Prepare for a baby, financially

Are you or someone you know planning on starting a family soon? Here's five tips to help get the finances order to be baby ready.

Becoming a parent can be an exciting journey. It can also be an expensive one. We’ve put together some tips for thinking ahead and managing the financial aspects of raising a family.

1. Consider the upfront costs

Before having a child, it pays to consider the upfront costs. These may include:

  • Baby clothes and equipment—a cot and mattress, nappy-changing table, high chair, car seat, stroller and nappies, just to name a few.
  • Upgrades at home—you may want to paint and decorate a nursery.
  • Maternity clothes.
  • Doctor’s bills and hospital expenses.
  • Medical tests and scans.

2. Work out the ongoing costs

It takes a decent amount to raise healthy, happy children. And once your baby’s born financial expenses only increase. 

According to the AMP.NATSEM Cost of kids report 2013, a first child can cost on average $281 per week from birth to age 24. Costs for things like food, clothes, child care, education, hobbies and a range of other things can continue eating into your household income for a long time.

3. Set up a budget

When planning to balance your household income and expenses, use our budget planner. Factor in your household income before and after the baby’s born (taking into account any loss of income) and consider:

  • Essential living costs—e.g., regular ongoing expenses and loan repayments or rent costs.
  • Upfront costs for things like baby expenses and medical costs.
  • Paid parental leave you or your partner may receive from your employer.
  • Government leave scheme which may provide 18 weeks of pay at the minimum wage—find out more at the Australian Government website.
  • Child care and whether your family can step in if you or your partner returns to work.
  • Ongoing costs. Plan ahead as far as you can for these. You may even want to consider whether you’ll need to cover school fees down the track—use our cost of education calculator.

4. Set up a savings plan early on 

With a budget in place, you’ll understand the costs you’ll need to cover. And when it comes to meeting them, everything can be easier if you set up a baby savings plan and automatically save money for upcoming expenses.

The earlier you start saving the better. So even if you’re not sure how soon you’ll be starting a family, you can still put a savings plan in place today.

5. Regularly review your spending

Once your baby is born, sit down every month and evaluate your spending. Aim to find ways to cut your spending. The TrackMYSPEND app can help you understand any new spending habits so you can manage them and stay on track.

It’s a big change

Starting a family is a major life event, so it’s important to seek help in managing your finances if you need to. Find a financial adviser and get some professional advice as early on as possible. That way you can make the most of any money you earn before the baby’s born and avoid financial stress at a time that can be one of life’s most special.

Budget planner calculator

Use our Budget planner calculator to assess your current financial position and how much you may be able to invest. 

Start budgeting today

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© AMP Life Limited. This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.