5 financial things to get sorted before baby arrives

Planning for a baby is hugely exciting, but there’s more involved than just deciding what colour to paint the nursery. You’ll need to calculate how much baby is going to cost and investigate what assistance you’ll need after baby is born. And don’t forget about where you’re going to live! Here are five things to help set you on the right path, and let you enjoy the anticipation of welcoming a baby into your life.

Your baby budget

First up, think about how much a baby might cost. There are online calculators that help you factor in the different costs that come with a baby over the first year, such as baby gear, nappies, nursery outfitting and food, and how these might change as your baby grows into a toddler

Your paid parental leave

Next, investigate whether you’ll qualify for paid parental leave (PPL). This is where the government will replace a mother’s income for up to 16 weeks. The maximum amount paid is $516.85 per week before tax, but this number changes annually to reflect the average New Zealand income. To qualify for paid parental leave, you’ll need to meet certain criteria. Some companies may have their own additional policies written into their contracts, so talk to your employer before you start planning your maternity leave.

Your home

Another important factor to consider when planning a new baby is where you're going to live. The cost of living varies in New Zealand, but regardless, up-sizing to a bigger house within your own area will cost more. For this reason, some people choose to move to a different suburb in order to cut back on housing and lifestyle costs. If you do plan to move and you have a KiwiSaver scheme, it’s worth finding out whether you’ll qualify for a KiwiSaver first home withdrawal or a KiwiSaver HomeStart grant.

Your financial support

If you’ve assessed your budget and feel like you’re going to struggle, it may be time to have a look at financial assistance. New Zealand’s Working for Families package provides financial help for families with at least one employed parent and a combined household income of less than $70,000 a year (or up to $100,000 a year in some cases). Working for Families also works alongside Work and Income New Zealand. They offer accommodation supplements and childcare subsidies. If you’re in a situation where you and your partner can’t work, or if you’re a sole parent, there are benefits to help. For more information visit workingforfamilies.govt.nz.

Your insurance & protection

As you plan for your family, you’ll likely think about protection and security – things you may not have considered before.The main insurance option is home and contents insurance. The last thing you need with a young family is to be spending money replacing or fixing expensive belongings. Health, life and mortgage protection insurances should be considered next. If you lost an income, would your family cope? Different insurance plans can cover the cost of most medical bills, and if the household income was to be affected by a sudden illness or accident, you can receive payouts to assist with making ends meet. It’s also worth considering health insurance plans for your children, as there are benefits for starting membership at birth and some companies offer family discounts.

It’s unpleasant to think of it, but life insurance ensures your family is financially protected in the event of you or your partner passing away. Creating or updating your will is important, as is nominating a legal guardian for your child and formally setting out what would happen to your possessions.

For all insurance types, make sure you do your research and read the fine print. Every policy is unique and may have exclusions that don’t work for you. The information in this article is intended only as a guide. For personal advice on the best insurance cover for your family, talk to a broker.

Adapted from an article written by Jade Membrey for OHbaby! Magazine