Guest blog by Statewide Super
Whether you’re preparing for pregnancy, already pregnant, or looking to expand your brood, there’s no doubt having kids is an exciting, but expensive, exercise.
While the saying goes “there’s no perfect time to become a parent”, these financial tips will set you in good stead for the months and years ahead.
Set a budget
With estimates suggesting that raising two children in Australia costs between $500,000 and $1 million depending on your lifestyle, setting a budget even before you have children is key. ASIC’s MoneySmart site has some great resources on budgeting, as well as your entitlements.
Save for a rainy day
You never know what life can throw at you, but putting some of your pay check aside is extra important now. If you have a mortgage, sit your savings in an offset account to minimise your interest and help to reduce the length of your home loan. If you don’t have a mortgage, consider a high-interest account or a term deposit for better interest returns.
Know your entitlements
Can you access paid parental leave? And does your work have a parental leave program? If you and your partner are working, and the primary carer earned less than $150,000 in the last financial year, there’s a good chance you’re eligible for the Government paid parental leave scheme. Seek out information about both the Government scheme and your workplace entitlements as early as you can to help you decide how much parental leave you should take – and how much you might need to save in advance to help cover any short-falls.
Practice living on one income
If you know you’ll be a one-income household for a period of time, you might like to practice living on one income in preparation for your new arrival. You could assign money from your second wage to cover big-ticket one-off expenses, such as a cot and furniture for your nursery, as well as saving for the future.
Get super ready
Retirement might seem a world away, but there are a few things that are worth checking when it comes to your superannuation, especially if you’re intending to take a period of parental leave. The Federal Government recently announced that from 1 July 2019, inactive accounts with balances of less than $6,000 will be transferred to the Australian Tax Office. If you suspect you have more than one super account, it may be a good idea to find and roll your super accounts into one, so you only have one super account to worry about. This way, any smaller account balances that you have with other super funds are not being eroded by fees. If you call your super fund, they will be able to assist you.
Preparing for a new family member is also a great time to get your financial house in order, so take this opportunity to ensure you’ve consolidated your super into one account to minimise fees. And while you may not have additional money to put away for your retirement now, it can’t hurt to revisit your super balance, and how much you’ll need to maintain your lifestyle in retirement. Find out how to optimise your super here.
Review your insurances
Protecting yourself and your family is more important than ever once kids come along. Changes to super mean that the Government is planning to remove default opt-ins for insurance cover for people under 25, as well as those with a super balance of less than $6,000, or an account that hasn’t received a contribution in 13 months or more. Where you fall into one of these categories, you’ll want to ensure that your family is protected. Contact your super fund to find out more about your life insurance and other related covers, whether you need to opt-in to receive this cover, and whether any supplementary cover is needed.
You’ll also want to consider your health insurance needs both prior to pregnancy and as your family grows. Even if you have private health insurance for pregnancy and birth, costs can range from $2,455 – $8,355 according to some estimates*. If you’re considering private cover, examine the options ahead of time, and ensure you take into account waiting periods that could impact your plans.
Sharing is caring
There’s plenty of ways to save money as your kids grow. Babies, in particular, only wear clothes for a few months before they outgrow them, so consider second-hand options to save you money. Gumtree, Facebook Marketplace and op shops have plenty of good quality items at a fraction of the price. Sharing with friends is another great way to save, especially when it comes to larger items, like prams. You could also look at organising clothing, toy and book swaps with fellow parents.
Build your network
Finally, while your bank balance is important, as a new or expectant parent the support you’ll receive from family and friends is truly invaluable. Don’t forget to reach out to those who know you and care about you the most when you need them. They’ll help make the transition to parenthood that much easier.
FOR MORE INFORMATION ON STATEWIDE SUPER
Statewide Super is the only industry superannuation fund based in South Australia and open to all Australians, providing financial planning advice directly from its headquarters on Victoria Square.
Statewide Super members are entitled to quality in-house financial planning advice, some of which is included as part of their membership. So, if you’re one of Statewide Super’s 145,531 members, call 1300 65 18 65 and make a time to have your financial health assessed today.
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This is a sponsored post. The information provided contains general advice which does not take into account your specific objectives, financial situation or needs. Before investing, you should consider the appropriateness of this general advice with regard to your personal circumstances. You may also wish to obtain independent financial advice. This blog is not intended to be, and should not be construed in any way as, investment, legal, or personal advice.
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