New Parents Financial Checklist. | Davidson Institute

New Parents Financial Checklist.

Help when you’re expecting.If you’re preparing to welcome a little one to the family or have recently had your baby, firstly congratulations! Life is undoubtedly very exciting at the moment. As we’re sure you’re aware, with the excitement comes a number of significant lifestyle adjustments. Worrying about your finances shouldn’t be one of them. And that’s why we’re here to help.

This checklist is designed to help prepare you and your finances when planning for your child. It can help you remember all the things you need to consider financially as your family grows.

Consider this checklist as a starting point for adapting to your new financial life. Making the necessary financial arrangements now will allow you to spend more time loving and caring for your child into the future.

For financial education and tools to help you build financial confidence, visit davidsoninstitute.education

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What’s in this guide: Step 1. 4Assess your finances.

Step 2. 6Add up your expenses.

Step 3. 8Check Government assistance.

Step 4. 10Save strategically.

Step 5. 11Check your insurance.

Step 6. 13Plan for your future.

Cost of having a baby checklist. 14During pregnancy.

One-off newborn expenses.

Costs at a glance. 16

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Step 1.Assess your finances.

Take a snapshot of where your money goes.

Whether you want a better understanding of your money or you’re worried about coming up short, an important first step is to take stock of your current financial state. Think of this as a financial health check. By spending a bit of time reviewing your money now, you’ll have a better idea of where you stand.

It will also help you understand how you can accommodate the upcoming costs in your budget before the baby arrives.

Follow Step 1 of the Managing Money Guide.

Manage your debt wisely.

Find out where you stand with debt and prioritise debts to pay off. Getting rid of debt helps ensure you’re ready to take on any unexpected expenses that come your way.

Follow Step 2 of the Managing Money Guide.

Create a baby budget.

Getting clear on budgeting basics early on is essential. Bear in mind expenses will change rapidly as your baby grows.

Follow Step 3 of the Managing Money Guide.

Plan for costs during pregnancy.

There’s nothing like being prepared. It’s possible to plan and save for most of the costs of having a baby. Like with any savings goal, the earlier you start the better chance you’ll have of achieving your goal.

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Step 2.Add up your expenses.

Plan for one-off expenses with your child.

Although having a baby means added expenses for the foreseeable future, there are some that you should only need to accommodate once. These can add up considerably, so it’s important to plan for them.

See Cost of having a new baby checklist on page 14 to better understand the one-off baby expenses.

Be aware of ongoing expenses.

Gaining a good understanding of your infant’s needs, and having a healthy emergency savings fund each month, will help enormously.

Costs at a glance on page 16 is your quick guide to the costs of baby purchases and childcare.

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Prepare for decreased income.

When having a baby, it’s possible your income will be reduced for a period of time. This is where your pre-baby savings come in handy. Having some money saved will mean you’re better prepared to live within your budget when the baby arrives.

When you have a baby or adopt a child under 16, you may be entitled to Parental Leave from the Government and you may also get paid Parental Leave from your employer. You are also entitled to unpaid leave.

Find a local paediatrician.

Your baby will need regular check-ups to ensure they’re healthy and happy. Check with your health insurance provider for in-network paediatricians.

Paediatricians at a hospital outpatient clinic or at a community health centre is covered by Medicare. Private paediatrician’s fees will vary. When you make the appointment, ask how much it will cost and how much you’ll get back from Medicare.

Find a paediatrician near you.

Plan your childcare.

Whether you live in a one or two parent household, there will probably be costs associated with childcare needs. You may need to consider options for day-care. Take time to weigh up your options. Look into day-care centres in your area to see which one best fits your budget.

Find childcare services near you.

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Step 3.Check government assistance.

Check your eligibility.

The Government offers a variety of parenting payments to help families with the costs of raising children. Eligibility depends on a number of factors including your income.

You can use Service Australia’s Payment and Service Finder to find, estimate and compare payments and services you may be able to receive.

Check to see if you are eligible for:

Parental Leave pay

Dad and Partner pay

Newborn Upfront Payment and Newborn Supplement

Family Tax Benefit

Child Care Subsidy

Additional Child Care Subsidy

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Step 4.Save strategically.

Create an emergency fund.

