And a baby makes three: Sort out your finances before the bundle arrives
Having a baby can be the most exciting thing to happen in your life. It can also be the scariest. You go from being a couple, looking after yourselves, to suddenly having to think about a third person.
And it’s not just any person, it’s a new baby that will be depending 100% on you. That’s a lot of pressure – so it’s understandable to feel a little stressed. This stress could come from finances too, because looking after a whole other human being, means things are more expensive.
Don’t worry, this blog will aim to alleviate some of that pre-baby stress you might be feeling. We’ll talk about the best way you and your partner can sort out your finances and be fully prepared for when your little bundle arrives.
Budget and plan for reduced income
When baby arrives, you’ll likely both need to take time off work. This inevitably means having a reduced income for some time. Thus, this highlights to importance of budgeting for times when you have less money flowing in. The best place to start is with your current expenses and trying to identify where you may be able to make some cut backs. You might be able to put more money away for when the baby arrives, so that you’ll to have a safety net to dip into.
Pay off any outstanding debts
If you have any outstanding debts, it’s a good idea to try to get these paid off or consolidated before baby arrives to alleviate stress. You’ll have a lot going on so it’s worth trying to find ways to reduce as much stress as possible. Start by paying off any credit card debts or any outstanding loans, this way you can save on expensive interest rates.
Above we mentioned the importance of cutting back on expenses. By reducing unnecessary expenses, you can start building up some savings. Having money to fall back on will help you to afford to pay for all the expensive costs associated with a new baby.
If you have trouble with saving, and are tempted to dip into it, try and make it a little bit more difficult to get access to your savings.
Talk about your finances with your partner
It’s important to have a conversation about finances with your partner before the baby arrives. This is to ensure that you have a clear plan for how money will be managed and who will be doing what so that are both on the same page when it comes to your income and expenses. So, if you want things to be clear and avoid any conflict over finances after the baby is born, it’s worth having that conversation. You may need to make some changes together about the way you spend money, or maybe you need to talk about what your financial goals are.
Making things crystal clear from the beginning will also help to alleviate stress after the baby arrives.
Get paid parental leave
You may be able to get paid parental leave from the government. It’s a good idea to check if you are eligible because you could receive a bit of money. Having these extra funds could really help you out in an important time. Here are some of the eligibility requirements for being able to receive parental leave pay from the government:
- You must be the main carer of a newborn baby or adopted child.
- You must earn under a certain amount.
- You must not be working or are on leave.
- Finally, you must have done enough work in the 13 months before the baby was born to meet the work test.
When you plan to go back to work you will probably want to start considering childcare options. In Australia child care can be expensive. This means it’s important to factor in the costs of childcare into your budget. Doing a bit of research on what options are out there, might help you to save on childcare by finding a suitable option for you. You could consider sending them to a childcare centre. Perhaps you want to send them there for a few days a week, and on the other days family or friends might be able to look after them for you. You may also want to consider hiring a nanny, which may be a more viable option.
Here’s an idea: When you fall pregnant, start paying the money you will be paying for school fees into a savings account. This will help you get used to having the extra expense, and the money you put aside can be used to fund your parental leave or any other costs you encounter along the way.
You may want to consider updating your health insurance. You may be happy to use public service or perhaps you would like to give birth at a private hospital or facility. Depending on what services you would like to have when you give birth will be able to influence your decision. Then it’s worth checking that the services you would like as a part of your birth are covered under the private health insurance you choose.
Getting life insurance is not something you think about when you’re single and don’t have any dependant. However, once you give birth to your first child, life insurance is likely to move up your list of priorities. It means that you can protect your child if anything happens to you. A life insurance policy works by paying money to a beneficiary such as your spouse. So, it helps to protect your in family if such unfortunate circumstances were to arise.
Returning to work
It’s a good idea to plan when you want to return to work. You may even want to try and setup up part-time hours so that you are able to ease yourself back into work. It’s worth speaking to your employer and having a plan for when you want to return to work.
Budget for baby expenses
Budgeting and setting aside funds associated with the costs of a having a new baby is a good idea. This is because there are many expenses that need to be made when a new baby arrives, so you want to make sure that you are adequately prepared to pay for these costs.
Here is a list of some of the things you will have to purchase, to prepare for the new baby.
