Eating out last night with some friends, conversation ranged- as it normally does- from the latest movie we’d seen at the pictures to the oddity (and huge prices) of the Tiffany engagement ring app. Finally, it turned into a discussion of having kids.
Of course, around the table were people of very different situations, some in long-term relationships, others still single, others wanting to start a family. The overwhelming consensus was, however, that none of us were financially ready to start a family. Recent figures revealed that a baby can cost between $10,000 and $16,000 in the first year. Never has there been cost people are more willing to pay.
Yet to provide the absolute best for our kids, what are some financial steps we should take when preparing to start a family? Inspired by an article on Sydney Morning Herald online.
Wait Until You’re Set Up
Everyone wants the best for their kids, and wants to be able to provide them with a loving, stable home. Part of that is being financially stable before having children. Returning to my dinner last night, while many of us are on reasonable incomes, some were working part-time or casually, others were at entry-level positions and wanted to climb higher before stepping out of the workforce. Experts recommend waiting to start a family until you have a reliable, secure income and have reasonably stable finances, such as low levels of credit card debt.
Make It A Saving Goal
We’re perfectly happy to save up for a new car, so why is it that so few people mention saving for a family as an everyday goal? Especially when it is a significant and ongoing factor in our budgets once we have a family. If you’re keen to start a family, make it a savings goal over the next couple of years. Certainly, with the increasingly fragmented job markets, we aren’t necessarily going to see maternity leave should we be self-employed, a contractor or casual. So setting up a next egg for the first couple of years of your baby’s life is a great measure for financial stability.
Baby Bonus Or Paid Parental Leave>?
There are calculators on the Department of Human Services website that allow you to calculate which government scheme would work best for you, as well as providing information on Family Tax Benefit A and B. Ensure that you’ve developed a thorough budget and are aware of what tax benefits are available to help.
Childcare Or Staying At Home?
Financial reasons are cited for the return of most new parents to the workforce. Experts suggest breaking down the numbers, whether the exorbitant cost of childcare is negated by your return to work. That said, there are non-financial benefits on both sides. Spending a lot of time with your young family on one hand, while on the other hand there is the benefit of adult interaction, skills development and maintaining a career path on the other. It’s a personal choice, and completely unique to every individual situation.
When preparing to start a family, there are plenty of networks you can take advantage of in order to prepare well and improve your situation financially. Ask around when looking for baby gear and clothes, there’ll be plenty of new parents ready to discard the items their children have grown out of. Talk to family members about helping out with childcare, growing up I think I saw my parents a couple of days a week, spending the rest of my time happily passed from Greek to Italian to Irish members of my big family. Research the local parents group- they’ll all prove incredibly helpful when the time comes.