Starting a Family

Starting a family is a big decision and careful financial preparation is required. A financial plan for your baby involves three key stages:

A. Pre-pregnancy
B. Pregnancy
C. Post-pregnancy

A. Pre-pregnancy

1. Pay off your debts
Pay off your credit cards and other debts to increase your cash flow down the track when your baby arrives.
2. Pay off your home loan
For most people their biggest regular expense will be the mortgage, so it is imperative that you organise this before your baby is born. There are various options you can choose:
Prioritise paying off your home loan as fast as possible
You may be able to make extra repayments prior to giving birth and pay less whilst on maternity/paternity leave However, remember this could mean it will take longer to pay off the loan
Refinance into a flexible loan, which allows you to make repayments and then redraw the repayments made ahead of schedule so you still have access to your money when you need it
Consolidate all higher interest rate loans into your home loan

3. Invest on a regular basis
If you have paid off your home loan, start a savings pool to fund your maternity leave and child’s future. A pool of wealth will give you more choices in life and greater security.
4.

Review your private health cover
You need to decide whether to have the baby delivered in a public or private hospital. If you choose to go to a public hospital, Medicare covers the majority of the costs you will incur.

However, if you choose to go to a private hospital, you should take out private health insurance well in advance (in most cases 12 months in advance) or you may end up spending thousands of dollars.

Even if you do have private health insurance in place, you need to ensure your cover is adequate and you should find out what your costs may be so you are prepared for any gap.

B. Pregnancy

With a baby on the way, time is running out to get organised!

1. Get used to a single income
The transition from two incomes to one will be much less difficult if you're prepared. Practice living on a single income and cut out those little extras you won't be able to afford on a single pay cheque.
2. Review your insurance
Make sure your child will be well looked after should anything unfortunate happen to you and/or your partner. Review your Life/TPD, Income Protection and Trauma insurance.
3. Review your will
Most Australians don't have a will, however with children, a current will is essential. Make sure both you and your partner's wills are up-to-date to reflect the needs of your growing family.

C. Post-pregnancy

Now the baby has arrived…

1. Claim applicable Government benefits
2. Check whether you are eligible for:
Family Tax Benefit Part A
Family Tax Benefit Part B
Parenting payment
Maternity allowance
Maternity immunisation allowance
Child-care benefit
To check whether you are eligible for these payments you visit the Centrelink website or contact your Count Adviser who can help you assess your eligibility.
3.

Plan your career
Some full time carers decide not to work because their hourly rate of pay after tax and child care costs is too little to work for.

Whilst this is perfectly understandable, be careful you don’t make a short-term decision that has a lasting and long-term effect on the rest of your career.

An extended absence from your employment, skills and training could severely limit your career options. If possible maintain some kind of part-time work or take the opportunity to upgrade your skills through training and education.
4. Start a regular investing program
Start a savings fund for your child's future.
Make sure you have room in your budget to accommodate extra comforts such as family holidays. Use our budget planner to work out how much additional money you can afford to put aside for these extra comforts.