The arrival of a new child brings great happiness. With that also comes increased responsibility and new challenges. A recent study found that between 2003-2007 the cost of raising a child has increased by 50%*, with many of these challenges stemming from financial issues. With planning and a few valuable tips, you can prepare yourself to face future financial changes, and focus more time on enjoying your new arrival.
Take advantage of the many benefits and concessions provided by your employer and the government, designed to assist you when transitioning to becoming a new parent. From paid parental leave to family tax benefits, good preparation can avoid future stress before the baby arrives. This checklist from the Department of Human Services will help ensure you know what you’re entitled to.
Create a new budget
Understanding your budget is crucial before your baby is born. Knowing where money is spent allows you to make unnecessary spending cuts to free up extra finances to put towards the baby. Online resources like the Money Smart budget planner is a good place to start.
Assess childcare costsThe increasing cost of childcare in Australia means it can be a balancing act between choosing to stay home with your child or returning to work. In some cases your income when returning to work will only just cover the comparable cost of childcare. Explore the options that make sense to your budget and personal circumstances.
Plan for life
Beyond the immediate arrival of a child, it’s important to consider the ways you can protect your family from unforeseen life events such as unexpected death, serious illness or injury. In these cases, a well-suited life insurance policy provides financial assistance to cover household debts and mortgage repayments. Speak to one of our Life Insurance specialists or a financial adviser who can help you understand the options available to you.
Fund for the future
Education is one of the greatest gifts we give our children, and many families will commit a lot of time and money to educating their children. Regular contributions into a separate savings account, even if small initially, provide additional funds for education when the time comes.
Educate your kids
Kids start learning from parents as soon as they’re born. Introducing basic ideas around money from a young age, will give your children a good basis for money management in the future. Not to mention it can be fun introducing pocket money or even playing shopkeeper.
What financial tips can you share with other soon to be new parents?
*Source: AMP.NATSEM Income and Wealth Report: The Cost of raising children in Australia 2013>