The hidden costs of having a babyCrunching the numbers on how much it really costs to start a family

September 2017

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There’s a reason for that. According to the Australian Bureau of Statistics, there are more than 300,000 babies born in Australia each year. That’s roughly one new baby every two minutes.

But despite the rewarding baby smiles, coos and giggles, having a child is a major transition for any new parent. In those first few weeks and months, you’ll be adjusting not only to new sleeping patterns and changing family dynamics, but also most likely to a lower household income.

Whether you are thinking about starting (or adding to) a family sometime in the near future, or your little bundle of joy is already on the way, it’s always helpful to know what’s likely to be in store financially so you can prepare in advance. Budgeting for your new family member will assist in reducing financial stress, so you can enjoy your time in that bubble of new baby bliss.

This guide will provide some tips to think about when evaluating the cost of having a baby.

1 http://www.abs.gov.au/ausstats/abs@.nsf/mf/3301.0

Feel like everyone has baby fever at the moment?

Chapter 1: Preparing yourself for that bundle of joyPrivate hospital coverIVF and acupuncture

Chapter 2: How much do babies cost?Baby budgeting 101: Baby items you might needThink outside the boxThe one cost I didn’t see coming

Chapter 3: Health insuranceWhat are the different types of health insurance I can get?What’s covered and what’s not?Expected costsHow to choose the best providerMind the gap: how do gaps and rebates work?Plus baby makes three: how do I add a new child to my policy?

Chapter 4: Loss of incomeMaternity leave: know your entitlements

Chapter 5: Don’t forget about mum!Maternity wearGet some TLC

Chapter 6: Putting a price on childcareWhat are my options?Five ways you could minimise childcare costs

Chapter 7: The cost of (not) vaccinating

Chapter 8: Time for a holiday!

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Contents

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Chapter 1:

Preparing yourself for that bundle of joy

Not only are there numerous baby-related costs to consider before your new family member arrives, there are a few you should factor in pre-conception as well.

Private hospital cover

Before you or your partner fall pregnant, it’s a good idea to decide whether you’d prefer to go through the public or private hospital system for your pregnancy and birth. If you would rather go private, you will need to check whether your pregnancy and birth-related costs will be covered by your private health insurance. Many private health funds impose a waiting period of 12 months before you can claim on pregnancy and birth-related costs, so your insurance is something to organise well in advance of ‘trying’ for a baby.

Pregnancy and birth-related cover isn’t offered as standard by most health providers, so this is something you’ll need to add on. Given pregnancy cover can come at a significant cost, it’s important to compare providers and make sure you get the most bang for your buck.

Copyright 2017 Canstar Pty Limited A.C.N. 053646165. This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you. Please ensure that you read the product disclosure statement to determine all the current options and inclusions for the product you are considering before making a purchase decision.

Statistics referenced on this page have been verified by Canstar Research P/L. See the FSCG at https://www.canstar.com.au/canstar-fscg/. The inclusions mentioned represent a selection of what is covered at the time of writing. Additional terms and conditions may apply to different features. Additional fees may apply to the product.

Here’s a sample of your options if you’re looking to take out hospital health insurance with pregnancy cover. The table below shows Hospital Cover Only policies available on the Canstar database for couples born in 1980, living in NSW, sorted by Canstar Star Rating (highest - lowest). Data in the table is updated as at 05/08/2017.

The Star Ratings in this table were awarded in September, 2016 and data is as at that date, updated from time to time to reflect product changes notified to us by product issuers.Consider the provider’s detailed product and pricing information before making a decision to purchase a policy. The products displayed on this page do not include all providers and may not compare all features relevant to you. View the Canstar Health Insurance Star Ratings Methodology and Report. The rating shown is only one factor to take into account when considering products. Check waiting period for maternity cover in each policy.For more information, read our detailed disclosure, important notes and additional information.

Company

Gold Hospital $100/$200

Gold Hospital $200/$400

Budget Direct Top Hospital

Top Hospital Cover - $500 Excess - Family

H1: Top Hospital with MemberShare co-pay of $70 per day

Star Rating Excess

$100 per admissionWaived for day

surgery

$200 per admissionWaived for day

surgery

$450 per admission

$500 per admission

$0 per admission + $70 per night

$293

$282

$246

$278

$278

Monthly Premium (approx.)

