Preparing Your Finances for a Baby

Deciding to start a family can be one of the most exciting, and most daunting, times of your life. Whether you are thinking about planning to conceive, or are already expecting, the impact on your finances is something many people worry about. Babies aren’t cheap; between buying all the things the new little person in your life needs, and a potentially significant drop in income (depending on how long you intend being out of the workplace).

You may picture your parental leave as a happy blur of baby groups, activities, and lunching with other mummies, but in reality that all costs.

With some planning and savvy choices it doesn’t need to be that stressful:

  • Start saving immediately.
    If possible try to live on what your household income will be and bank the difference.
  • Balance your budget.
    Keep a strict record of income and expenditures, then rework your budget to allow for maternity and baby related expenses.
  • Check your employers Maternity / Parental policies.
  • Claim what you are entitled to.
    Check your entitlement to Parental Leave, Baby Bonus (if baby is born before 01 March 2014, after this date it will be the Newborn Upfront Payment and Newborn Supplement), Dad and Partner Pay, Family Tax Benefit, and Parenting Payment.
  • Your baby really doesn’t need everything recommended in the glossy parenting magazines, blogs, and websites.
    Decide what you class as essentials, nice-to-have’s, and anything else. If you don’t get something beforehand, or aren’t sure you will use it, you can buy it when the need arises.
  • Babies also don’t need everything immediately.
    If they aren’t going to use until they are at least six months old you do not need to buy it months before they arrive. You may find a good deal in the meantime.
  • Some parenting choices, such as breastfeeding and cloth nappies (especially if you are planning more than one child), can save a lot of money.

Most importantly, enjoy this special time; both now as a child-free adult who can be spontaneous, and when baby arrives. Babies need loving attentive parents more than they need the latest designer travel system, and the chances are they will spend far longer playing with a piece of shiny wrapping paper than the carefully designed ergonomic stimulating playmat you bought.