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Budgeting for a Baby

Financial stress is more prevalent than it’s ever been with the rising cost of living affecting all of us. When we polled our Instagram community, 80 percent of respondents said that increasing costs were affecting their decision to expand their family.

While half of all pregnancies in Australia are unplanned, there are still thousands of people consciously planning a pregnancy and finances are often a deciding factor. If this is you, make sure you tune into episode 395 with financial advisor, Canna Campbell, who explains all the practical things you can do to ensure you’re financially prepared to welcome another family member (and go down to one income). 

If you’re feeling a bit overwhelmed by your budget and want some practical tips for managing your money and your mortgage, here’s five things every couple should discuss pre-pregnancy: 

  1. Do you need to see a financial counsellor? A financial counsellor is the best option if you’re in debt, living pay cheque to pay cheque or dependent on your credit card for the essentials. If you’re in a financially critical position and you need serious help, intervention and life changing strategies to get you back on track, a counsellor can be extremely valuable as they can put you in contact with resources that are community and government based. Their guidance alongside practical resources can encourage you to stop making the same mistakes and improve your financial situation in the short and long term.
  2. Do you need to see a financial planner? A financial planner can help guide you towards your financial goals. If you’re starting a family, this could be preparation for one less income. A financial planner can also outline your financial responsibilities, ensure your super is invested correctly to ensure your long-term financial independence, discuss how you can pay off your home loan before the allocated 30 years and how to legally save money on your tax each year.
  3. How can you future-proof your mortgage? Going down to one income is stressful, especially if you’ve got a variable home loan that continues to increase in the current climate. It’s really important that you do the preparation; understand your mortgage, look at how interest is calculated, and create goals to build up your offset or redraw facility so you’re ahead of the game. During pregnancy, extra repayments can help you prepare for the inevitable reduction in your income.
  4. Create a budget : Everyone downplays how much they actually spend so go old school, grab a pen, notebook and a calculator and go through your credit card statement and bank balances. You may be surprised when you learn your true cost of living but it’s never too late to make changes. Consciously cutting down is extremely important if you know that there will be significant changes to your income and your life in the future. Look at your diary and plan accordingly; it’s not so much about being restrictive but realistically planning ahead so you can feel prepared and empowered.
  5. Don’t forget the most important thing : small, simple changes in the way you spend, save, protect and build money makes a huge difference to your wellbeing. 


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