- Maternity clothes – try find things that are feeding-friendly, if you will be breastfeeding
- Birthing classes
- Baby clothes and nappies
- Baby wipes
- Baby equipment like cot, change table, high-chair and pram, car seats
- GP visits
- Breast bumps or formula
- Baby bottles
This is just a basic list – there are many more things that you will find that you need when baby arrives. It’s easy to see how things can add up. This highlights the importance for setting money aside to pay for the necessities. Knowing that you have these funds to dip into will also makes things much less stressful. Nevertheless, you can make things a little less expensive by using some of the following saving tip.
How to save on baby expenses
Whilst there are many costs associated with brining a new baby into the world it doesn’t have to be as expensive as you think. The following is a list of tips and hints on ways you can save on baby expenses:
- Buy reusable nappies: whilst convenient, disposable nappies are expensive, not to mention bad for the environment. Reusable nappies carry a higher initial investment, but could end up saving you heaps in the long run. If you don’t want to buy reusable nappies, then make sure you buy your nappies in bulk.
- Get second hand baby equipment: you may want to splurge and invest in the most modern baby equipment out there, but the reality is, baby equipment is expensive and not used for very long. If you buy everything new, you’ll be surprised at how quickly it can all add-up. That’s why it’s worth getting some of the big things from second hand sources. You can try op shops or gumtree, and find baby equipment for a fraction of the price.
- Get convertible equipment: Try finding things that can grow with your child. Get a convertible car seat, which you can use for the first 30 months of baby’s life as a rear facing seat and then up to the first 4 years of life as a forward-facing seat. You can also get convertible strollers that function as a bassinette for a new born, that eventually turn into sit up prams for when they are a little older. It is also worth shopping around for second deals on both things. You can also find convertible cots, that turn into toddler beds once your baby has grown up a bit more.
- Breastfeed your child: If you can breastfeed, why not. You can end up making a significant saving on baby formula in the first year.
- Get unisex or neutral clothing for your child: you might want to by pink clothes for a baby girl, but it’s not long that your children are able to wear these clothes – babies grow fast. What if your next child is boy? It means that you won’t be able to use all those baby girl clothes as hand me downs.
- Make your own baby food: if you cook some vegetables and blend them up with a bit of water, you will have made a great meal for you baby. Mashed potato is also a good food for babies before they start eating solids properly. You can put these in little containers and put them in the freezer for when you are pressed for time.
- Borrow maternity clothes: it’s worth holding off on buying lots of maternity clothes, especially when it’s likely that you are only going to wear them for a few weeks. If you can borrow some maternity clothes from a friend or family member you might be able to save a bit of money on clothes that you are only going to wear for a short period of time. It’s also a good idea to buy maternity clothing bit by bit. You’ll start to grow quickly, and it’s hard to anticipate what you’re going to want to wear by the end of your pregnancy, so hold off if you can.
- Don’t buy unnecessary baby items: there are a lot of things you may buy because you think you will need it. Some things that you can get away without are a baby bathtub. You can give a baby a bath in any tub or basin that is well cleaned, and you support baby they’re in the water.
- Don’t buy too many toys: it’s easy to get carried away and want to shower your baby with gifts, but these can often turn into things that the baby plays with a few times and never again. Instead, get the baby to play with other household items that are safe for them such as plastic plates and cups or wooden spoons. You’ll be surprised at the amount of fun they can have with common household items.
Ultimately, it’s without a doubt that being in control of your finances before your baby arrives will make everything much less stressful. By taking a few small steps during the pregnancy, such us cutting back on expenses, building up some savings, and paying of any debts, you could make life a whole lot less stressful for yourself. Getting things organised such as childcare, health insurance and life insurance, will be a great way to make you feel on top of things, rather than waiting until after your baby is born. In addition, it’s also important to make sure you discuss your finances with your partner, just to make sure you are both on the same page.
Finally, it’s also necessary to starting planning what you are going to need for your baby. Making a list of the most important things you need will help you to get things together in advance. It can also help you to do it in the most cost-effective way. If you know exactly what you require, you can follow some of our tips for saving money. So, if you know you’re going to soon be a family of three instead of two, start getting things organised. That way you’ll be more excited than stressed when the bundle is on its way!