So, to help you get your head (and new baby budget) around this new lifestyle, here’s a list of some of the new parent money mistakes to avoid, and some suggestions for what you could do instead.
Tip 1: Don’t forget the milk
We start with the age-old and often forgotten shopping list, where the key to having one is sticking to it. Tips for a budget-friendly shopping experience include:
- Make sure everyone coming shopping has a full tummy beforehand. Seriously.
- Check your pantry and fridge - if there are lots of leftovers or jars going off, try not to buy them again.
- When you only need one of something, don’t buy three just because they’re on special (unless it’s nappies).
- Try not to pay for convenience if you can help it – but if buying pre-cut carrots will help keep you sane, then go ahead.
Tip 2: Don’t let sleeping dollars lie
Spending time looking into some of the drier things in life like insurance isn’t exactly high on most people’s priority list (especially with a new family) but, it can be well worth it in the long run. Here are some things to research, to help you save money down the track:
- Costs of private versus public health cover
- Where you can make savings on things you need with bundles and rewards
- Making sure your insurance cover still fits your life
- The impact of any parental leave on superannuation (consider spousal super contributions and income protection insurance for the main breadwinner)
- Any Centrelink payments or government benefits you’re entitled to
- Better deals on living costs like utilities and credit card interest rates.
Tip 3: Don’t leave your budget out in the cold
When your lifestyle changes, things outside your budget can crop up. If you have a partner, it’s a good time to sit down with them and agree how to best manage your money together. Here are some tips for your budget:
- Get clear on how much raising children will realistically cost you.
- Make sure you set individual and family goals to work towards (they could be anything from paying down a debt to saving for something big).
- Use an online budgeting tool to help make budgeting easier.
- Have a way to keep track of your spending – there are plenty of apps available, or the AMP Bett3r account may assist you in staying on track financially, as it enables you to track your bills, set up savings goals and know what's safe to spend.
Tip 4: Don’t rely on your credit card
Credit cards can be convenient but they’re often more expensive than other loans because they usually have higher interest rates1. Plus, people tend to spend more than if they’re just taking out cash.
You also need to pay interest on any amount that hasn’t been paid off. So, to help get on top of your budget, make sure you pay down your credit cards first, and try to pay more than the minimum repayments. For more info, check out our article how can I be smarter with my credit card.
Tip 5: Make sure you have an emergency fund
One in eight Australians don’t have enough money set aside to cover a $100 emergency2. And, you don’t ever want to be in a position where you’re stranded with your little one.
An emergency fund can give you peace of mind and reduce the need to rely on high interest borrowing options. Get some pointers on how to set one up.
We’re here to help
Our article on preparing for a baby financially provides additional information to help you get prepared.
And if you’d like to speak to an expert about getting your finances in order, call us on 131 267 or use our find an adviser tool.
Don’t give up
It can be really tough learning how to be a new parent and juggling all the different hats you need to wear. Fortunately, there’s a lot of support around – sometimes it’s just about knowing where to go.
If you’re struggling financially, here are some free information sources you may want to access:
|National Association of Community Legal Centres||www.naclc.org.au
|Financial Counselling Australia||www.financialcounsellingaustralia.org.au|
|Department of Human Services||
or search for family support in your state
Downsizers can now make an after-tax contribution to their super of up to $300,000, using the proceeds from the sale of their home.