Starting a family marks a pivotal time in your life. By being properly prepared, you can make the most of this rewarding experience.
Part of this preparation is making some fairly major decisions. One of which is deciding who will be the primary care-giver or if the duties can be shared.
The good news is that there are more choices than ever before.
Decide how to do the caring
It’s vital to talk to your partner or support person about the changes that having a baby will bring, including discussing money and the caring duties.
The decision about who will stay at home initially may come down to who has more experience with children versus who is more career-driven, or even who is more comfortable with household chores.
Sharing the caring may also be an option. The Australian Bureau of Statistics figures1 released in April 2015 show that couple families with children aged 0-11 years, 42 per cent of the employed male parents (surveyed in June 2014) used flexible work arrangements, up from 34 per cent nine years earlier.
Travel may be another factor, because if one partner travels for work more than the other, this may have an impact on your decision.
The money issue is also changing. While the average gender pay gap remains at a fairly high 17.9 per cent2, if a woman’s salary matches or is higher than her partner’s, the best option may be for her to stay in full-time employment.
Do the sums
Having a plan will help, as the 33rd AMP.NATSEM report in 20133 found it cost a typical middle-income family $812,000 to raise two children from birth until they left home, which is up 51% from $537,000 in 2007.
So start by entering your current income and expenses into our budget planner. Add the cost of nappies, baby food, nursery equipment and everything else you can think of.
Ensure you know the paid and unpaid leave entitlements you and your partner are eligible for, including any paid leave from your employer. Check out any government payments you may be entitled to as well. Once you’ve worked this out you can adjust the income levels in your budget depending on who is planning to take time off work.
To make this easier still, ASIC’s MoneySmart website has a useful parental leave calculator that helps you work out the income you’ll have over your break and the impact of taking less or more time off work.
We’re here to help
Once you’ve settled into the groove of parenting, you can use our cost of education calculator to work out the next stage in your journey.
If you’d like advice on how to use your money more wisely in parenthood, speak to a financial adviser or call us on 131 267.
This is a follow-up article about whether you would be better off renting or buying a property.