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Saving for a baby

Expecting a new arrival or thinking about starting a family? It’s an exciting time, but it can be an expensive one too, so working out how much you will need then creating a budget as early as possible will get you off to a good start and help you prepare for the expenses that are yet to come.

It’s estimated that you can expect to spend more than $10,000 on your child’s first year. Here’s a rough breakdown of the up-front costs:

  • Nursery setup: For a cot with a mattress, you’ll spend anywhere between $160 and $750, depending on the brand. A luxury cot, if that’s what you are after, may cost you up to $3,000. Changing table ranges between $90 and $650 and baby chairs can set you back $90-$500.
  • A car seat is a must-have. It’s recommended to buy new to ensure safety, expect to spend $90 - $450.
  • Stroller. You need a durable all-around system that may start at $100 and go up to $1,000.
  • Nappies. You will spend at least $600 on nappies during your baby’s first year. Cloth nappies are big savers, but ensure you factor in washing costs and effort.
  • Food and formula. However you choose to feed your baby, there are a number of costs involved. When thinking about buying pumps, bottles and formula, ensure you shop around (or buy in bulk) to get the best price.
  • Childcare. The cost of childcare has increased dramatically over the past decade. Learn more about government benefits available, but it's wise to budget for some out of pocket costs. 
  • Clothes. Babies grow fast and those adorable outfits add up. Friends and family will most likely populate your nursery with gifts and you can fill some of the gaps with garage sale buys or by joining groups on social media where mothers are selling barely used items or just giving things away for free.

The paid maternity and paternity leave provides eligible working parents with 18 weeks Parental Leave Pay at the National Minimum Wage, and can be shared between both parents. The scheme now includes a two-week payment for working dads or partners. If you are planning your pregnancy and would like to be eligible for Paid Parental Leave, check that you meet the income, residency and work test criteria well in advance.

Going back to work or staying at home is something you need to consider early. Will your employer allow you to work from home, or can your family help to take care of the baby while you’re at work? Commuting, business clothes, dry cleaning, lunches and coffees come at a price. And there are potential savings there too.

Baby-proof your budget

Your life will change with the baby’s arrival, but your lifestyle doesn’t have to. So once you have a rough idea of how much you will need, spend some time planning your finances:

  • Start by reviewing your mortgage, credit cards, insurance, utility bills and spending. Total your income and expenses. The money remaining after expenses should be allocated to your savings. A Savings Specialist can help you do this with a free financial healthcheck. Speak to your local branch to arrange one.
  • Open a savings account and get into habit of regularly transferring to your savings so you can start to build-up your baby fund. It will save you time, plus help you get used to your new ‘post baby’ income and get you on track to reach your savings goal.
  • Once the baby is born, sit down every couple of weeks and look at your spending to see areas you can save. Reality checks are important too, when it comes to new buys. So every now and then ask yourself a question ‘Do we really need this?’ before you spend.
Saving for a baby

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Things you should know

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. All information in this article, including any information on taxation, is of a general nature only and is based on the continuation of present laws, rulings and their interpretation. As individual circumstances differ, you should seek appropriate professional advice.


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