Budgeting for a baby in NZ
Feeling broody? Take the time now to start considering the dollars and cents of adding to the family.
How do you get financially ready for a baby?
In an ideal world, the only currency you'd need to increase the size of your family would be love. But the reality is, the financial costs of raising a child can affect the emotional gains. Poverty is a significant indicator of many social and health problems in NZ families.
However, with research and some forward financial planning, you'll be able to thrive when the time comes. The cost of raising a child in NZ is manageable, with a bit of planning, saving, and budgeting.
First make a baby budget
Write down everything you currently spend over a week, from the big ticket items to the small ones. Rent, petrol, food, electricity, phone, internet, everything. Note the areas where you could save money.
Creating a budget is the first step to discovering what scenario will work best for you. Work out an average weekly/monthly spend, so you can avoid going over it. If you're planning on returning to work, are you intending to go back full-time or part-time? You'll also need to consider if it's actually worth your while returning to work at all, given the added expense of childcare.
Pay off your debts
Then get stuck into repaying debt. Pay off any credit card or store cards as soon as you can, because even regular small amounts will make a difference.
If you have a lot sitting on a credit card that has a high interest rate, think about transferring the balance to another card or bank. Some lenders offer enticingly low interest on a credit card balance transferred over. While this is only locked in for a set time, it gives you time to pay it off without the crippling 25% interest rate.
How much does a baby cost in NZ?
Many NZ parents ask how much does a baby cost in first year. Figures show that families spend on average (including childcare) over the first year, up to $15,834 for a baby (0-12 months). This is not a small amount of money; where will you get this from? Do you have savings? Can you afford this when you drop to one income?
How much money should be saved before having a baby?
The next thing to do is start saving – now! If you've gone back to work since having your child/children, take advantage of your income while you have it, and put as much money aside as you can from each pay cheque.
While there’s no rule about how much you need to save before the baby arrives, you want to have enough money in the bank that factors in your living expenses (which you calculated in the budget), the cost of baby first year in NZ ($15,000 ish), and some breathing room.
How much does a baby cost monthly?
While it costs $1,320 per month averaged out from the yearly baby expenses, that’s not how baby costs work. There is an initial large outlay as you buy all the baby things you need; cots, strollers, car seats and clothes. Then the baby arrives. There’s minimal cost for the first six months aside from formula/ nappies and Mum’s catch up wine/ sushi/ soft cheese. Then, the baby starts to eat solid food and you may start incurring childcare costs. The cost of a baby depends on your lifestyle and expectations.
Your big ticket baby expenses first year
Your budget for essentials could be anywhere from $1800 to $5,500 depending on your budget and needs. Check out our list of essential baby items below with price ranges per item to help you budget for baby coming.
Bassinet - $80 - $500. You can get cots with adjustable mattress heights now, so a bassinet is not a must-do.
Clothing - $5 - $100 per item - Here is a few tips for shopping for baby clothes. Hand-me-downs and pre-loved clothes are another way to cut costs too, as babies are always growing, the total cost for clothes over the year can be anywhere from $220 - $1000.
High Chair - $35 - $500. Get the low down on highchairs here.
How much does it cost to have a baby in NZ?
Luckily, nothing. Our healthcare system is completely free. While opting for an obstetrician may cost you extra, or getting extra scans will incur a cost, on the whole, the pregnancy itself and the birth is free.
What can help with the cost of having a baby in NZ?
In NZ, we have a number of government led initiatives that can help with the cost of having a baby.
Maternity leave can be used for the mum, dad, other carer, or split across anyone depending on who wants to stay home with the baby. Maternity leave is 52 weeks long, although only 26 weeks is funded by the government. There are conditions attached to this though, so make sure you understand how it works.
Best Start payments are eligible for all babies in their first year. This is, as the time of writing, $60 a week. You may be eligible for another two years of payments, depending on your income.
Working For Families is a government subsidy that you could be eligible for, depending on your income level. This depends on how many children you have too, so check this out with the IRD.
Here are a few more money-saving tips
Be conscious of your discretionary spending and don't fall into the trap of "stroller envy". Fancy toys are nice, but leave them for Grandma and Granddad to buy when they want to spoil the little ones. Your money is better spent elsewhere. You can also find most items in good, second-hand condition for a fraction of the price of new items.
Breastfeeding is certainly cheaper than formula, but don't forget to budget for a breast pump, bottles and associated solid food feeding paraphernalia once the baby is 6 months old. This can add up to around $1,500 over the year.
Buying in bulk can save you money (and many online nappy delivery services will deliver to your door, saving you the inconvenience too).
Don’t think you have to use disposable nappies. Modern cloth nappies cost from $7 to $15 each, making them a sizeable investment initially. For a common mainstream brand, disposables can cost about 60c each. Ten nappies a day, that’s $6 a day. Over three years, that’s $6570 you’re spending on rubbish. If you decide you need about 30 reusable nappies (washing every other day), that’s $450, and a whole lot less impact on our planet.
Do your research. Scour the OHbaby! forums and ask advice from other mums about products that are good value for money. Sometimes you'll find it's actually more cost-effective to buy new and then resell on sites such as Trade Me.
Buy unisex big ticket items such as strollers, cots and high chairs. That way you'll be able to reuse them for subsequent babies regardless of their gender.
Beg and borrow from friends and family. Things like a cot, for instance, can last for many years, and people are often happy to give away their old gear. It’s not unusual to have bags of clothes or toys given to you too—and often all that’s needed is a quick wash and they are as good as new.
With research and forward planning, you’ll be better able to manage your finances when your bundle of joy arrives.