Having a baby
Baby on a budget
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.
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
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
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
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
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.
Manage your income while you are caring for your baby.
Parental leave calculator
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.
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
Ask your employer about your paid leave entitlements like
maternity leave, recreation or annual leave, long service leave or
Try to keep your bank balance healthy by sticking to your
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
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
- Do you need to change how you manage your day-to-day spending
- Do you need to reevaluate your goals and priorities including
financial ones? Should you delay major purchases or try and reduce
Case study: Jenny budgets for her baby
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
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
Jenny used the parental leave calculator to
work out how much income she will have when the baby arrives and
after she returns to work.
The couple will sell their second car and pay off their credit
card debt before the baby arrives, to reduce some of their
Government help when having a
You could be eligible for government benefits such as Parental Leave
Pay, Family Tax
Benefit or Dad and Partner
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
Case study: Louise checks her entitlements
Louise 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.
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
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.
Last updated: 02 Jul 2018