Having a baby is an exciting time but it is also one of the most expensive phases in our lives. There are many things you can do to prepare for having a baby and the expenses that come along with it. A few simple steps can secure your finances so you will be stressing less about the price of nappies and can spend more time focusing on the fun stuff.
Have an honest conversation with your partner
You’ll need to figure out all of the logistics and agree on your preferences in regards to how you will raise your baby, who will be the primary caregiver and the amount of time you can afford to take off once the baby is born. The answers to these questions will impact the financial choices you’ll need to make. If you are single and having a baby you’ll need to check what sort of care you’ll have access to and whether you’ll work full-time or part-time. Will there be grandparents who may be able to provide free child care? If not, how much will you need to work to keep your finances under control?
Think about the costs during pregnancy
Most people think of the costs involved once the baby is born but there are a lot of costs to consider before this happens. Make sure you take GP and hospital bills, medical checks and scans and maternity clothes into account. Talk to fellow/recent parents and discuss money saving options so you don’t fall into the trap of splurging on all the latest baby equipment that you might not need. Better yet, think of recent parents who may have things you could borrow, or buy second hand and save. Check online and at specialist second-hand baby stores.
Monitor your budget and make relevant changes
Work with what you have right now and track your spending for a few weeks to confirm exactly how much income you get and what sort of expenses you have. It’s a great way to see exactly where your money is going as well as where you could reduce costs so you can spend that money on necessities such as baby food and nursery equipment instead. Then you’ll be able to calculate what changes need to be implemented if and when you and your partner take time off work. Have a conversation with your employer about paid leave entitlements and the policy on maternity leave. It’s also a good idea to confirm what annual leave, long service leave and unpaid leave you may have available.
Cut down credit card debt and think to the future
Take this opportunity to cut down on interest rates that you are currently paying by transferring your balance to a credit card with a lower interest rate. You’ll be able to save hundreds of dollars on interest if your balances are in the thousands. This money can be directed to new baby expenses or even saving for a new car.
Seriously consider buying life insurance if you don’t already have it. Write a will to ensure you’re able to choose a guardian before the baby is born. This is the best time to sit down with your partner to make important decisions. You can also add your baby to your policy. Most health insurance companies allow new parents 30 days after delivery to do so.
Check what financial assistance you may have access to
Depending on your set of circumstances and the salary you or you and your partner earn, you may be eligible for government help. Parental Leave Pay, Family Tax Benefit and Dad and Partner Pay are all examples of great entitlements you might have access to. Unfortunately child care is one of the largest expenses of having a baby and the cost of childcare will determine when you decide to return to work. There is some support with the Child Care Benefit or Rebate to assist with payments for child care. You can contact the Department of Human Services to see if you’re eligible.
Research child care options and share the load
If at all possible, it is great to balance child care with partners, relatives and friends to save some extra cash. If you’re lucky enough to have this support then make sure you make use of it. You could even babysit and take turns caring for the kids with another couple or family so you each have some time to yourselves as well some time to get those errands done.
Child care centres and family day care are popular options so compare a few local places to check availability and compare prices. Some companies have workplace childcare so do some research and check if your workplace has any onsite child care or any other options available (such as the option of working from home one day a week). You could also opt to use a nanny.
By planning ahead and at least getting your finances in order you’ll have a strong foundation to build on with your new family.