Starting a family is an exciting time but it can also be an expensive one.

Starting a family is exciting, but it can also mean big changes to your lifestyle and your finances. As expecting parents, it’s natural that you may have a lot of questions around family finance planning, or how to manage work life balance if one or both of you are in the workforce.

One of the main questions you may have when starting a family is “how much do babies cost?” According to research, it costs an average of $144 a week to raise a child between the ages of zero and four, not taking into account any amount you may be paying for childcare1.

It could help to plan and have a family budget in place to help you better manage new financial responsibilities. If you’re not sure where to start with your family finance planning, these family budget and family work/life balance tips may help you better plan for the future.

9 budget tips for managing family finances

Include medical expenses in your family finance planning

Whether it’s ultrasounds, birthing classes, vaccinations or regular check-ups, one of the biggest expenses you may come across when having a baby is the medical costs. If you include these in your family finance budget, you might potentially save you and your family from any unexpected stress down the line.

Many private health funds also have waiting periods before you can claim on pregnancy and birth-related costs, so it may be worth considering this as well when you’re planning your budget.

In addition to the regular costs, there are other things you may need to factor in that could affect your medical expenses. For example, regardless of whether you choose to have your baby in a public or private hospital, it’s worth investigating if there are out-of-pocket costs, even with Medicare or private health insurance.

Likewise, consider doing some research if you want your child to be covered under a health insurance policy, as a single or couple policy may need to be extended to a family policy.

Consider other upfront and ongoing costs

It can also help to think about other costs that come with having a baby, like:

  • car seat and stroller
  • cot and mattress
  • change table and high chair
  • baby clothes and diaper bag
  • food, nappies, bottles and formula
  • childcare

Research your employer entitlements

Many organisations have their own parental leave policies, which may include various paid and unpaid parental leave entitlements for new mothers and fathers.

If you’re unsure, it may be a good idea to speak to your employer to see if there is a scheme in place, and what they offer as part of this. At the same time, you may also want to find out if you’re eligible for any annual leave, long-service leave or regular unpaid leave if you’re planning to take time off work.

When you’re speaking to your employer, it may also be helpful to check the company policy around superannuation. Super generally isn’t paid when you’re on parental leave, so you might want to consider whether you’ll make additional contributions while you’re still working.

Explore the government’s paid parental leave scheme

If you meet certain eligibility criteria, you may be able to receive additional support from the government’s paid parental leave scheme, which can be helpful if you are trying to balance money and family relationships.

With the paid parental leave scheme, primary carers of newborn or adopted children can apply for parental leave payments from the government, which provides the national minimum wage for up to 18 weeks2. These payments can be received in addition to any payments your employer pays under its own parental leave policy if you’re eligible.

Investigate other government assistance options

Beyond the paid parental leave scheme, there’s a range of additional support options for families, which may also help in managing family finances. You may be entitled to other assistance such as Dad and Partner Pay3, which provides up to two weeks of government-funded pay, or the Family Tax Benefit, which helps with the cost of raising children. The government also provides assistance with childcare fees for certain eligible families.

If you want to find out more information on what government assistance is available to you, the Department of Human Services website has plenty of information on the different options out there.

Create a family budget with the information you’ve collected

After you’ve considered the expenses you may have when you start your family, as well as any entitlements you may be eligible for and how long you may take off work, it can be helpful to set up a budget and start putting money aside for your family’s future.

When you do this, it helps to account for any existing day-to-day expenses, such as utility bills, groceries, petrol, insurance, rent or home loan repayments, and other debts you may be paying off. 

In building your family budget, you may also want to factor in any additional sources of income (such as investments), and whether you have family that may be able to assist in helping you minimise expenses, such as childcare.

Prioritise your existing debts if you can

If you have existing debts, like credit cards, personal loans or a home loan, you may want to consider how you can reduce these debts as much as possible before the baby arrives, particularly as you may encounter some unexpected expenses along the way.

On top of making regular debt repayments, there are other things to consider that could help you manage debt. It might be beneficial to think about:

  • your credit card situation and whether you’re really getting a good deal when you factor in annual fees or additional benefits
  • consolidating your debts into one if it means you’ll pay less in fees and interest charges
  • if you can pay off your home loan faster or refinance to reduce the loan payment amounts
  • higher interest rates and added fees that can also really affect what you pay back on top of the principal amount, so consider shopping around to see if you can get a better offer

Consider your will and broader estate plan

Starting a family is a big responsibility, and it means that you may need to put more thought and planning into what will happen to your little one if the unexpected happens.

In this case, estate planning can be a good idea if you want to protect your family’s future. Estate planning includes more than just your will – it includes decisions around who will look after you and your child if you’re ever in a situation where you can’t make decisions for yourself, as well as documenting how you want your assets (which may include insurance and super) to be distributed should you pass away.

It’s also worth considering who you would trust to take care of your child should something happen to you or your partner.

Remember that money isn’t everything

It’s exciting to welcome a new addition to the family, but it can be an expensive and overwhelming time for you and your partner, particularly if you’re receiving different pieces of information from different sources on the parenting front.

While it may be tempting to invest in the most expensive pram, baby clothes, or day care centre for your little one, it’s worth considering that it’s your love for your child, not the amount you spend on them, that matters in the long run.

With this in mind, you may want to consider forgoing some non-essential baby items if you’re managing your family budget. Alternatively, you could consider opting for things that are second hand or handed down from families whose children are now a bit older.


AMP.NATSEM report - The Cost of Kids: the cost of raising children in Australia
Department of Human Services - Parental Leave Pay
3 Department of Human Services – Parental Leave Pay – related payments and services

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