Greeting a new family member is exciting, but with so many aspects of your life changing, when it comes to your finances, planning ahead can make the transition so much easier.
It’s easy to get caught up in the excitement for your new arrival. When making preparations, it’s important to have all of Bub’s needs ready; but is equally vital for Mum and Dad to be financially organised.
Before you start your family, it’s wise to review your financial situation. For example, create a “baby-budget” by listing all household income and expenses under three columns: before pregnancy; during pregnancy; and after pregnancy. This will allow you to see and compare your financial position at the different stages you’re going to experience.
If you have difficulty keeping track of incidental spending, you’re not alone – many people can’t account for where their money goes. To help, the Enrizen Wealth Portal has some handy features to help you budget and get full transparency of your financial world across all your accounts. We suggest using the app for 2-4 weeks before completing your baby budget. We’ve found that people are often surprised by where their money flows.
Determine your entitlements
As at least one parent will require time off work, and accordingly the potential reduction to household income can be stressful. It’s important to understand your parental support entitlements upfront.
The federal government offers eligible parents up to 18 weeks Parental Leave Pay. Centrelink provides Paid Parental Leave information here: https://www.humanservices.gov.au/individuals/services/centrelink/parental-leave-pay/payment-rates. This will estimate your entitlement and enable you to determine the best option for your family.
If you decide to return to work after Bub arrives, you may qualify for government assistance, considering the cost of childcare. The Department of Human Services provides information about your eligibility. Again, visit www.humanservices.gov.au.
Planning more, stress less
People often have a savings strategy for key life events, like buying a home or retirement. Having a baby is more than a key event – it is life-changing – yet few people consider saving for it.
Your Enrizen financial adviser can assist you in creating a practical household budget and setting up a savings plan that will help cover large or unexpected costs. At this time, it is also important to consider life insurance and income protection to protect your family’s future.
Planning ahead will provide peace of mind and place you in the best possible position to welcome the newest member of your family.
When your bub has arrived, the planning continues. Our Private Client Group can help with your now out-of-date estate planning documents and help you come to terms with future expenses such as private school fees.