Preparing for the arrival of your first child is an exciting time – and there’s plenty you have do to make sure you’re ready!
As well as choosing a baby name, decorating a room and getting their mini wardrobe sorted, your financial situation also becomes a focal point of the next nine months.
Preparing for the arrival of a baby can be a costly exercise, but with the right attention to finances and some creativity you should have no trouble saving for a baby.
How much do you need?
Middle-income families are reportedly now spending up to $458 a week to raise a child, according to a report from AMP and the National Centre for Social and Economic Modelling. The cost has skyrocketed in the past five years across all income groups, meaning we are spending more on our little mites. Copping the biggest increase in costs, middle-income families are now spending 50 per cent more than just five years ago. Related: Raising kids doesn’t have to cost $1m
Am I entitled to government support?
To help ease the financial strain that the arrival of your new little nugget will impose, the Department of Human Services has announced that from March 1st 2014, new parents are entitled to receive $2000 for the birth or adoption of a first child (and each child in multiple births) and $1000 for any subsequent children.
Babies and interest
In some cases, a baby’s announcement into the world is a surprise, but if you’re planning for a baby then make sure you use your head start to get saving. Use your time wisely and begin your saving as early on as possible. Aim to start with just $1000 then ramp up your savings plan and put the $458 children are estimated to cost weekly into an account returning up to 4.5 per cent per annum.
Find a savings account that will reward your efforts
Boost your savings efforts with a high interest savings account that increases your interest rate when you meet your goals. For example, the RaboDirect saver account offers 4.76% p.a. which is calculated daily and paid month, with absolutely no fees. Compare with these Top 10 high interest savings accounts
They say that you will never need your friends and family more than when you’re having a baby. You might also find their gifts become invaluable to you, with loved ones often forking out for expensive prams, cots, car seats and more. To avoid feeling embarrassed or cheeky for asking, consider creating a baby gift registry at a leading department store like David Jones. There you can list everything that you need in order to care for your baby, and you’re able to select the styles and brands that you prefer to avoid any awkward gift opening moments.
For every new parent chasing the latest pram or baby gadget, there’s another that is looking to get some cash back on items their child has outgrown. Searching eBay, Gumtree and baby forums can pay off quickly, and you’ll often come away with nearly new and unused items.
Once a baby arrives, the costs are set to increase. You have to feed, change, clean and clothe them. If you are deciding whether to breastfeed or formula feed your newborn, then take into consideration the expenses. The costs of formula feeding will only increase as your little one grows and starts drinking more. Also, consider bulk buying your nappies, wipes and baby lotions as they will generally be cheaper than buying individual packs.
You might not be thinking about schooling just yet, but according to ASIC, sending one child to a private high school will set you back an average of $20,000 a year. Therefore, it’s definitely worth putting some money aside each month to ensure you’re not left disappointed when it’s time to choose a school. Related: How to teach kids good money habits and fiscal responsibility
Focus on your savings plan while preparing for the arrival of baby and you’ll be able to sit back and enjoy your time as a new parent, knowing you can give your bundle of joy everything they need.
Written by Hannah Collins, Yahoo!7 Moneyhound – Fetching you a better deal. Moneyhound.com.au is a price comparison site that can help you save money across all your monthly bills. Try it now, it’s free.
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