Starting a family is often filled with joy and anticipation for what the future holds, but not enough women are thinking about how to continue to build their superannuation whilst having time off work to raise their family.
Having a child for the first, or third time involves navigating conversations with your boss about parental leave, deciding which hospital to have the baby, buying the right type of pram or extending the family home.
Yet, often the discussions about how your family’s finances will be managed are left to the last minute, or not had at all, according to Sarah Conte, Senior Manager at BT Advice.
“We know that women retire on about half (47%) of the amount that men retire on, and yet we live longer. Starting or growing a family is such a wonderful time of life, however in the long term, women – who are often the primary caregiver – miss out because they have a smaller nest egg at the end of their working life, says Sarah Conte.
“I’d recommend having a conversation with your partner about how you will manage your finances if you were to become parents – how you will continue to pay your mortgage or rent, who will pay for bills and how will you save for a holiday. You can also do things to prepare you for this next phase in your life, like living on one salary.
“The most important thing you can do is to work out what compromises you can make - instead of getting a facial why not just get a pedicure that costs less and also makes you feel great, and will also allow you to put away a little bit into your super each week. Saving something is better than nothing. If you take just five years out of the work force, or return part-time you could retire on $100,000 less super,” she adds.
Some organisations offer paid paternity leave, whilst other leading financial institutions may recognise your return to work income. Last week Westpac Group announced that it would make it easier for many expectant and new parents to refinance, renovate or purchase a home by taking into account paid parental leave and return to work income.
Bernadette Inglis, Group General Manager for Westpac Retail & Premium suggests that this change will mean that over 700,000 Australian families with a young child (aged between 0-2) may now be able to move into a bigger home or extend their existing one for their growing family.
“As a working mother, I understand the issues facing new parents. I’m thrilled that we are now able to open up the doors for many young families who may not have been able to access the finance they need.
“I’m proud that we can help more families and women by supporting them, their communities and financial goals,” comments Bernadette.
Tips and advice from Sarah Conte at BT:
Continually look at ways to build your super – it will be about making compromises on small things today, like changing your cleaner from weekly to fortnightly, or new clothing, which will be positive for your future and the lifestyle you will have once you retire. The interest that builds up over the time of your working life can have a significant impact.
Chat to your spouse about making a contribution into your super – they may receive a tax concession.
You can also chat to your spouse about taking parental leave so that you can go back to work sooner, or more days per week.
As soon as you start talking about creating a family, start to save and pay down any debts like credit cards so that you’re in a good financial position when the baby arrives.
If you are saving to buy a home, or renovate your existing one, sit down and work out how much you can still put into your super and pay off your loans.