Babies leave their parents stuck in debt

PARENTS are drowning in the expense of having a baby, with many going into debt.

One in five parents has had to return to work earlier than planned because of financial distress after having a baby.

And one in 10 families had relied on credit cards to cover basic living costs in the first year of their baby’s life, an alarming survey found.

Nearly 70 per cent of Australian families felt some level of financial strain in the first year of their baby’s life, while one in five said the expense was more than they had anticipated. That’s despite nearly half of all expectant parents making an effort to budget and financially prepare before the birth.

Comparison website Mozo commissioned the survey by an independent research firm. Mozo director Kirsty Lamont said it highlighted the rising cost of baby-related items.

“The cost of the first year of an infant’s life is hard to pin down but is estimated to cost parents anywhere between $3000 to $15,000 depending on what you buy,” Ms Lamont said. “Making a budget and being aware of your incomings and outgoings is crucial to stay financially afloat.”

The Parenthood executive director Alys Gagnon said extended paid parental leave was the key to reducing the strain.

“I would argue … there are not many employers that are willing to put their money where their mouth is and make sure parents have access to the money and time they need to spend with their newborn babies,” Ms Gagnon said. “It’s ter- rifying to me that people who work hard and earn good wages would have to live off credit cards simply because they have brought a baby into the world.”

Circle In co-founder Kate Pollard, whose business aims to put parents in control of their parental leave, said the rising costs were pressuring families back into work “not on their own terms”.

“Before having kids, couples do need to talk about money and need to plan for a baby,” Ms Pollard said.

Families and Children Minister Paul Fletcher said Australia “performs very well in many measures of wellbeing relative to other countries in the OECD Better Life Index”.

“Families may be eligible for a range of payments to assist with the costs of caring for their children,” he said.