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Budgeting for a Baby


Expecting a baby is one of the most exciting times in anyone’s life. But it also means major financial changes as usually, the mother will spend considerable time away from the workforce. So to make sure you’re fully prepared financially when you have a child, here are some things you need to think about. girl pig boy pig

Lisa Kirk is a financial planner with Westpac. She’s also expecting her first child, so she knows only too well the planning that needs to happen before a baby is born.

Lisa says when you’re preparing a budget in the lead up to having a baby, start by applying standard budgeting principles: assess how much money is coming in as well as how much will need to go out.

“There will be an amount of time when you won’t have income, but there are also government benefits to take into account and some employers also have generous maternity and paternity benefits,” she explains.


Ok, so first let’s take a look at the income a family can potentially receive when baby arrives. The first port of call should be the Centrelink website.

“It can be daunting if you’ve never had any experience with Centrelink, but there is a payment finder on the web site that indicates which benefits you may be entitled to,” Lisa says.

Benefits include the Paid Parental Leave Scheme, through which some people are entitled to 18 weeks’ paid leave when they have a child. Other subsidies include Dad and Partner Pay, which can fund up to two weeks’ paid leave for the mother’s partner. Further down the track, some families are also eligible for the Childcare Rebate, which can cover up to 50 per cent of childcare costs.

There are also a number of other benefits available to parents and it’s worth checking these out on the Centrelink website.


When it comes to the costs you need to take into account when raising a child, first work out the ante-natal expenses you will need to pay, taking into account  whether you are going to have the child in the public or private system. Then, think about the one-off costs you will incur, including buying a pram, car seat, cot and clothes.

‘There’s really no limit on how much you can spend, but roughly $2,000 is a good basic guide,” advises Lisa, who says it’s also an idea to think about what you might be able to borrow or buy second hand to keep costs down.

Factor in your ongoing fixed costs, including food, rent and utilities bills as well as your variable costs such as entertainment.

After that, says Lisa, look at the expenses associated with actually having a baby, including whether you wish to breast feed your baby or use formula and whether you will buy cloth or disposable nappies.

Future expenses

Once you have a handle on your initial costs, it’s worth considering the future expenses of raising a child such as school fees.

“If you intend to educate your child privately, some schools charge more than $20,000 a year in fees. So it might be worth starting to put away money now and accelerate how much you save once you’re back at work,” says Lisa.

According to Lisa, when it comes to saving for a baby, as a minimum it’s an idea to set aside the amount you’ll need to cover the cost of your rent or mortgage while you’re not at work.

“Also avoid using short-term debt such as credit cards and personal loans to pay for your baby. Above all, prioritise your expenses and be realistic about what you can and can’t afford.”

Finally, says Lisa, review your personal insurances so that the family is protected no matter what happens.