How to budget for bub
EXPECTING a baby is one of life’s most exciting moments. For many people, the nine months can fly by so quickly making it feel like you’ll never have enough time to fully prepare, especially financially.
As a mother of two I wasn’t surprised by our Cost of Living research which revealed Australian parents spend close to $300,000 raising a child from birth to the age of 17 – basically the cost of a small mortgage.
I also wasn’t surprised to find our food, education and household items are some of the biggest costs. But what about everything else? Clothing, childcare, nappies, health care, the list goes on.
As new or expecting parents, answering all these questions on your own can be overwhelming. Speaking to other parents and learning from their journey to parenthood is invaluable.
Their experiences in planning for the foreseen costs, and also some of the hidden costs can help you establish your own budget and approach – it’s amazing how fast babies grow, and subsequently go through clothes, or how much you spend on food when they move to solids.
We want the best for our children, and we are all guilty of an impulse buy. However, with more than 40 per cent of parents claiming they overspend on food, clothing, entertainment and social activities it is important to be mindful of spending and prioritise needs over wants.
It’s also important to think about what impact taking time away from work will have on your household budget.
Pleasingly our latest research found nearly one in five people between 18-34 years are thinking ahead and prioritising maternity/paternity as a key savings goal.
If it works for you, try setting up a separate account for when your baby has arrived – this will help with the “surprise” costs which may come your way. Speak to your bank, accountant or financial planner for additional guidance.
We have collected some of our favourite budgeting tips from the people who know best – parents:
■ “As your child grows and their behaviour and needs change, so will your spending, budgeting and savings patterns. It’s especially important to prepare if you plan to go back to work – childcare can be surprisingly costly depending on how many days you book,” said Melissa.
■ “When you’re starting to think seriously about having a baby, speak to your health insurer to ensure you have the correct cover in place. You need to make any required changes 12 months prior to giving birth to receive the private health benefits,” said Thy.
■ “Borrow and share clothing items as much as you can. They grow so quickly and most items will hardly get worn,” said Belinda.
■ “Friends and family will want to buy you gifts so don’t be afraid to tell them what you need. It may be a contribution for a large item or something which you can never have enough of like bibs. The last thing you want is 20 pairs of the same booties,” said Sarah.
❝ Speaking to other parents and learning from their journey to parenthood is invaluable.