The arrival of a new baby is one of life’s precious gifts, a great milestone to be celebrated, however, with the arrival of tiny feet marks the time when most families are also caught off-guard with the ever-growing costs associated with the new arrival.

So start planning a rich future by getting your finances off to a great start.

1. Baby Proof Your Costs

Now that you have announced your new arrival to friends and family, remember the big ticket items a new family member will require so you can plan ahead. Will you need a safer or bigger car? Do you have space in your home for a nursery? Will you be able to afford that high-end crib, that high-end pram, stroller, car seat? Would you consider having some of these items handed down to you from a family member? Consider where you can splurge, where you can reuse an existing item from a family or friend or if you can make do.

2. Budget New Expenses

Your new bundle of joy is a new mouth to feed , however, are you ready for all the little costs that quickly add up? Budget for extra spending on items such as:-

  • nappies, baby wipes and ointments
  • bottles and formula
  • clothing
  • regular doctor visits including medicines
3. Review Health Insurance

Now that your little one has arrived, it’s important to review our current health insurance policy and benefits to ensure that it meets the needs of your new family.

4. Child Care Options

It may seem a little early, however, you will need to consider all your options in relation to the care of your child as these costs can put a dent in the family budget.Your options may include:-

  • a spouse/partner at home
  • help from a family member
  • daycare
  • nanny or share nanny

Whatever you decide, these costs can be significant so the earlier you start planning and budgeting for these costs , the better for all involved.

5. Parental Leave

Be sure to check in with your employer’s benefits to understand how much paid, part-paid and unpaid parental leave you are entitled to. You should also budget for any lost income, and if possible, ramp up savings ahead of time. Schedule a monthly/fortnightly/weekly deduction from your pay into a savings account will help create a buffer for you when you are at home without pay.

6. Check Your Eligibility for Benefits

Discuss your current situation with your financial adviser or accountant about what benefits or programs designed to offsets the costs of a growing family that you may be eligible for.

7. Be Credit Card Debt Free

Before the arrival of your baby, it is a good idea to pay off any credit card debt so you can start your new life as a parent with no credit card debt. That way if a real emergency occurs, you will be better prepared to handle an additional financial emergency.

8. Update Your Family Documents including Wills & Life Insurance

Obviously a new arrival needs to be provided for so a review of all your life insurance policies, wills and retirements plans are crucial.

9. Revise Your Long Term Savings

You will now need to think long-term to prepare for costs in the future – will you need a bigger home as you expand your family? Do you plan for your child or children to go to private schools, university etc? You will need to review your savings and adjust your savings goals.

10. Spend Time & Enjoy What You Have

One of the common themes you hear that is the kids grow up too quickly so take the time to really enjoy the time with your new arrival. Spend time and enjoy every day by doing things together. It could be as simple as preparing a meal together, having dinner as a family regularly, spending time outdoors at the park, beach, mountains – whatever you and your family love doing together.

 

About the author

This article was written by Andrew Tynan, Financial Adviser at Tynan Financial Planners.