Raising kids comes with both personal and financial responsibilities.
For those entering the world of parenthood, “Having a baby is a life-changer. It gives you a whole other perspective on why you wake up every day.” (Taylor Hanson)
Below is a useful checklist to help get your financial affairs in order when expecting a new arrival, as well as a few other useful tips.
Have you set up the nursery? It can cost quite a bit to buy all the items for a nursery, so if money is tight, don’t be afraid to ask around.
Remember a cot is only used for a short period of time and babies clothes also get handed around regularly if you ask. If you are willing, it can also pay to look at online stores such as eBay.
Income: Will you continue to work? If not, you may need to consider the impact of a reduction in household income.
Expenses: A baby will create new expenses that you didn’t previously have. Some will be expected and can be estimated such as the cost of nappies. Other expenses are more difficult to predict such as medical expenses.
Use the Budget Planner Calculator to estimate your new cashflow position.
3. Financial Assistance
Many parents are entitled to financial assistance either through the Government or their employer.
The way financial assistance is provided is varied depending on individual circumstances. Examples include Parenting Payments, Child Care Rebates, Baby Bonuses and Maternity Leave.
Please click here for more information on Financial Assistance for Parents.
For most people, a new baby brings an extra sense of responsibility. While you and/or your partner are able to work and produce income for the house, then hopefully you feel like you are meeting your responsibilities as a parent.
However, should there be illness, accident or death (yes, horrible thought) then it may be difficult to meet your financial desires to your family. This risk can be managed through insurance.
Life Insurance – Provides payment to the owner of the policy upon the death of the insured person. The payment is typically, but not always, a lump sum. Learn more about Life insurance.
Total and Permanent Disablement – Provides payment to the owner of the policy upon serious disablement of the insured person. Like Life insurance, the payment is typically, but not always, a lump sum. Learn more about TPD insurance.
Income Protection Insurance – Provides a regular income payment to the owner of the policy when unable to work. The payment is typically paid monthly for a specified period of time after satisfying a waiting period. Learn more about Income Protection insurance.
Trauma Insurance – Provides payment to the owner of the policy upon the suffering of a major health trauma. The payment is typically a lump sum. Learn more about Trauma insurance.
5. Wills and Estates
When you have a baby, your Will may or may not make provision for them.
A clear and well documented Will is worth its weight in gold when it comes to distributing assets.
It reduces family conflict and it can literally save your family hundreds or thousands of dollars in taxation.
If you think you don’t have enough money to justify looking into professional advice on Will preparation, you are probably under insured.
Check out this Will Checklist and get advice from a duly qualified and experienced professional.
6. Look after yourself
The above list may seem long and difficult. We suggest you just take one item at a time and don’t try to do everything at once. A little bit regularly will have you all organised before you know it.
In saying that, many new parents are overwhelmed with their new sense of responsibility. Add to that the lack of sleep, the lack of personal time, and the other demands of parenthood, there is little wonder that post-natal depression is a regular experience in our community.
So the last point, which arguably could be the first point, is to look after yourself.
If you feel like parenthood is sending you crazy, you’re not alone. Ask for help or contact a support service such as beyondblue.
If you feel like you need a break, talk to your spouse, parent or friend and see if they can come over for a coffee while you go for a walk or similar.