March 3, 2014
Just like any major commitment, planning can mean the difference between becoming parents with minimal financial stress, or a lot. If you’re thinking about starting a family, here are a few financial things to think about:
Double income to single If things feel tight now, just wait until the baby arrives. For parents intending on taking more time out of the workforce than the parental leave subsidy allows (three months), the reality of going from two incomes to one will hit home pretty quickly.
It’s a good idea to work out what your weekly budget will look like on one income – mortgage / rent; utilities; insurance etc. If it’s too tight for comfort or even falling short, work out a savings plan to raise the money you’ll need to supplement the period of one income.
New costs The word ‘expensive’ takes on new meaning once your baby has arrived. From cots to nappies; medical checks; playgroups; nannies and formula, there is a never ending list of things you need to care for your little one. Visit some parenting sites to get an idea about the shopping list of things you’ll need – big ticket items and ongoing costs – and start a line in the budget dedicated to saving enough for those items at least for the first six to 12 months.
Insurance review It’s a good idea to review your health and medical insurances as well. Review your policies from the point of view of being a family and if there are better options on the market, consider changing.
Government assistance Don’t forget that the Australian government likes babies and children and offers some specific incentives beyond parental leave. These include the Baby Bonus; Family Tax Benefits Part A and Part B and the Child Care Benefit. Go to www.familyassist.gov.au for more information.