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Having a baby

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A little planning now can make the costs of having a baby easier to manage.

Tally the costs of having a baby

Having a baby can change how much you spend and how much money comes in. Planning ahead can help you manage the costs and prepare for time away from work.

If you're asking, 'how much does a baby cost?', start by looking at both upfront costs and ongoing expenses. Some costs happen once, such as buying a cot or pram. Others keep going, such as nappies, formula, medical costs and childcare.

A baby budget can help you work out how much to save before your baby arrives and what you may need to change once your income or expenses shift. 

If you’ve never created a budget before, see our guide on how to do a budget.

Pregnancy and birth costs

During pregnancy and birth, costs may include:

Before choosing public or private care, ask what costs you may need to pay yourself. This can help you compare your options and avoid surprise bills.

If you go public

You may decide to use the public health system during your pregnancy.

Medicare may help cover:

If you give birth in a public hospital as a public patient, Medicare generally covers:

If you expect regular specialist appointments or tests, check whether you’re eligible for Medicare Safety Nets. This may help reduce some out-of-pocket medical costs.

If you go private

Private health insurance may help with some pregnancy and birth costs. Most policies have a waiting period before you can claim for pregnancy and birth-related services.

You can often choose your obstetrician. You may also have access to a private hospital or private room in a public hospital.

Even with private health insurance, you may still have out-of-pocket costs. This could include appointments with your obstetrician, scans, tests or hospital fees.

Before deciding, check what your policy covers and ask about any gap payments.

The Commonwealth Ombudsman has more information on planning for private hospital cover.

After your baby arrives

Once your baby arrives, you may need:

The cost of these items can add up quickly. Before you buy, it can help to make 2 lists:

  1. What you need before the baby arrives.
  2. What you can buy later if you need it.

Ways to keep costs down include:

Check product safety before using second-hand baby items, especially cots, prams and car seats.

The Raising Children website has helpful information about preparing for your baby.

Childcare costs

For many families, childcare becomes one of the biggest ongoing expenses after having a baby.

Some childcare services have long waiting lists. It can help to research your options before your baby arrives, especially if you plan to return to work within the first year.

Childcare options may include:

The type of childcare that works for you will depend on your budget, work hours, location and support network.

When comparing options, think about:

Your out-of-pocket childcare costs may be lower if you're eligible for the Child Care Subsidy. 

The Raising Children website has information about childcare options.

Have a money conversation with your partner

Having a baby can change how your household earns, spends and saves money. Talking early can help you prepare for what’s ahead. 

You may want to talk about:

If you manage money separately, it can also help to agree who will pay for baby costs and shared household bills.

See relationships and money for more tips on talking about finances and making financial decisions together.

Jo and Tai plan for a baby

Jo and Tai are expecting their first baby.

Jo plans to take several months away from work after the birth. Before the baby arrives, she and Tai work out how much income they'll have while she's on leave.

They check what paid leave Jo can get through work and what government payments they may be eligible for. They then use the budget planner to compare their future income with their regular expenses.

The budget shows they'll have less money coming in for a period of time. To prepare, they start putting extra money into savings before the baby arrives.

When Jo begins parental leave, they already have a plan for managing their bills and everyday expenses.

Plan for changes to your income

A new baby can affect how much you earn, how much you spend, and how much you contribute to super. 

Even a short break from work can change your cash flow. Planning early can help you see what money will come in and what bills need to be paid. 

Paid leave from your employer

Check what parental leave your employer offers. You may also be able to use annual leave or long-service leave as part of your plans.

Understanding what's available before your baby arrives can help you estimate your future income.

Ask about:

Knowing this early can help you build a more accurate baby budget.

The Fair Work Ombudsman has information on parental leave.

Government benefits

Depending on your circumstances, you may be eligible for government payments and benefits that can help with the cost of having a baby.

This may include:

Parental Leave Pay can provide financial support if you take time away from work to care for a new child. Checking what you may be eligible for can help you plan your income before and after your baby arrives.

Check Services Australia for information about payments for your family or phone 13 61 50.

Do a future budget

Once you know more about your future income and expenses, create a budget for life with your baby. 

Include:

This can help you see how much you may need before your baby arrives.

Use our budget planner to add your income and expenses and make a budget that works for you.

Try the budget planner

If rising household costs are already putting pressure on your budget, see our information on managing the cost of living. You'll find practical ways to reduce expenses, review your bills and find extra room in your budget.

Plan for your family's future

Having a child can be a good time to review some of your longer-term money decisions.

Saving

As your child grows, new costs can come up.

You may want to save for:

You don’t need to plan for everything at once. Start with the costs most likely to affect your family in the next few years.

See saving for ways to set and reach a savings goal.

Some families also choose to build an emergency fund before their baby arrives. Having money set aside for unexpected medical costs, car repairs or household bills can provide peace of mind when your income or expenses change.

Superannuation

Having a baby can affect your super if you reduce your work hours or take time away from work.

You may want to check:

If you receive Parental Leave Pay, check whether a super contribution applies to your payment.

Wills

If you have a child, you may want to update your will.

A will can set out:

See wills and powers of attorney for more information.

Insurance 

As your family grows, your insurance needs may change.

You may want to review your:

Check whether your current cover would help with rent or mortgage payments, bills and childcare costs if you could not work.

If money becomes difficult to manage, free help is available. A financial counsellor can help you understand your options and make a plan for bills, debt or financial stress. Learn more about financial counselling services.

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