Are you considering starting a family sometime soon? As we all know, having a child costs money. Planning for the birth and the future ongoing cost of the family is imperative. The problem with preparing a family budget is that we are unfamiliar with the additional and ongoing costs. In this article, I plan to highlight some of the main areas you must consider and address when updating your family budget. Here are some things to consider when working out the cost of having a baby.
Pregnancy and Birth Costs
The initial phase of parenthood involves managing pregnancy and birth Costs. These include doctor and hospital bills, ultrasounds, birthing classes, maternity clothes, and potentially private health insurance. Understanding the distinctions between public and private medical care options is crucial, as each has its considerations and financial implications.
Public vs. Private Medical Care
The public health system offers coverage for routine tests, midwifery care, and hospital stays under Medicare. On the other hand, choosing private insurance allows for greater flexibility in selecting healthcare providers and facilities, but it comes with out-of-pocket costs. Most private insurance companies require a waiting period of up to 12 months before eligibility, so your insurance is something to organize well before trying to get a baby.
After Your Baby Arrives
Preparing for your newborn involves buying essential items such as baby clothes, nappies, bottles/formula, and a cot with bedding. While these items can be costly, you can save for second-hand purchases and consider rental or borrowing options for prams and car seats.
Childcare Costs
Planning for childcare post-maternity leave is crucial, especially for infants. Limited availability and varying costs make exploring options like family support, friends, full-day childcare, or hiring a nanny essential.
Changes to Your Income
The decision on when and how to return to work can impact income, childcare expenses, and superannuation. You may explore employer-provided paid leave options, including maternity and paternity, and consider leveraging annual or long-service leave. Depending on your income and assets, you may be eligible for government benefits such as parental leave pay, family tax benefits, parenting payments, rent assistance, and health care cards.
Should you require further information about financial planning for a child, please contact Peter Quinn by submitting an enquiry or calling us on +61 2 9580 9166 to book an obligation-free appointment.
The information in this document does not consider your personal objectives, financial situation or needs, so you should consider its appropriateness regarding these factors before acting on it. It is important that your personal circumstances are taken into account before making any financial decision, and it is recommended that you seek assistance from your financial adviser.