If you are considering having children, first of all, congratulations! Second of all, have you made sure you are financially prepared? In 2002 NATSEM released an Income and Wealth report that estimated the average cost of raising two children in Australia from birth to when they leave home was $448,000. NATSEM’s most recent report in 2011 estimates that the cost is around $812,000: almost double. With that, take into consideration the following so you don’t have financial stress when your baby comes.
Preparing for the birth
The first things you need to consider are doctor’s appointments, scans/medical tests, maternity clothes and birthing classes. Then, when it is nearing the end of the pregnancy, it’s time to shop for the baby. Clothes, feeding equipment, pumps and furniture for the baby’s room. The BabyCentre says the average cost of buying nappies alone is something you need to think about straight away. If the average nappy costs around 75 cents, and a baby uses about 6 – 8 nappies per day, then before the child is toilet trained, you will be spending at least $6,000 on nappies alone.
After the birth
If you are going to raise a baby with your partner, then you must discuss if one of you are going on maternity or paternity leave. What was once a two-income-household will now become one-income and this means you have to break your budget down. This will help you reevaluate your finances and goals for the future.
If you’re single, again breaking your daily budget down is key to understanding how much you need to save. Ask yourself how long you will need to be off work for? – If you do go back to work, how much will it cost for child care? Do you need to cut down your hours and what will that mean to your finances?
Spend how you normally would for two weeks, making sure you note each and every expense down. Then you can see what are unnecessary items in your life are and cut them out accordingly.
Another saving tip in prep for the baby is buying items after the baby shower. That way, you won’t double up on what you get or you could even register to know exactly what you are getting. Either way, definitely use the generosity of others to your advantage – that’s why you have friends right?
When you’re preparing to have a baby talk to the team at Bank of Heritage Isle so you can understand your finances going into this incredible adventure.