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Having a baby

Budgeting for the costs of a baby

Page reading time: 4 minutes

Becoming a parent is an exciting and life-changing step. Be well-prepared for the costs and budget for them.

Tally the costs of having a baby

Having a baby costs money. It's possible to plan and save for most of these costs, but some can be unexpected. 

Pregnancy and birth costs

During your pregnancy and for the birth itself, costs may include:

If you go public

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

You can also register to get a higher Medicare benefit for out-of-hospital costs. See Medicare Safety Nets on the Services Australia website.

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

If you go private

You can choose private health insurance to help pay for costs during pregnancy and during the birth. There's usually a waiting period of up to 12 months before you'll be eligible for cover.

You can generally choose your obstetrician. You may get a choice of a private hospital or a private room in a public hospital.

However, there are out-of-pocket costs, for example, visits to your obstetrician. Every policy is different, so talk to your insurance company or check your policy.

For more information, see the Commonwealth Ombudsman's pregnancy and healthcare fact sheet.

After your baby arrives

When your baby is born, you'll need:

The cost of these items adds up, but there are ways to save:

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

Childcare costs

Start researching childcare options and planning for this well in advance. Places for babies under 12 months can be limited so you may have to go on a waiting list.

You'll also need to weigh up the cost of child care against how much you're earning.

The type of child care that works for you will depend on how much you need and your budget. For example, you may have family or friends who can help, or you may have to pay for full-day child care or a nanny.

The Raising Children website has information on childcare options and you may be eligible for a childcare subsidy.

Have a money conversation with your partner

Talk with your partner about the best way to manage your household and financial situation. Talk through:

Jo and Tai are expecting their first child. After talking about how to organise their lives once the baby arrives, they've agreed that Jo will take nine months off work after the birth. After that, she'll return to work three days a week.

Jo has 12 weeks of maternity leave. She is entitled to paid parental leave for 18 weeks from Services Australia, and she's also taking some annual leave. Their household income will be lower, alongside the new expense of child care after Jo returns to work.

Jo used the budget planner to plan how they'll manage their money when the baby arrives.

The couple decides to sell their second car and to pay off their credit card before the baby arrives, to reduce some of their regular outgoings.

Plan for changes to your income

Decisions about if or when you and/or your partner return to work can affect your income, childcare costs, and even your superannuation.

Paid leave from your employer

Find out what your employer offers as paid parental leave. Also check if you can use your annual or long-service leave.

The Fair Work Ombudsman has information on parental leave.

Government benefits

Depending on your income and assets, you could be eligible for government benefits:

You may also be eligible for one or more of the following:

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

Do a future budget

Once you've got an idea of your future income and expenses, you can do a budget. You can use our budget planner so you know what to expect and how much to save. Put in your income and expenses, including baby costs, to create a budget that works for you.

Try the budget planner 

Do your post-baby budget.

Plan for future you

Adding extra people to your family means changing some of your financial arrangements. For example:

Saving – Think about regularly putting away some money for education and future expenses for raising your child. See saving for ways to do this.

Super – If you or your partner change working arrangements, see how it affects your super. Check:

Also review your nominated beneficiaries (who you have listed to get your super if you die)

Wills – Update your will to include any guardian of your child.

Insurance - You might need to review the amount of life insurance and income protection insurance you have. As well as ensuring that your health insurance policy matches your needs as a bigger family. 

If you're struggling there's always help available! Learn more about financial counselling services you can use.