CHANGE FOR THE BET­TER

Ex­pert ad­vice on bud­get­ing for baby

Little Treasures - - CONTENTS -

Love him or hate him, con­tro­ver­sial US pres­i­den­tial can­di­date Don­ald Trump was bang on the money when he once de­clared, “If you have the money, hav­ing chil­dren is great.” In­deed, while there’s cer­tainly no doubt that in­vest­ing in the baby busi­ness de­liv­ers the most in­cred­i­ble, cash-can’t-buy re­turns, the start-up ex­penses can be high, not to men­tion the on­go­ing out­go­ings as your pre­cious lit­tle one grows. But the good news is that you don’t have to break the bank in or­der to have a baby – here’s a guide to sort­ing your fi­nances in prepa­ra­tion for par­ent­hood and po­si­tion­ing your child for a pros­per­ous fu­ture.

Pre-birth

There’s never been a bet­ter time to boost your bank bal­ance now that you’ve got a bun in the oven – mak­ing smart de­ci­sions in pre-con­cep­tion and preg­nancy can re­ally help to min­imise money wor­ries once your baby ar­rives.

The fi­nal count­down

First of all, it’s com­pletely nat­u­ral to fret about fi­nances dur­ing preg­nancy. Katie Wes­ney, a mother of three and strate­gic con­sul­tant at en­ableme Fi­nan­cial Per­sonal Train­ers, rec­om­mends draw­ing up a bud­get and pay­ing off any debt as soon as pos­si­ble. “Set a tight bud­get, stick­ing to nec­es­sary ex­pen­di­ture. Then track your spend­ing against your bud­get to keep your­self ac­count­able,” she says. “Try pay­ing down as much debt as pos­si­ble as this will free up cash flow once your baby ar­rives.” Katie also ad­vises check­ing that you will re­ceive your full en­ti­tle­ment of ma­ter­nity ben­e­fits from the gov­ern­ment and/or your em­ployer, and de­ter­min­ing what hap­pens to your Ki­wisaver con­tri­bu­tions while you are on ma­ter­nity leave.

Needs vs wants

It’s easy to go over­board in the nest­ing process, but it pays to keep your over­all nest egg in mind. De­ci­pher what you and your baby re­ally need and scale back spend­ing on non-es­sen­tials.

“The truth is, a baby needs very lit­tle in the ma­te­rial sense,” says baby ex­pert Belinda Smalls of All Things Baby. “All they re­ally want and need to be­gin with is a safe place to sleep, nap­pies, ap­pro­pri­ate cloth­ing, food, so­cial in­ter­ac­tion, touch and love.” Belinda sug­gests jot­ting down the fol­low­ing on your ‘must haves’ list:

Safe sleep­ing space and warm bed­ding

Cap­sule and/or car seat

Buggy and/or baby car­rier

Warm cloth­ing

Nap­pies

Swad­dles

Black­out blinds

White noise.

Other items such as ster­ilis­ers, bounc­ers, play gyms and breast pumps are handy to have, but are either a) non-essen­tial, or b) can wait un­til fur­ther down the track to see if you or your baby re­quire them.

Spend vs splurge?

Of course, it pays to shop around when fork­ing out for fun­da­men­tals. Sign up to email data­bases of both on­line and phys­i­cal re­tail stores so you can be alerted of sales and hot deals, put items on layby or ask for a dis­count when pay­ing cash or bulk buy­ing. Some baby sup­plies stores also of­fer hire ser­vices for equip­ment such as cap­sules or breast pumps, or you could con­sider bor­row­ing bits and pieces or pur­chas­ing sec­ond-hand. “Most new­born items you can get away with buy­ing sec­ond-hand, as they are hardly used,” says Belinda. “For ex­am­ple, cap­sules can be ex­pen­sive, there­fore buy­ing sec­ond-hand can save you a lot of money. The im­por­tant thing when do­ing so, how­ever, is to en­sure it’s still in good work­ing or­der, con­forms to New Zealand safety stan­dards and is still within its safety war­ranty pe­riod.” A sim­i­lar ap­proach ap­plies when pur­chas­ing or hir­ing used bassinettes, Moses bas­kets, cots and bed­ding for your baby – it’s im­per­a­tive that ev­ery­thing is from a smoke-free home, the bed­ding is clean and the mat­tress is firm.

When two be­come one

Slash­ing the house­hold in­come is a daunt­ing prospect for most cou­ples, par­tic­u­larly those who have been liv­ing com­fort­ably on two pay pack­ets for some time. The key to manag­ing this sud­den change suc­cess­fully? Prepa­ra­tion. Katie sug­gests mak­ing some life­style changes, in­clud­ing liv­ing on a re­duced in­come in the lead-up to your baby’s birth. Saving those ex­tra dol­lars in preg­nancy could en­able you to stay at home with your baby longer, once your 18 weeks of paid parental leave have ceased. “Set­ting a ro­bust bud­get will go a long way in mit­i­gat­ing your anx­i­ety, so you can max­imise sav­ings be­fore baby ar­rives,” she says. “Some of my clients prac­tise liv­ing on one in­come while they are preg­nant and use the sav­ings to ex­tend their ma­ter­nity leave.”

Post-birth

If there’s any­thing that will coax par­ents into giv­ing up their morn­ing latte, weekly man­i­cure or that un­used gym mem­ber­ship, this is it: the cost of rais­ing a Kiwi kid to the age of 18 is es­ti­mated to be more than $250,000. Ac­tu­ally, this eye-wa­ter­ing fig­ure is likely to be even higher now, given the In­land Rev­enue Depart­ment cal­cu­lated it back in 2009. They based it on an av­er­age of $14,000 a year – the equiv­a­lent of two an­nual gym mem­ber­ships, a weekly man­i­cure and five lat­tes a day!

On­go­ing out­go­ings

While spend­ing on con­cert tick­ets, week­ends away and din­ner dates may dwin­dle for a while, ex­pen­di­ture on items such as nap­pies, baby clothes and child­care will quickly es­ca­late, so you’ll need to con­struct a new bud­get once baby ar­rives to ac­com­mo­date th­ese ex­penses. Dis­pos­able nap­pies and wipes, for ex­am­ple, can cost around $30 a week. You may also no­tice your elec­tric­ity bills creep­ing up in win­ter in an ef­fort to keep your home toasty all day, and from run­ning the bath more of­ten. “Child­care is also likely to be one of

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