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6 Ways To Prepare Your Finances Before Your Baby Arrives


Preparing for your baby financially means being able to spend more quality time once the baby arrives and spend less time worrying about your financials. In NATSEM's most recent report they state that the average middle income earning family will spend around $812,043 to raise two children from birth to finishing school.

1. Check your health insurance

Your insurance coverage will be the biggest determining factor to whether your pregnancy & childbirth journey will cost $0 to thousands of dollars. There is generally a 12 month waiting period when adding pregnancy/obstetrics cover so it is important you check this early and update it if need be. This is particularly important if you are wanting to choose your own obstetrician, have your baby in a private hospital or wish to use IVF or other similar services.

2. Know your entitlements

It is important to check in advance with your employer as to whether they offer paid parental leave as well as any other benefits that may be available to you. By law, employees who have the responsibility for the care of the child or have worked for their employer for at least 12 months are entitled to 12 months of unpaid parental leave when their child is born or adopted. You or your partner may be eligible for one or more government payments including parental leave pay, dad & partner pay and the family tax benefit. Under the parental pay scheme, the primary carer of the child may receive up to 18 weeks of pay at the national minimum wage rate. This payment takes place from the birth of the child. Make sure you explore your options and know what you are entitled to so that you can budget.

3. Pay off your debt & save for a rainy day

Getting out of high-interest debt (like unpaid credit cards) is particularly a good idea before starting a family. Once you keep adding to your family finding the extra money to pay off debt and save may not be as easy. It is also important to consider putting a % of your income into an emergency fund, having an amount that is equal to 3 to 6 months worth of expenses in your emergency fund is a good idea.

4. Determine child care costs

The cost of child care can eat up a sizeable portion of a families monthly budget. The cost of child care in 2018 ranges from approx $70 to $192 per day. You need to determine your own plan, can one person work from home? If not then do the numbers work out cheaper if one parent stays home? Is this an option? It all depends on your ideals, the cost of child care in your area, your cost of living and your income. There is the Child care Benefit and Child Care Rebate (which is not income tested) available. To estimate your potential benefit you can head over to the Government's Education Website.

5. Review & re-do your budget

Once you have an idea on all of the above you need to revise your budget and add in the new expenses, entitlements, insurance, savings and child care. Do your research and find out how much your baby expenses are really going to add up to and be realistic. You will then have an educated estimate and be able to figure out how you can scale back your budget, obvious areas are dinning out and entertainment.

6. Shop smart

Keep reminding yourself that babies grow very quickly and destroy things very quickly. It is easy to get caught spending a fortune on all of the cute baby products on market. You'll want to spoil your new baby and that's totally fine! But learn to shop wisely and spend where it makes the most sense. There are definitely are a few items worth the cost like a good pram & baby seat, but these items will generally get used the most and can be passed on.

Don't stress if your only able to begin planning once you find out your baby is on the way.. there is always time to improve you finances. Making smart spending choices now can help put you and your new family on the path to success.


**The material and contents provided in this article contains general information and does not take into account your personal objectives, financial situation or needs. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, please contact Peer Wealth on (02) 8014 7608.

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