what cost saving ideas they have before you go out and buy all the latest baby equipment.

Use the parental leave calculator to manage your income while you are caring for your baby.

Parental leave calculator

Our career break super calculator can help you work out how working part-time or taking a break from paid work to have a baby will affect your super.

Career break super calculator

Budget for your new family

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.

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 items they can lend you or hand-me-downs they can give you.

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.

Transcript: Scott Pape's family finances money challenge

Government help

You could be eligible for government benefits such as Parental Leave Pay, Family 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 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 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 assist with caring for her child when Louise returns to work but she also is looking into child care now so that she knows the options available to her. Louise borrows some of the equipment and clothes that she will need from her sister who has older children, to save money.

Louise is worried about how she will manage unexpected expenses when she is being a full time carer for her baby, so she starts to save for an emergency fund while she is pregnant.

Child care

Smart tip

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

Before you go back to work, update your budget with changes to your income and childcare 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. 

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 Department of Human Services can assess if you are entitled to Government assistance for in-home child care.

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.

Related links

Last updated: 15 Oct 2015