Having a family

The 9-month countdown to a great financial start

5 min read


Congratulations, you’re having a baby! This time of life is filled with so much excitement, coupled with a little apprehension of what’s to come. I remember how real everything felt the day I found out I was pregnant – after months of talking about having a baby, it was suddenly happening.

I felt a real sense of running out of time, and I’d still got nearly eight months to go. But no matter when your due date is, there’s still time to get yourself organised. The BNZ Baby Budget Calculator is a great place to start figuring out how much having a new baby might cost and we’ve put together some of the best ways you can get financially prepared for your imminent arrival.

Practise living on one income

Many mothers take time off work when their new born arrives. This can put a serious financial strain on families who are used to living on two incomes. As discussed in my article Know What to Expect Before You’re Expecting there is financial support available to new families, but the Government’s Paid Parental Leave amount will be significantly less than many are used to, and employers rarely top up this amount for longer than 18 weeks.

To combat this sudden drop in income a good suggestion is to start living on your partner’s salary only. This has two benefits – firstly, you can become accustomed to a more austere income, and secondly, you can put the money from your salary into a savings account, or use it to purchase those one-off, essential baby items, that won’t form part of your day-to-day expenses going forward.

Tip: Open a Term Deposit (TD) for your new savings. The beauty of a TD is that you can choose a term that suits you – depending on your due date a year could work out perfectly, as the deposit will mature just about when the Paid Parental Leave payments finish. Of course, the longer you leave the savings with the bank, the better your interest rate will be.

Learn how BNZer, Marc and his family have juggled family finances with three children under the age of seven.

Buy life insurance

You have so much to do in the first year of your child’s life and it’s not nice to think about the worst happening, but it’s not helpful to ignore it either. Getting life insurance sorted now means you’ll have one less thing to worry about, knowing that your lifestyle and family will be protected if something happens to you.

To work out how much life insurance to buy, think about your family’s financial needs if you weren’t there to support them. You should consider:

  • how many years of income you’d like the insurance policy to replace, and multiply your income by that number,
  • other financial obligations, such as debts and college costs for your children,
  • the cost of services you provide that would have to be replaced.

Tip: Life insurance is for both parents not just the ‘breadwinner’. Stay-at-home parents should consider coverage too, even if they’re not earning. A stay-at-home parent provides valuable services, such as child care, that the surviving parent would have to pay to replace.

Don’t underestimate how generous people can be

As soon as you announce your pregnancy; family and friends come along for the ride. My mum was off buying fabric for a blanket the day I told her, and my friends started discussing my baby shower almost immediately. It’s unbelievable how generous some people can be when babies are around. There’s a good chance that several family members will be keen to put some money aside for your baby, so now is a great time to open a savings account for that purpose. You can give the account details to those who want to deposit some funds – it’s easy for them, and means your baby is already off to a great financial start.

Tip: Friends and family are also a great source of second hand baby items, such as clothes, cots, and blankets. There will always be things you want to buy brand new, but many ‘pre-loved’ items are in great condition and ready to use again. Now’s the time to call in those favours, and see what your networks have stored away in attics and under beds.

Make some space and money by selling your unwanted gear

It’s no secret that babies come with a lot of stuff – tonnes of stuff to be exact, and if you’re like I was when I was expecting my son, you’ll be wondering where it’s all going to fit. Before you start buying the cot, change table, bouncy chair, high chair, bottles, sterilisers (the list goes on, and on!) you’ll need to clear out some of your current unwanted items. Instead of donating everything, you could consider selling some of the more desirable pieces online or at a garage sale. That way, not only are you making room for your new arrival, but you’re making some money too, which you can put towards that must-have, oh-so-cute, yet horrifyingly expensive pram you’ve got your eye on.

Tip: Make sure you check the fees involved in selling your items on auction websites like TradeMe. Sometimes you can end up being hit with a fee that almost negates the effort you went to to sell the item in the first place.


You deserve to be looked after

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