An emergency fund is that necessary catch-all for ensuring your financial security. Although there isn’t a set amount that you should save, it’s recommended to keep about three to six months of expenses in an accessible account.

Saving for an emergency fund should be part of your overall savings goals. This video shows the basics of budgeting and gaining control of your money.

Saving for their education.

As the cost of education increases, more parents are looking for ways to save for their children’s education. Even for those not seeking a private education, there can be significant add-on costs within the public school system.

Learn more in this article about how to save for your kid’s education.

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Step 5.Check your insurance.

Apply for peace-of-mind insurance cover.

Life insurance is designed to provide you and your family with financial security if you were to pass away, become terminally ill, or in some cases, if you become unable to work.

Add your baby to your private health cover.

Your private health insurance can ensure that your baby gets the care when they need it.

Read more on Private health insurance and pregnancy.

Types of cover that might suit your family include:

Income Protection Insurance: assists you in continuing to meet your everyday living expenses if you are unable to work due to sickness or injury.

Terminal Illness and Death cover: helps to secure your family’s future against the unexpected. A lump sum is payable under the policy in the event of your death or diagnosed terminal illness.

Total and Permanent Disability (TPD) Insurance: pays a lump sum in the event you become totally and permanently disabled and are unlikely to work again.

Living Insurance: provides financial support if you suffer a specific medical condition such as cancer, a heart attack or a stroke.

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Step 6.Plan for your future.

Review your investments.

If you have any investments such as shares, managed funds or exchange traded funds, it’s time to check in with how well they’re serving your new needs and fit your current risk profile.

You can learn more about investing and how a professional financial advisor may be helpful.

Plan for your retirement.

From where you sit now, retirement is likely to seem a long way away. However, there’s no reason you should pause retirement contributions because of a new baby. Planning your own stable financial future is crucial for your family’s prosperity in the future.

This video will guide you through some of the key financial considerations on planning your finances for retirement.

Prepare your estate plan.

While it’s not likely to be a scenario you want to consider, it’s essential to make the necessary arrangements in the event of your death. An estate plan includes your Will and other key documents that detail how you would like your assets distributed after your death.

Find out more about the steps involved in estate planning.

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During pregnancy Budget ($) Notes

Health insurance policy with obstetrics and childbirth cover.

Doctors and Hospital bills.

Some things to consider:

• Will your pregnancy and birth-related costs be covered by your health insurance?

• If so, is there a waiting period before you can claim benefits relating to pregnancy and birth?

• If there is a waiting period, it’s worth getting your insurance organised early.

Prenatal vitamins and probiotics

Maternity clothes

Baby’s bedroom Budget ($) Notes

Cot

Cot mattress

Cot blankets and bedding

Baby’s sleeping bag

Baby monitor

Disposable or re-usable nappies

One-off newborn expenses.

Cost of having a baby checklist.During pregnancy.

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Feeding Budget ($) Notes

Bottles, including teats and bottle brushes

Sterilising equipment

Breast pump

Bibs and cloths

Feeding pillow

Highchair

One-off newborn expenses.

Clothes, bath time and changing Budget ($) Notes

Baby bath

Nappy buckets

Swaddling cloths

Changing table

Travel & Playtime Budget ($) Notes

Travel cot

Car seat

Pram/stroller

Baby carrier

Changing bag

Rattle and other toys

Playpen

Walker/bouncer/swing

Child safety: gates, cupboard latches

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Average spend per year on a baby for the first 4 years.

Source IBISWorld 2019. Costs don’t take into account inflation. Consumer Price inflation subsequently has been September 2019: 1.7% and September 2020: 0.7% (source Reserve Bank of Australia).

Costs at a glance.

Total $7,917 per year

Other things

$280

Food & Nutrition

$1,227

Footwear$122Nappies

$606

Childcare

$4,340

$252

Toys

Clothes

$649$441Furniture

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Things you should know: This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness for the information to your own circumstances and, if necessary, seek appropriate professional advice. This document New Parent’s Financial Checklist is produced by the Davidson Institute. The Davidson Institute offers a range of money management topics for individuals, businesses and community organisations to help them build their financial confidence. For more information visit davidsoninstitute.education This information is current as of 17 May 2021. If you come across any other relevant information not included here, please email us at [email protected] and we will consider its inclusion for the next update of this document. Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.

WBC 05/21

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