Money Moves to Make Before, During and After a Baby!

You may have noticed it has been a bit quiet on the blog front.  Well, it seems that having a third child is a bit of a life change!  You see the little one only wants to sleep with mum, and definitely not in her own bed!  The other two are sleeping in their own bed, but a bout of colds has seen me up for hours at a time.  With sleep deprivation comes a lack of writing, so apologies. 

I remember the first time my wife gave birth.  I was sure I was ready for this parenting thing, but let’s be honest, I had no idea what I was doing!  I had never changed a nappy, let alone tried to work my way through the myriad of other things I needed to sort out with the new addition.  I thought it would all be roses, never thinking that there is a pile of paperwork to wade through, phone calls to be made and sleep to be..... oh wait there was none of that!

The good news is, by the time you get to number three you have an appreciation for the things that will need to be done.  Hopefully my pain can make it easier for any new parents! I have broken this down to Before Baby, At Hospital and When you get Home to help you work out when things should be done.  Now this list isn't exhaustive and everyone is different, so take this as a starting guide for your adventure.

Before Baby

·         Check your private health insurance (if you have it) to see what needs to happen to add the baby to your policy, whether pregnancy is covered and what gaps may be applicable if you go private.

·         Talk to your obstetrician (if using one) about the planning fee that will be applicable as these aren't covered by your insurance.  Also work out if you are paying per consultation and for scans or if they are all covered in the one fee.

·         See if there are gap fees for the anaesthetist if you are thinking of an epidural as your insurance may not cover the full amount.  There is nothing worse than having a shock as you are about to go home and you are presented with a bill you didn't expect!

·         Begin to plan a budget for your pregnancy so you know how much you have to spend to get everything ready.  I wouldn't be surprised to spend $10,000 if this was my first, and I am sure we did spend that much!  Don't forget that you may go a little overboard if this is your first.  You need to plan for things like:

o    a bassinet

o    stroller

o    bath

o    clothes

o    nappies

o    car seats

·         Investigate your eligibility for government payments such as Parental Leave and Family Tax Benefits.  While you are looking into it all, start at my.gov account and set up your Centrelink account.  You will need these later and they may take a little bit of time to get sorted.  You can preregister the Parental Leave Payment through the online system.

·         Plan for how you will take Maternity / Paternity Leave.  How long can you afford to be off work will depend on factors such as savings, Paid Parental Leave, Leave, Employer Benefits, so it is best to get across this early.  It is better to know you need to make life changes as early as possible so it doesn't come as a shock to the system, once the other shock to the system arrives.

·         Make sure your Personal Insurances are set at the right amount.  If you need to make changes most insurance companies will accept applications up to the end of the first trimester, so get cracking!

·         Make sure you sleep a lot!  You won't remember what it feels like for a while!

At Hospital

·         Call your health insurance provider and put new baby (yay!) on the policy.  This has to be done generally within the first 60 days so the baby is covered without waiting periods, but if baby needs treatment sooner it is easier to get it done straight away.

·         You will be given a Parent Pack from the hospital.  Do not lose this as you need the Newborn Child Declaration. This pack also contains the form to register the birth of your baby.  Take some time to fill this in (you may need your own birth certificates for all the information) and get it witnessed when someone comes to visit you!  Post this off to Birth, Deaths and Marriages.

·         Remember how you set up your my.gov account?  Well you need to jump on it now. Go to Centrelink and then families and commence a new claim.  This will register the baby with Medicare, and you can claim the Family Tax Benefit and Parental Leave payments altogether.  You will need your Medicare card number and a picture of the Newborn Child Declaration to complete the application.  It is also easier to have your tax return information handy and your passport just in case they need the passport number. 

·         Arrange your follow-up paediatrician appointment and obstetrician appointment. 

When you get Home

·         Welcome home!  If all goes well, you will be getting used to the lack of sleep, weird hours the baby will be awake and still trying to have people over because nothing brings out visitors as much as a new born!  Unfortunately there are still some things left to do.  First will be to make sure you have done all the things mentioned above. 

·         Update your will.  Oh wait, you didn't have one before.  You need one now.  No, you really do.  Think about this.  If something happened to you, who looks after the baby?  Your partner, right (this is why you updated your insurance right at the start of all this)!  What if they weren't here?  Who will be the child's guardian?  Don't think this will be an easy conversation, but it has to be done and written down.

·         Thinking of needing day-care in the near future?  Better jump on that as there may be waiting lists.  Check out www.humanservices.gov.au to see if you are eligible for the Child Care Rebate, and work out what the end effect to your budget will be when you go back to work.  Childcare is not cheap so you may need to way up whether there is a financial or personal benefit to going back to work vs staying at home longer.

·         What about schooling?  If you want to go to a prestigious private school, you better get baby on the waiting list.  Don't forget there may be a fee to get on the list, so again add this to the budget!

·         Lastly, there are some rules you need to know when you think it is time to go back to work (these relate to Family Tax Benefits).  Individuals who return to work (or start work) for the first time after the birth of a child or after a child comes into their care, may be entitled to the maximum rate of FTB Part B for the financial year period before they return to work provided they were not earning passive employment income (1.1.P.55) in that period. Eligibility for this extra assistance will be calculated after the end of the financial year when FTB payments are reconciled. - Do not forget this part of the legislation.  The first time my wife returned to work we called Centrelink to inform them and they told us we owed them funds.  I discussed this piece of legislation and the person I spoke with did not know it at all!  If you need to find the legislation it is here: http://guides.dss.gov.au/family-assistance-guide/3/1/9/30

Expecting a baby is incredibly exciting, daunting, nerve wracking and overwhelming, all at the same time!  I know that your finances may be the last thing you want to think of, but by getting on top of it early, you will know where you stand and have less to worry about when the baby arrives!

 


The information on this posting contains general information and does not take into account your personal objectives, financial situation or needs. It is important that you consider your own situation before acting on any information contained in this blog post. 
We recommend that you consult a licensed or authorised financial adviser, such as ourselves, if you require financial advice that takes into account your personal circumstances.