Before the Baby Arrives
Take some time to consider where you are now financially. What is your current income and expenses? How will your income and expenses change when the baby arrives? If you are planning to use private hospital cover, do you have enough room in your budget for this. Check if your existing private health insurance cover any of these expenses. You should also check if your private health cover has any waiting periods before you can claim for pregnancy and birth related costs.
Don’t buy everything in the baby shop – no one goes into a baby store with the intention of spending big. However, it is easy to let our emotions get in the way and buying the best of everything and items that you may not even use. Before you go shop consider:
- Making a list of what you actually need before you go into a baby store.
- Talking to friends who have children and find out if that ‘must have’ were actually necessary. If you are on a budget, you can also look at second hand items. This can be obtained at a fraction of the new price but do be careful that any second-hand purchases meet all safety regulations.
- Sharing toys with friends who have babies. This will give your child new exciting toys to play with, without spending extra money.
Income Protection and Health Insurance
Along with your health insurance it is important to look at what type of life insurance you and your family need. Life Insurance includes, income protection, disability insurance and/or death cover. Having this cover in place can means you can protect yourself and your family’s lifestyle in case of injury/illness. It is also possible to package this cover within Superannuation which means that it does not have to eat into your family budget.
You need to find out what your entitlements are. Many employers have paid parental schemes and you should talk to your employer in advance to find out what they offer. There are government benefits including, paid parental leave, baby bonuses and family tax benefits that you may be entitled to.
Child-Care and Education
Educating your child can be your biggest expenses. Data by Stockspot1 shows that parents on average spend $26,000 on childcare between the ages of three and five. It is important that you include this expense in your budgeting. To save this expenses check what support you may have from family and if your employer offers flexible working arrangements which may allow you to reduce these costs.
If you are planning on sending your children to private school, in secondary school this may cost $20,0002 per year. Planning for this expense now can make it easier to manage this expense later, reducing financial stress on your family.
Overall, being on the front foot and taking steps early will put you in a better position. If you would like assistance with the many decisions around family planning, you can contact David van den Berg (partner or Adrians Private Wealth). He can guide you through everything you need to know, by making it part of your overall plan for less money stress, and better financial well being.