Par­ents are drown­ing in baby debt

The Morning Bulletin - - NEWS - LANAI SCARR

PAR­ENTS are drown­ing in the ex­pense of hav­ing a baby and are go­ing into mas­sive debt as a re­sult.

News Corp Aus­tralia can re­veal a sur­vey of 1002 Aus­tralians in July found one in five par­ents had to re­turn to work ear­lier than planned af­ter hav­ing a baby due to fi­nan­cial dis­tress.

Alarm­ingly, one in 10 fam­i­lies said they had re­lied on credit cards to cover ba­sic liv­ing costs in the first year of their baby’s life.

The re­search, con­ducted on­line by PurePro­file on be­half of Mozo, also found nearly 70 per cent of Aus­tralian fam­i­lies with an in­fant felt some level of fi­nan­cial strain in the first year of their baby’s life and one in five par­ents found the ex­pense of a new baby was more than they had an­tic­i­pated.

Nearly half of all par­ents ex­pect­ing a bun­dle of joy are mak­ing a con­certed ef­fort to bud­get and fi­nan­cially pre­pare be­fore the birth of their baby, but de­spite their ef­forts, many are strug­gling to make ends meet and cover costs.

Mozo di­rec­tor Kirsty La­mont said the re­search high­lighted the ris­ing cost of baby-re­lated items such as nap­pies, wipes and for­mula as well as ma­jor pur­chases such as cots, prams and even the grow­ing cost of qual­ity child­care.

“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 and $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 when man­ag­ing the cost of a new in­fant.”

Alys Gagnon, ex­ec­u­tive di­rec­tor of The Par­ent­hood, said get­ting more em­ploy­ers on board with supporting and pro­vid­ing ex­tended paid parental leave was the key to re­duc­ing fi­nan­cial strain for fam­i­lies.

“I would ar­gue that lots of em­ploy­ers talk big game about gen­der equal­ity but 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 that they need to spend with their new­born ba­bies,” Ms Gagnon said.

“It’s ter­ri­fy­ing to me that peo­ple who work hard and earn good wages would have to live off their credit cards sim­ply be­cause they have brought a baby into the world.”

Kate Pol­lard, co-founder of Cir­cle In, a busi­ness de­signed to get more par­ents back into the work­force and in con­trol of their parental leave jour­ney, said the ris­ing costs of liv­ing were pres­sur­ing fam­i­lies back into work af­ter hav­ing a baby “not on their own terms”.

“It is un­for­tu­nate but I think be­fore hav­ing kids, where pos­si­ble, cou­ples do need to talk about money and need to plan for a baby,” Ms Pol­lard said.

“You need to save up for hav­ing a baby and parental leave and also what you will do post baby as the re­al­ity is even when par­ents re­turn to work, for many it is not full time.”

Cindy Lau, 28, said af­ter hav­ing her el­dest daugh­ter Mia, 3, she had to re­turn to work early due to fi­nan­cial rea­sons.

“I wanted to take a full year off with Mia but ended up hav­ing to re­turn to work when she was seven months old,” Ms Lau said.

“We ran out of money at six months and were liv­ing off sav­ings in the last month. It was re­ally hard.”

The cor­po­rate man­ager who is due to give birth to her sec­ond daugh­ter any day said she and her hus­band pur­posely put off hav­ing a sec­ond child un­til they could save for it.

“This time around we will be able to fully fund the time off and there will be less stress,” Ms Lau said.

“I think we do need to have more dis­cus­sions around this topic be­cause it is a real is­sue for many fam­i­lies.”

Min­is­ter for Fam­i­lies and Chil­dren 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,” a spokes­woman for Mr Fletcher said.

Photo: Richard Dob­son

BABY BLUES: Pic­tured at Clem­ton Park in Syd­ney is Cindy Lau, 28, and her daugh­ter Mia Tam, 3. Fig­ures show that some Aus­tralian fam­i­lies go into fi­nan­cial dis­tress af­ter hav­ing a baby be­cause they have not ad­e­quately planned for the fi­nan­cial as­pect.

One in 10 fam­i­lies re­lied on credit cards to cover ba­sic liv­ing costs in the first year of their baby’s life.

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