Becoming a parent is a significant life event.  One which will change you forever.  Being prepared financially as you welcome a new human into your family will put you in good stead for the adventure ahead, reducing financial stress and enabling you to soak up the many magical moments which pass too quickly. 

Most new parents will agree, no matter how many siblings, nieces, nephews or friends’ kids you’ve been exposed to, nothing can prepare you for the real thing. The real thing (i.e. becoming a parent) is a whirlwind of emotions, exhaustion and pure unconditional love. The real thing takes you to your edge, stretches you and opens you up.  The real thing is a full time job, one you never clock off from, and will likely be one of the most rewarding roles of your life. 

But while it’s hard to prepare yourself emotionally for the ride ahead, you can prepare for some of the more predictable changes.  In particular, juggling finances to accommodate another human being and, for a time anyway, one less income.

Many parents choose to return to work as soon as possible in order to continue to contribute to the cost of bringing up a family and pay off a mortgage.  Some families find ways to balance their budgets and reduce their spending to enable one parent to stay at home full time for a while, while other families mix it up with some full time and part time work in amongst some hands on at home care.  Each family’s financial situation and lifestyle choice is unique, and together as a unit you need to decide what is best for your situation.

Here are some tips to stay on track financially as new parents:

  • Having a financial strategy before falling pregnant is ideal. Work out a budget for before, during and after pregnancy as well as setting up a 5 or 10 year financial plan.
  • Budget living off just one income for 12 months and see if you can afford it, if not, how much will you need to stay afloat? Start saving now!
  • There are a range of Government assisted benefits and payments for new families and parents. Investigate if you are eligible for Paid Parental Leave or Dad and Partner Pay which are payments from the Government to help for the first few of months of your child’s life.  It is a great incentive to stay at home with bub for the first few months.  Other benefits worth exploring include the Newborn Upfront Payment and supporting Newborn Supplement as well as the Family Tax Benefit Part A which is dependent on income.
  • Find out the maternity leave options of your workplace. Will there be a job for you if you take 12 months off? Some workplaces will top up your Paid Parental Leave with additional payments for a few weeks or months depending on your workplace agreement.
  • Speak to your accountant about having your partner contribute to your superannuation while you are on leave. It’s a great way to keep your super growing while out of the workforce and may result in tax benefits. 
  • As you feather your nest for the arrival of your little one, consider borrowing or buying some high quality excellent condition baby items second hand rather than purchasing every single thing brand new. Anything you do buy, keep good care of it, store it well and it may come in handy for passing on to others, selling or reusing for your next child. Hiring things like a baby capsule and a bassinet can also keep costs down, leaving you more money to invest in a good quality cot and car seat to last several years. 
  • Returning to full or part time work once your child is old enough will help top up your savings and super. Some mums return to work when their child is a few months old, others wait until their kids start school. Every family will have its own priorities and financial situation to consider. 
  • Day Care isn't cheap, but Government rebates are available for those who are eligible. While there might not always be a lot of change left out of a full day’s wage after paying for daycare, by returning to work earlier you allow for promotion, super growth and career development in years to come. 
  • Consider casual work on weekends or evenings, or starting up a home business if you are keen to maximise time at home with the little one. 
  • Family support is a huge benefit for new mums. If Grandma can take care of bub for a day or two each week, you save on childcare and know a great bond is developing within the family too. 
  • Make sure you update your wills once bub arrives to include an agreed guardian for your child.

Like any new experience, it takes time to adjust, and there’s plenty to learn along the way.  But with some preparation and research, you can build a solid financial foundation for your family, giving you the freedom to enjoy the ride ahead.  For more great tips on preparing financially for a family visit Money Smart


Alison Gallagher is a Mother, freelance writer, resourcefulness expert and entrepreneur.  She has been featured in various publications including Stellar Magazine, Australian Health and Fitness Magazine, and Cleo Magazine. Alison is particularly passionate about sharing practical tips on how to live simply, sustainably and seasonally.  

27 April 2023