Planning for a Baby, Financially
In this day and age you simply cannot rely solely on Medicare to cover your obstetrician’s and hospital bills for your baby. Money problems when you’re expecting can leave you depressed and ruin your relationship with your spouse, and you don’t want that.
Planning for a baby starts two years before you even conceive.
If you’re a newly wed couple and eager to start a family, be realistic about your financials and honest about how much a baby really costs before you jump on the baby bandwagon. Wait a few years and enjoy each other’s company as you plan for a family financially.
Your relationship will be better off for it, but should you find yourself with a little bundle of joy on the way by accident, remember – you will still be able to make do and will just need to work a bit harder at getting financially organised.
What strategies do you use to plan for a baby financially?
Below is a list of things that would be useful to get organised for if planning to have a bub on the way.
Health insurance
An absolute must for couples is a joint health insurance policy that covers your costs throughout your pregnancy, birth and stretching a year after the baby is born. A good health insurance policy should cover hospitalisation and include obstetrics. You might have to pay more in the short term to reduce your access right down to $0, but as we all know, some pregnancies may be complicated and you may end up needing more care. Find out if an emergency C-section is covered.
Depending on the policy, waiting periods to enjoy the benefits of your insurance plan for your baby can range from 12 months to two years. Typically, the ones with shorter waiting periods will have higher premiums, which is fine if you don’t mind paying more to have your baby sooner.
If you do take up a plan that requires you to wait for two years, include fertility treatments into your extras. Especially if you have a family history of infertility or suspect your diet and lifestyle may take a toll on your fertility in future. Again, the premiums are higher but paying for the treatments outright is higher still.
Focus on a plan with quality hospital cover and check with the representative to find out which hospitals and obstetricians you’re eligible to use. Check with other mothers to see what they say about the listed professionals before you make a decision.
You probably won’t need extras such as prosthetics and hearing aids at this stage — the focus is all on your baby and you. While you’re at it, you may as well include a good dental care as it’s not uncommon for women to suffer dental problems during and after pregnancy as a result of calcium deficiency.
To compare and find out more about health insurance plans that cover the cost of having a baby visit iSelect Australia
How much do babies cost?
The baby bonus wasn’t a scheme to give couples an incentive to have children — it’s there to help new parents absorb the cost of having kids for the simple reason that kids, over the years, have gotten very expensive to have.
To find out if you’re eligible for the baby bonus and how much you can expect to receive, use the baby bonus calculator.
Most new parents don’t put much thought into how much it really costs to bring a child into the world. Of course, the figure varies from household to household depending on how much you earn but a study conducted by the National Centre for Social and Economic Modelling revealed:
“…the total cost in today’s dollars is $448,000 for the average family to raise two children from birth to age 20. For the average couple with two children today, those children cost around $310 a week, or 23 per cent of average gross household income of $1,324 a week.”
That figure looks quite scary and that’s excluding the cost of bringing the baby into the world. If you want to make that figure more relevant to your financial situation, you can visit the full report here.
Saving money before the baby comes
The big money sucker when you’re expecting a baby is doing up the nursery, buying a crib, baby clothes, accessories and a pram or stroller. Wait until after you’ve had your baby shower to see what gifts your friends and family give you. Alternatively you could register the gifts you want to receive with a department store like a bridal registry or better yet, do it online. www.kidspot.com.au allows you to create a baby registry and makes it easier for your friends and family to purchase the gifts from their own home.
Draw up an affordable budget for renovating the nursery and stick to it. Besides, babies only use the nursery for a small fraction of their lives. Try to steer clear of baby and nursery speciality stores, especially when you’re buying furniture. Look for second hand steals on eBay and local second hand stores but ALWAYS ensure the products you are buying are safe, meet Australian standards and ideally you should be able to inspect them before purchase to check this off.
Also, look out for special offers and introductory prices on new baby products and keep an eye out for free samples at the supermarket or online.
Another great money saving tip when it comes to baby food is to make your own. There’s a comprehensive list of baby food recipes at KidSpot Australia but make sure to check with your doctor and have him test your baby for food specific allergies.
Saving for your child’s future
With the availability of student loans at a whim in Australia, it’s easy to neglect the importance of a savings account for when your baby grows up. Many things can change in the next twenty years and what happens if fees are double what they are now and student loans become a thing of the past? Why not start them a Smarty Pig account or a high interest savings account before they are even born? It may either pay for University fee’s or better yet, one day even pay for a house deposit.
Accept donations
As an alternative to receiving gifts and presents for the baby shower and future birthdays to come; why not set up a bank account friends and family can deposit donations for the child’s future? You might think it awkward to ask for money instead of presents but everyone knows what money wasters children’s toys and products really are. They’ll be more than happy to put their money towards the child’s future instead.
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