Kiddipedia
Some things in life are more predictable than others. In our experience nothing prepares you for the life-changing impact of bringing tiny humans into the world. It opens up entirely new realms of priorities and also financial needs.
From medical costs, time off work, daycare and school fees, the list grows rapidly. The goals and financial needs you may have had as an individual or couple change just as fast.
Depending on your income and budget, you need to think about whether you’ll save for this in an extra “baby fund” or whether ongoing income from parental leave payments or sufficient income from a spouse or partner will get you through.
Timing for your family plans might be rough estimates or fairly specific, but we highly recommend your plan be flexible enough to allow for the unpredictable nature of this stage of life.
Here are a few key items to think about as you start your journey:
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Funding Fertility
For a lot of people, this part is effectively free, and fun! For others, like us, it can be a long process. Our journey took a lot out of us not only physically, mentally and emotionally, but also financially. Fertility costs were not something we had planned for. We needed IVF for both our kids, on top of costs for multiple rounds of surgery for endometriosis.
In our experience, fertility treatment is highly individualised. A ‘formula’ that works for one person or couple might not work for another. As a result, timelines and budgets also fluctuate.
Currently, out-of-pocket costs for a cycle of IVF at most private fertility clinics is a little over $5,000. Medications can cost a further $2,000. In some states, pre-fertility screening is rebatable and there are government initiatives to help reduce other costs. For example, since 2021 in New South Wales, eligible patients’ out-of-pocket costs for a total cycle at some public clinics can be reduced to just over $1,000 (Public hospital waiting lists may apply). Generally, you’ll pay a little more for your first round, and a little less for subsequent rounds, should they be needed. Costs for a round are roughly halved if you have frozen embryos available.
Although the fertility journey can be stressful, having your money sorted may put your mind somewhat at ease.
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Birth and setting up at home costs
Costs here range from around $3,000 to $10,000. Birthing costs will depend on where you plan to deliver. If you choose a public hospital, and you have Medicare, then out-of-pocket costs are likely to be between $0 and $1,500.
Because of our medical history, we chose a private hospital and our own OB/GYN, and the out-of-pocket cost for each birth was about $5,000. That cost included multiple appointments and tests throughout the pregnancy.
When it comes to bringing your new baby home, initially there are four big items — car seat, cot, change table and pram. Basically, the rest can wait!
You can budget from as little as $0 for second hand items for most of these (although we don’t recommend this for car seats – safety first, don’t skimp here!). Plan for between $100-$200 per item from somewhere like Big W or Target, all the way up to $2,500+ for a pram, $1500+ for a cot and $1000+ for a change table or car seat.
As you can see, the price range for this stuff is huge. A quick search led us to a car
seat selling for $10,687 — we hope it self-cleans number 3s! If you land in the middle of this spending range, you’re up for around $3,000 for these big items. Finally allow $500 for everything else and be ultra-clear on things you would appreciate as gifts too!
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Time off and parental leave payments
Taking time out of work to care for your new baby can make a rude dent in your budget!
Current data indicates only 60% of employers in Australia offer approximately three months’ fully paid parental leave.
For primary caregivers (earning less than approximately $168,000 in the previous financial year) the federal government also kicks in 22 weeks of parental leave pay (increasing up to 26 week in 2026) based on the minimum wage of approximately $18,000 before tax. Recent changes have included the ability to look at your household income, rather than just the primary carer’s income.
The good news is that if you are eligible (and meet the income and work tests), you can claim both paid leave from your employer and from the government. There are also options to share leave between primary and secondary carers.
Depending on your budget, or your family’s reliance on the income of those taking parental leave, you may need to save an extra amount prior to stopping work to get you through.
We’ve found, both personally and working with many clients, that while babies might reduce your income for a time, they don’t usually increase expenses much while they’re little. Less clubbing and dining out, more nappies and triple-shot flatties — they tend to balance out.
We are so grateful things turned out as they did for us. Although it’s important to look at the numbers, and you’ll want to be as well-prepared financially as possible, in the end, unless you’re swimming in personal debt and aren’t making ends meet, you’ll move mountains to make this happen. After all, starting a family might be the start of the single most fulfilling part of your life!
James and Tash Millard are owners of financial advice firm, Sufficient Funds. James is also author of the new book, Insufficient Funds (Wiley $32.95). James and Tash lead their large team and clients with the philosophy that champions aligning financial decisions with personal values. Insufficient Funds furthers their mission of empowering individuals through financial literacy with a relatable approach. Find out more at www.sufficientfunds.com.au
Disclaimer: This is general advice. Personal circumstances need to be taken into consideration.
