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7 tips to help you budget for a new baby

How to plan for a baby Did you know you’ll probably spend about $1800 on nappies in your baby’s first year?

And books and toys for your toddler will probably set you back $1000.

Then they’ll need school supplies and swimming lessons … another $1300 a year.

And it really gets scary when they’re a teenager. Clothes alone might cost up to $1000 a year!

If you think about it too much, it could quickly become overwhelming. And the last thing you need when you’re expecting a child is to feel overwhelmed.

So put your feet up, take a deep breath and consider this …

Having a baby is an amazing, life-altering event. But it is also a financial commitment – the cutest kind of financial commitment there is, of course. The key is to plan carefully, be prepared and to set yourself up now so you don’t have to stress about what the future holds.

To do this you’ll need three things – good advice, practical tools and financial services you can rely on. Here’s some tips on how to get all three …

7 tips to help you budget for a new baby

1. Plan your parental leave

The first thing you will need to consider is how much time you will take off work to care for your baby and how you will fund that time off. Australian workers are entitled to take at least 12 months off work to care for a new baby as long as they’ve worked for their employer for 12 months. But this leave is often unpaid. Check with your employer to see if there is a paid maternity leave scheme where you work and check your eligibility for the government’s Parental Leave Pay.

2. Check if you’re eligible for any government assistance

There is also a number of other government payments to help with the cost of raising a family. If you’re not eligible for Parental Leave Pay you may be eligible for the Newborn Supplement and Upfront Payment. Also check out your eligibility for Family Tax Benefits A and B.

3. Do your research into how much babies cost

There are a few ‘set up’ costs associated with having a baby as well as ongoing costs such as nappies, wipes and clothes. You’ll be happy to know that newborn babies don’t need much initially (just clothes, nappies and a safe place to sleep) and there are only a few essential baby items you need to buy before baby is born. Make sure you have a reasonable idea on what you will need and how much it will cost. Do some research into the price of everyday items, such as nappies and wipes, as well as one-off purchases such as cots and prams. Ask family and friends for advice and product recommendations.

4. Figure out how you will survive on less money

Once you’ve determined how much money you’ll have coming in after the birth of your baby you can start to create a budget and figure out how you’ll manage your everyday finances. Create a realistic list of ALL your expenses (including the everyday expenses that a baby will incur) and add them up. If they add up to more than your income, you’ll have to make cuts. Small changes, such as making lunches instead of buying them or cancelling pay TV subscriptions, will add up and have a big impact on your budget. Also consider asking your bank if they can pause home loan repayments for a few months – so you can spend time with your newborn without having to worry about those large financial commitments.

5. Set up a realistic budget for your baby items

Once you know how much your budget will allow and how much all those baby items cost you can set aside a reasonable amount that you’re willing to spend getting ready for your baby. There’s a wide range of products out there to buy and there’s a huge difference in cost, not all of it reflected in quality. You can spend $200 on a pram or $2000. Once you have a budget make sure you stick to it – there are plenty of ways to save if money is tight.

6. Set up a bank account for your child’s future expenses

Once your new baby has arrived consider setting up a bank account and transferring small amounts each week or pay period. You won’t miss those small amounts but they’ll add up over the years. For example, if you put $10 a week into an account you’ll have almost $10,000 in 18 years. And that is not even counting the interest you would acrue. Use this money to help pay for your child’s education or a car when they get their licence. Look for a bank account that has no monthly fees, free online transactions and a generous interest rate so your savings will grow over time.

7. Find a financial service you can trust to support your family as it grows

Having a new baby is just the first step – there are many more life changes to come as your child grows and it is important that you’re supported through each transition along the way. Look for a financial service that is flexible and approachable, one that has competitive rates and lower fees, one that will help guide you no matter what life stage you’re at.


This blog post is sponsored by CUA – Credit Union Australia

You’ll find everything you need and more to help make your life stage, life rich at

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