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Financial Plans to Prepare for a Baby

Financial Plans to Prepare for a Baby

Planning for a baby financially is imperative for soon-to-be parents. The cost of having a baby in Australia on average is $144 a week, according to a NATSEM research.

As an expectant parent, you want to be financially prepared for your newborn child. So to help you prepare, we’ve put together a pregnancy to-do-list that you can add to your family savings plan.

1. Clear out debts

Having a new baby and too much debt can get financially overwhelming. Repaying multiple debts and taking care of the baby expenses can get the way of your financial goals. Lessen the heavy load of your debts by avoiding creating new ones and continue to repay your existing ones like your mortgage and car loans.

2. Factor in baby expenses

Baby nappies, nappy bag, clothes, stroller, high chair, food, and child care are just some of the common baby expenses. Have you factored these into your budget? These things can get expensive. Why not borrow baby clothes from a friend, or buy second-hand baby furniture from yard sales or online to save money?

Also, make sure that you know the coverage and limitations of your health insurance. Does it cover doctor and hospital bills for you and your baby, medical tests, or scans? Get to know the coverage in order to avoid unexpected out-of-pocket expenses.

3. Create a new budget

Do you already have a good idea how much you spend every month? Your monthly budget will be different once the baby arrives. You will need to make some adjustments in coming months, so plan your new budget now.

4. Build up your emergency fund

Be more secure by building up an emergency fund that can cover three to six months of living expenses. This way your family will be confident you can get through any problems that may occur in your life. To know how much money you need for an emergency fund, just multiple 3 or 6 (months) by your average monthly expenses.

5. Know your rights and benefits

Companies may have their own maternity and paternity leave policies. Ask your employers if you qualify for paid maternity leave, and how long your paid maternity leave will last. Get to know the policies so you can better plan your leave and also your partners.

Having a baby is an exciting experience but it can get overwhelming especially if you didn’t plan for it financially. Make sure to follow these tips to lessen any financial stress that may happen in the future.

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