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Ruby's Real Money Diaries: Having a baby
23 June 2021
There are over 300,000 babies born in Australia every year – and starting a family can be costly. So it’s essential to budget for everything from the birth, to setting up the nursery, right through to your return to work. In this Money Diary, we chat to Alana and Tim, a young couple who found their spending habits shifted quite a bit with the arrival of their bundle of joy. Here’s a bit more about how they handled the financial side of starting a family.
About Alana and Tim
Age: Early 30s
Occupation: Alana’s a teacher’s aide and Tim’s a crane operator
HECS / HELP debt? No
Any other debt? A home loan
Do you have any savings? Yes
Are you actively saving? Yes
RUBY: Thanks for talking to us about your financial habits, Alana and Tim. What are you both good at when it comes to managing your money?
We’re both actually pretty good savers, and we do have a budget which we both follow. Our existing budget helps us stay on top of our savings, spending and our usual bills.
RUBY: What did you wish you knew earlier about your finances? Looking back, is there something you would do differently?
I’m glad we bought a home when we did, but looking back, I wish we’d gotten into the property market earlier. That’s something I always tell people – don’t delay, just get your foot on the ladder and you can build from there.
RUBY: How did you decide on the care you wanted when you got pregnant, and did that affect your finances?
This was one of the biggest decisions we had as a couple – whether we would go private or public for the birth. It played heavily on our minds, as well as if we would be self-funded or take out health insurance for the delivery and the hospital stay. We ended up going to a private hospital with no health insurance – this was very costly, but we don’t regret the decision we made for a second.
RUBY: Did you have to buy any big-ticket items to prepare for your new bundle of joy?
Yes. Apart from using a large portion of our savings for obstetrician fees and all the gear you need to buy for the nursery and our baby, we also ended up getting a new car. But this was an essential purchase as we needed the right car and one that could safely accommodate a baby seat. It was something we’d taken into account and factored into our budget, though, before we decided to start a family, which I think is really important to do – or you can be blindsided by all the costs that crop up.
RUBY: It’s true that kids can be expensive! What have you had to factor into your budget since you brought your baby home?
Along with everyday expenses like grocery shopping and petrol, we’ve also had to factor in things like baby formula, baby clothes, nappies (so many nappies) and often medical appointments too. Babies do put a dent in your budget, so my advice would be to cost out everything you’ll need and look at where you can cut back. Flying by the seat of your pants financially would be just too stressful. Also look at where you can pick up things second hand, that can be a great way to save.
RUBY: What about your own personal spending habits – have they changed at all since you became parents?
Absolutely. We don’t really go out anymore, so I’m not really spending money on clothes and shoes like I used to – a good thing, I guess, to save on those things for a while. We are seeing more of our money going towards baby stuff, which is to be expected – and I think as our baby gets older and we need to factor in things like childcare or school fees, we’ll just keep tweaking our budget as we go.
You might also like to get an idea about the Davidson Institute’s new course Financial Fitness For New Parents.