8 steps for budgeting for a baby

Are you awaiting the pitter patter of tiny feet? Congratulations.

Babies are adorable. They smell like Milo and their fingernails are tinier than you ever thought possible. But they are really, really expensive – from the extremely small socks right through to state-of-the-art prams. Plus, it turns out you’re meant to take care of them long after they’ve started walking and talking, so it’s a life-long financial commitment.

Before you welcome your new family member, make sure you’ve thought about how to prepare financially.

1. Saving for a baby.

Aiming to build a pool of cash savings to support your growing family makes good financial sense. Having money saved means more flexibility, the possibility of more time at home with bub, even better support around the house, like cleaners and gardeners. It will give you a chance to get properly set up before your newborn arrives, so you’re not buying pieces as finances allow.

2. Create a baby budget.

Everyone will have advice about what you need to buy. Aunt Helen wants you to have a special rocking chair. Your friend Priya recommends reusable cloth breast pads. The volume of stuff you’re supposed to have when you bring baby home can be pretty overwhelming.

Make a list. How far will your budget stretch? This can mean letting go of the artificial intelligence baby monitor or organic wrap collection, but it can be a chance to really think about what’s required. Plan for:

• Pregnancy medical costs (more on that below)
• Getting baby around (prams, car seats, carriers)
• Keeping baby comfy at home (basinet, cot, rocket-shaped bed)
• Feeding and clothing (so many onesies)

Don’t forget to include your needs in the costs of having a baby, either.

3. Cut down spending

Nine months is a long time to prepare, so there’s no excuse not to look for better deals. Now is the perfect opportunity to make sure you’ve got the best phone and internet plans, car and home insurance and bank accounts.

Anything you can pay off before the big day will help, too. If you can afford it, pay extra on your car loans or mortgage to lighten the load.

4. Check out your paid parental leave entitlements.

You might be eligible for parental leave from your employer. That could even include the option to buy or salary sacrifice additional leave. Every parent should check this out. Maternity leave is the most common, but other parents are increasingly offered options to be home for those precious early weeks.

The government also has a scheme called Parental Leave Pay. Depending on what you were earning before you went on leave, you could be entitled to up to 18 weeks of paid support, plus two weeks of “Dad and Partner Pay”. Find out the current weekly rate on the DHS website .

5. Confirm your medical plans.

Plan your healthcare well in advance. If you have private health insurance, check that it covers all the elements you’re after: your own room, prenatal GP visits and midwives who will tell you you’re doing great. Private obstetricians can mean big gap payments, even with the highest level of cover, so be sure you know what you’ll be up for.

If you’re going public, get registered with your preferred hospital as soon as you can – they do book up! Make sure you also plan for potential extra costs like ultrasounds, physiotherapy and prenatal classes.

6. Get on childcare waiting lists.

Don’t get stuck with the centre with the weird pongy sandpit. Plan ahead. Childcare spots fill up really fast, so forget the jokes about registering your child while they’re still in the womb and just register your child while they’re still in the womb.

Get across any rebates or subsidies for childcare, too.

7. Update your will and get life insurance.

This might seem morbid, but once you have kids it’s more important than ever to make sure they’re provided for.

It’s not a given that property and assets will be passed on to your children. When you update your will, you can also appoint guardians, should anything happen to you. Getting the right life insurance means they will be covered after you’re gone.

8. Be prepared to change your plans.

We all have ideas about the kind of parent we’ll be. It’s okay if it doesn’t quite work out as planned. Unexpected expenses are practically a rite of passage! The costs of having a baby are different for everyone, but with the right financial products in place, you’ll be able to tackle all of life’s surprises.