Working out what you may need for your baby and creating a budget as soon as possible will help you prepare for upcoming expenses.
Review your current situation
The first step is to review your current financial situation. What are your current household income and expenses? Where can you cut costs? Talk to friends and family about how much they spent. This sort of budget review will help you understand where you are now, and where you need to be based on estimated expenses for the baby.
As you go through this process, it’s important that you and your partner discuss:
- eligibility for government or maternity leave entitlements
- when your maternity leave will start and for how long
- maternity leave and/or leave without pay arrangements
- full-time or part-time work or taking a break after the baby is born.
Estimating pregnancy and baby costs
Once you have reviewed your current situation, the next step is to understand the up-front costs of having a baby and add these to your budget. Costs can vary depending on the brands you purchase and the types of items you buy. According to the Australian Institute of Family Studies, the costs can vary from $3,000 to $13,000 for the first year alone.
Here’s a rough breakdown of what you may need:
- food and formula
- nursery setup
- cot and / or bassinet
- car seat
- high chair
- safety fixtures for around the house
- other items such as baby carriers, baby bouncers or play mats, bath supplies and dummies.
And don’t forget:
- medical bills – some medical costs are covered by Medicare but not everything
- having your baby in a private or public hospital
- purchasing maternity clothes
- unexpected issues that may arise such as IVF.
Tips to help you cut costs
It’s never too late to start a savings plan to prepare for baby-related expenses.
Ask experienced parents what they found useful
A great way to understand what may be necessary.
Shop around/buy in bulk
Wait for items to go on special and consider putting things on layby.
Look for good quality second hand items
Family and friends are a great source of pre-loved toys and clothing.
What’s essential and what’s nice to have?
It’s easy to walk into a baby store and get carried away with all the latest fads and trends. If the budget’s tight, ask yourself if you really need it and how long you’ll be using it for.