Preparing for your future with baby


Securing your family’s financial security is as easy as one trimester, two trimesters, three…

Deciding to have a baby is a life-defining moment filled with hope and excitement. Pregnancy however, is a nine-month flood of questions, responsibilities, decisions and appointments. In the whirlwind of scans, baby showers, and name choosing, it’s important to make time before the due date for your growing family’s financial plan.

First trimester: do your homework!

Leave and entitlements

If you’re working, it is important to understand your paid and unpaid leave entitlements as well as your rights at work during and after pregnancy. Paid and unpaid parental, maternity and paternity leave may be available to you and your partner,1 from both the Government and your employer.

Under the National Employment Standards, employees have the right to take unpaid parental leave after their baby’s birth or adoption. If you’ve worked with an employer continuously for 12 months you can take up to 12 months off. You can also request another 12 months leave, although this request has conditions. You also have the right to return to the same position as when you left for parental leave, or if that position does not exist, to be placed in an available position nearest in status and pay for which you are suitably qualified.2

The Australian Government’s Paid Parental Leave Scheme provides 18 weeks of Government-funded Parental Leave Pay at the National Minimum Wage. Among other requirements, you must have worked 10 of the 13 months before the expected birth or adoption date. There are options for when and how the pay is received.2, 3 There is also a time limit on when you can claim Parental Leave Pay. To receive the maximum 18 weeks of Parental Leave Pay, a claim will need to be made within 34 weeks of your child’s birth or adoption.4

Partners need not feel left out when it comes to Government financial help. Dad and Partner Pay was introduced in 2013. Eligible applicants can receive up to two weeks of Government-funded leave pay at the National Minimum Wage. Again, claims for Dad and Partner pay must be submitted in the first year after the child’s birth or adoption.5

Some employers also offer employer-funded paid parental leave. If you are covered by such an agreement, contract or policy, it does not affect you receiving the Australian Government’s Paid Parental Leave Scheme.2

Parents of a child of school age or younger also have the right to request that their employer provide flexible working arrangements. Employers can refuse the request on reasonable business grounds.

The Fair Work Ombudsman outlines a pregnant employee’s entitlements in the workplace, including pregnancy-related illness sick leave, unpaid special maternity leave, safe jobs and protection from discrimination.

Though you may wait to share your news with employers and colleagues, indicative tools such as the Parental Leave Calculator and Parental Leave & Entitlements fact sheet may be helpful.6 You can review options for government benefits and eligibility criteria via the Department of Human Services website.

What’s it all going to cost?

In 2015 financial coach Manuela Andrysik put the burden figure of having a child at $43,000 (accounting for an estimated loss of income at $30,000) from conception to their first birthday.7

Depending on whether you decide to go down the public or private medical route, the relevant fees will need to be factored into your budget.8, 9 There are advantages and disadvantages to consider for both public and private medical care during your pregnancy and birth. However, be aware that just because you have private health insurance it does not mean all your expenses will be covered.

Then there’s the space issue. While newborns don’t take up much space and in most cases sleep in the same room as their parents, if you’re in a small apartment you may want to consider moving somewhere bigger or with more bedrooms. You may, for example, be able to just cope in a studio apartment with a newborn, but as the months go by it could become increasingly difficult. If relocating is on the cards for you, it’s an expense you should consider as part of your budget.

Every parent is different. Whether you would prefer to stay home to look after the kids or crave a return to work, the decision may be determined by the necessity to pay the mortgage and more. Either way there is a cost to bear. If you stay home and don’t go back to work, you’ll have a reduced income. If you do go back to work, there’ll be the cost of child care.

The State of Victoria outlines typical child care costs by type:10

  • Centre-based child care – $80 to $120 per day
  • Family day care – $6 to $10 per hour
  • Nannies – $20 to $30 per hour
  • Au pairs (living in your home with board)11 – From $200 per week

Formal child care was used by 69.1% of children not yet at school according to the Household, Income and Labour Dynamics in Australia (HILDA) Survey release in 2015.12 In the report, respondents could choose all the types of childcare they used: 39.3% used private or community long day care, 7.3% used long day care at their workplace, 15.9% used family day care and 15.0% used kindergarten or pre-school.

If you are planning a return to work and are thinking about centre-based child care, consider putting your child on one or more waiting lists at your preferred centres early, as there is a high demand for places.13 Regional and rural placements particularly may fill quickly.14 The Australian Government has guidelines for child care centres to apply when allocating places.

The Australian Government also provides help for eligible parents with the costs of child care in the form of a Child Care Benefit (CCB) and a Child Care Rebate (CCR).

Don’t forget all the other costs too. There are big ticket items like a cot, car seat and pram, as well as the day-to-day essentials such as nappies and wipes. It’s surprising how quickly it all adds up!

Second Trimester: Decisions

You’re now in the second trimester and you’ve shared your pregnancy news. You’ve also done your research and now know more about having a baby than you ever thought you’d know, and possibly more than you ever thought you would want to know.

Now it’s crunch time. The decisions you make now go a long way to setting your course for the next two years. Will you both return to work, or will one family member become the principal earner? Will the primary caregiver return to work in a part-time capacity? If you both return to work, who’s going to look after the new family member? Where are you going to live and what are you going to buy? They’re big questions with big implications, and the answers are not necessarily straightforward.

If you’ve done your research and talked it through, you’ll be in a good place to make decisions.

With all the above in mind, you can prepare a family budget.4 You may find you need to sell items or delay large purchases, or change the way you manage your day-to-day spending.4 Try preparing a budget that covers the first two years of the baby’s life.

One fact that should come to your attention now is the ‘What if?’ What if something happens to you, your partner or indeed both of you? Who would look after your child, and what financial resources would be available?

To legally protect your child, you can find a close friend or family member who is suitable and willing to be their legal guardian, and name them in your will. Life Insurance covers death and total permanent disability: it can help provide for your child’s financial future if something happens to you. Professional advice is available in both of these areas.

There is no doubt that these are difficult topics to consider, but with the responsibility of parenthood they are important decisions to make.

Third trimester: Get ready!

Mothers-to-be are entitled to maternity leave six weeks out from their due date, or earlier if negotiated with the employer. Working within the six week window is possible and common: 37% of pregnant Australian women in November 2011 worked within a week of giving birth.15 However, if you want to work in the six weeks before the due date your employer may ask for a medical certificate to confirm it is safe for you to do so.16

If you’ve done all your planning, then the last trimester is about staying fit and healthy, having your baby shower, shopping for essentials, and packing your hospital bag.

Posted: 17 Aug 2016


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