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.

Budget for your new family

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.

Budget planner

Case study: Penny budgets for her new baby

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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


  Income Expenses

Before bub

Mark's income

My income
(4 days)

Hospital costs

Nursery set-up

Maternity clothes

With bub

Mark's income

My annual leave + paid maternity leave?

Government paid parental leave (18 weeks)?

Nappies/ wipes

Baby clothes

After bub

Mark's income

My income (3 days)

Child care benefit?

Child care rebate?

Child care
(ask mum 1 day a week?) 

Government help

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 you.

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 family.

After you give birth, the hospital will give you a package that contains the government assistance claim forms you will need to fill out.

Baby expenses

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

Smart tip

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 costs.

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

Protecting your family

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 important.

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.


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Last updated: 26 Feb 2014

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