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How to financially plan for a baby


Kate Wick

By Kate Wick

4 min read

While many people are concerned about saving up for a home loan deposit, a lot of young couples will also be considering planning a family. While there are relationship and emotional consequences to think of, financial planning should also be a chief consideration at this juncture.

Effective budgeting and saving could alleviate a lot of financial pressure, which could otherwise add additional stress to your relationship.

1. Time off work

Are you prepared for time off work? Checking your leave entitlements is one of the first things you should do when planning to have a child. Once you know what you're entitled to, you can plan other savings or possible assistance around this.

Remember, if you take leave that isn't paid, you won't have an income over that period. Padding your savings account now could be a very good move. If you are pretty close to needing to take your leave, you should talk to your employer. According to the Department of Human Services, you'll need to provide your boss with 10 weeks' written notice.

2. Things for baby

Children are expensive. Raising two kids in a typical middle-income family will cost you around $812,000 according to research by AMP conducted in 2013. So, it's important to save money where you can, or you may find your credit card debt getting away from you.

Talk to families that have recently had children and see if they can save some items for you to use. Take advantage of your baby shower and request specific items you'll need, or at least tell guests what you don't need. 

3. Things for you

Being an expectant parent means a shift in priorities and a change in lifestyle. There will be foods, supplements and clothing that you will need that have to be paid for somehow. Once you have investigated what you will need over the next year or so — and found the most affordable options — start making a budget.

A great way to plan for this extra expense is to increase your outgoings now. Try making extra payments on your car loan or credit. Not only does this mean you'll have smaller interest payments in the future, it will also test your financially solvency in a practical way.

For example, let's say you've created a budget and, after considering loss of income and increased expenses, you find yourself $200 down per week on your current available funds. Stretching yourself by $200 now would be a very good indicator of whether or not this is a financially feasible move at the moment. Don't waste that money though — put it to good use.

4. Accepting help

Planning for a baby is critical to starting your family. This involves a lot of independence and self-reliance. But, it's also an opportunity for families to bond and for friends to band together. It's important at this stage of life to not confuse being stubborn with independence.

While you may not want to rely on family for help, accepting their kind gestures will not only keep you close at this time, but will save your credit card some serious stress. As mentioned before, it is quite likely that you will take unpaid time off work at some point. To make up for this, ensure you take advantage of every benefit available to you. If your employer offers some extra support for those on parental leave, don't turn it down — every bit helps.

The same goes for government services. There are many out there, and while you might not qualify for all of them, you may be able to receive a couple — which could make a huge difference.

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