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Is your household under expansion? Australia welcomed over 305,000 new arrivals in 2015, according to the Australia Bureau of Statistics1. Waiting for your new bub can be exciting, daunting - and an opportune time to evaluate your finances. So what should be on the radar for parents-to-be?
Do you know what you earn and spend each month and how these figures will change when baby makes three? If not, it’s time to draw up a pre and post baby budget. Doing so will help you understand your incomings and outgoings and identify potential savings if, like many families, you’ll be dropping down to one income for a stretch.
Getting ahead with rent and mortgage payments if you can and paying down credit card debt can reduce financial stress in those early months of parenthood, when you’d rather focus on your new baby than your bank balance.
You’ll also want to become familiar with your employer’s paid parental leave scheme and check out your entitlement to Centrelink Parental Leave Pay.
Need to draw up a budget, but don’t know where to start? QSuper’s budget planner calculator can help you set a budget that balances your spending and saving.
If you’re planning to return to work in the short or medium term, your post-baby budget may need to include childcare costs. You may also be eligible for Centrelink Child Care Rebate and Child Care Benefit, government payments to help working families with the cost of care.
Are you having your baby in the private or public health system? Even if you sidestep health insurance excesses and gap fees for specialists by opting to give birth in a public hospital, you’re unlikely to get off scot-free on the cost front. Your pre-baby budget should include fees for services such as blood tests and ultrasounds, which can tally in the hundreds of dollars over the course of a pregnancy.
Cot, pram, car seat, change table, high chair… babies are little people who need a lot of gear. It’s easy for new parents to get carried away and spend four-figure sums kitting out the nursery with the latest designer gear. If you’re keen to avoid a budget blow-out on the big ticket items, good quality second hand equipment can be had for a fraction of the price of new, or may be able to be borrowed for free from family and friends.
Do ensure, though, that the items you buy or borrow meet the Australian product safety standards.
Many of us have life insurance through our superannuation policies, but do you have enough cover to provide for your expanding household? Preparing to become parents is the ideal time to review your cover to make sure you’re covered in the unfortunate event of death, disability or serious injury.
Do you have a will and if so, is it up to date? Research suggests millions of Australians don’t. While it may not be on the radar for the young and healthy, dying intestate (as it’s legally termed) can see your dependants’ grief compounded by administrative and financial difficulties, as they attempt to unwind your affairs. Impending parenthood is an opportune time to write or review your final wishes. A simple will from a solicitor can cost as little as $300, while the Public Trustee of Queensland provides a free service via its 16 offices and outreach service across the state.
1 Source: Australian Bureau of Statistics; 3301.0 Births, Australia, 2015; released 8 November 2016
2 QInvest Limited (ABN 35 063 511 580 AFSL 238274) (QInvest) is ultimately owned by the QSuper Board (ABN 32 125 059 006 AFSL 489650) as trustee for QSuper (ABN 60 905 115 063). QInvest is a separate legal entity responsible for the financial services it provides. Advice fees may apply.
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