So you’re ready for a baby – what about the cost?
PREPARING for a baby is one of the most exciting yet daunting times of a parent’s life and so, too, is being in a good financial place.
There’s always plenty of celebration around a new arrival particularly when it involves the royals – this time for Prince Harry and Meghan Markle – but experts say it’s important to baby proof your finances beforehand.
The Australian Institute of Family Studies estimates the minimum cost of raising a child starts from $140 to $170 per week.
Receptionist Lauren CalandroSwan, 31, is pregnant with her first child and is due in August.
She and her husband, Kane, started paying extra off their mortgage 12 months ago to get ahead so there was less stress when their new family member arrives.
“We’ve been paying about an extra $500 a fortnight between us which means I can hopefully take a bit more time off work,” Ms Calandro-Swan said.
“We had a goal of what we wanted to save and we’re about $5000 away from that.”
National Australia Bank’s personal finance specialist Gemma Dale said having a baby is a “monumental life change” but it can also be a stressful period.
“Ideally you will prepare if it’s a planned pregnancy and you’ll start thinking about the costs involved,” she said. “Also start having financial conversations as a couple before the baby comes – it just takes out one of the stresses.”
There’s a long list of costs for parents to think about from hospital expenses, buying a pram, baby clothes, accessories, furniture and nappies to medical bills and child care, which all quickly add up.
Ms Dale suggests parents wipe any credit card debt they may have, start a savings plan as early as possible and pay extra off their mortgage if possible.
The Australian Securities and Investments Commission’s MoneySmart senior executive leader, Laura Higgins, urged prospective parents not to rush out and buy everything before the baby’s arrival.
“Buy the bare minimum before the baby arrives, pace yourself around purchases and do your research,” she said.
“Don’t get overwhelmed by all the must-haves before the child arrives. Buy second hand where it’s appropriate and look at your local community for swapping items and ideas as well.”
Parental leave pay by the government is up to 18 weeks and is currently set at $719.35 per week before tax, and is based on the national minimum wage.
The claimant must have earned an individual taxable income of $150,000 or less in the financial year before birth or the date the claim is lodged.