Bringing a child into the world may very well be the most rewarding experience you will ever have. The emotional bond that is formed between a parent and an infant is unlike any other, and despite the 2:00 AM feedings, dirty nappies, and constant fears and feelings of inadequacy (Am I really capable of raising this child?), the fact of the matter is that most parents wouldn’t trade the experience for any amount of money.
And it’s a good thing too, because having and raising a baby can end up costing some serious amounts of cash. In fact, it’s estimated that Australian families use about 20% of their wages on raising kids1—which amounts to approximately $250 per child, per week. Multiply that number by twenty years or so, and you can see how expensive the little blighters really are.
But hey, that’s no reason to panic. With a bit of preparation, you’ll be able to raise your family well, even if your income may leave something to be desired. Just follow these seven tips, and look forward to all the good times that come from having a baby.
1. Start Saving
If you don’t already have some savings built up, then now is certainly the time to start. Consider your family’s income (or more specifically, the income that you’ll have once the baby arrives, if you plan on having one partner be a stay-at-home parent), and determine what percentage of that income could potentially go towards your savings. A savings account—is it for a child’s education, an unforeseen emergency, or for any other specific or nonspecific reason—is an absolute must when you have a child. You never know what’s going to happen, but if you have money set aside, then that’s one less worry.
2. Figure out your budget
Budgets are great. They help you know exactly how much money you should be spending over the course of a month, and they keep you from inadvertently making purchases with cash that is needed elsewhere. If you already have a budget, then congratulations! Of course, at this point, whether you do or not is almost irrelevant, because you’re going to have to scrap it and start fresh to accommodate the arrival of your baby. Consider the costs that are to come: nappies, formula, clothing, toys, baby seats, prams, daycare fees… these are just a few possible expenses. So, take some time, sit down with your significant other, and do a bit of research while planning your new baby-friendly budget.
3. Invest in insurance
The first thing that you should do in regards to your health insurance is to go back over your policy with a fine-toothed comb and determine exactly what is, and what is not, covered. Not all plans cover the same things, and if you want to make sure that your child is insured (and you definitely do), then you may end up having to consider extending your cover. Life insurance to cover your family should you unexpectedly pass away, Health insurance so that your baby can get regular shots and checkups, even car insurance that covers a baby seat—these are all important and necessary, and need to be prepared for before the little one arrives.
4. Take it easy on impulse buying
Look, we understand; you want the best of everything for your child. As such, you may find yourself dropping loads of money buying top-of-the-line clothes and toys. However, these purchases can really add up. Instead consider shopping second-hand, or checking with loved ones to see if anyone has any hand-me-downs that might be available. Your child isn’t going to care what kind of label her new pyjamas are sporting; she’s just going to care about being comfortable and warm. Resist the urge to go out binge-buying for unnecessary baby supplies, and you’ll have more money for the things that really matter.
5. Spring clean
Not buying overly-expensive new items can save you some significant money, but what about the things you already own? Go through your possessions, and ask yourself, what do I really use? What do I really need? If you’re honest with yourself, you may discover that you home is filled with things that you absolutely wouldn’t miss. Get rid of those things by selling them. Hold a garage sale, or make use of the internet or local classifieds sections in newspapers. You might find that you’ve been sitting on a small fortune without even knowing it.
6. Prepare for the worst
When your family consists of just you and your spouse, you might not feel as though you need to have a Will. But once a baby comes along, that will all change. Having an innocent little human being that is totally dependent upon you means that you need to make sure that they will be provided for should something happen to either you or your spouse (or both). A good lawyer will help you put together an estate plan that will help prepare your family for the worst.
7. See what assistance is available
If your child is on the way and you’ve reworked your budget, cut down on your expenses and still don’t see how you could possibly afford to care for your new baby, don’t give up hope. Government assistance is available to qualifying parents. Check with the Department of Human Services to see what kind of help you and your family may be eligible to receive. Remember, your child deserves to be raised in a safe and healthy environment; if you need help to be able to provide that, do what you can to receive that help.
1 News.com.au: http://www.news.com.au/finance/money/australian-parents-hit-by-rising-costs-of-raising-children-suncorp-costs-of-kids-report-reveals/story-fnagkbpv-1226772529547