Pregancy

Compare health insurance policies with pregnancy cover

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It’s also important to check the inclusions in each policy, as the definition of ‘maternity’ cover can vary significantly by provider. For example, many single and couple policies that include pregnancy will automatically cover your baby for up to two months after birth. However, not all do, so be sure to read the fine print first.

It is worth considering hospital cover for your baby in case an issue arises after birth that requires medical treatment - for example where time in a humidicrib is needed for a premature baby.

Overall, the average cost of having a baby in a private hospital can be anywhere from $6,500 to $15,0002. Having private health insurance can reduce your out-of-pocket costs to $1,500 - $7,500, on top of your yearly premium.

If that seems like a lot, a public hospital birth is still a popular option for many, with the estimated cost being around $0 - $1,5003.

2 https://pregnancy.bupa.com.au/Step-start/Planning/Planning-Step-2?sid=3d1d30cc-c0dc-4d1b-973e-96bea89feaa6#/Private-Hospital 3 http://birthchoices.raisingchildren.net.au/compare_care_options/public_hospital/cost/index.html

IVF and acupuncture

For new parents expecting to use In-Vitro Fertilisation (IVF) to assist with conception, this can be an expensive venture. According to BUPA, the average cost of a standard IVF cycle is between $8,000 to $10,000. The most recent ANZARD report from 2012 revealed IVF success rates were as low as 3.6% in 2011, meaning many patients have to go through multiple rounds of treatment.

While Medicare will cover some of the cost, you are likely to remain significantly out of pocket without private hospital insurance. Many health funds will include IVF as part of their obstetrics cover, but some will ask you to add this as an extra.

BUPA claims having private health insurance will reduce the out-of-pocket cost of IVF to around $3,200 - $4,200. This is considerably more affordable than the aforementioned $10,000 figure, particularly for those who may need to go through several rounds.

Meanwhile, acupuncture is a popular holistic health method some women choose to support them in their efforts to conceive, cope with morning sickness and induce labour. While this is considerably more affordable than IVF - costing anywhere from $60 - $150 per session - regular acupuncture sessions throughout all nine months of your pregnancy can certainly add up.

Health insurance Extras cover will generally allow you to claim back around half of this cost, depending on the provider. As acupuncture is not always pregnancy-related, most insurers will provide cover for acupuncture as standard under a mid-tier Extras policy - but be sure to check the inclusions before purchasing.

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The big financial questions to ask your partner early

For those preparing to enter the world of parenthood with a partner, it is important to ensure you are on the same page where your finances are concerned. We asked Canstar’s Group Manager, Research and Ratings Mitch Watson which questions to ask your loved one to establish how you will manage your finances through this exciting and critical period of your life.

1. Which one of you will stay home to care for the baby initially and for how long? When discussing this some areas that you should be looking to consider are:

a. Will you have access to any maternity leave benefits? If so, for how long and how much?b. Would you be eligible to receive any government assistance through assistance payments?c. If you are going back to a single income how does that sit against your living expenses (including financial commitments e.g. home loan repayments) factoring in that there will also be another mouth to feed?

With consideration to the items above you will have a good insight into how you are setup financially for this next step. It will also help in seeing whether you can afford to both take some time off initially to support each other through such a major transition.

2. In the instance you experience difficulties conceiving, are you open to consider investing in anassisted technology such as IVF? Would adoption or surrogacy be an option? Given that some of these can be costly options, it is best to work out early on where you stand.

3. What are your lifestyle priorities looking ahead to your life as a parent? It is wise to start talking early about the major decisions ahead such as childcare and schooling options, as you may need to consider starting to save for private schools sooner rather than later if this is a non-negotiable for you. Are regular family holidays a priority? These discussions will help guide your saving needs and make career decisions simpler to make.

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Chapter 2:

How much do babies cost?Babies don’t come cheap. According to the Australian Institute of Family Studies, a first child costs between $3,000 and $13,000 in the first year alone4.

However, the cost can vary depending on your choice of product and whether you view certain items as essential. For example, a bouncy seat might be a luxury in your household, or it might be a non-negotiable lifesaver.

And remember, ‘brand new’ is not the only option. Many of the things your baby needs can be bought second-hand from op shops, on Gumtree – or even donated for free from friends and family with kids who are growing out of the baby stage. It is always best to check the items you are using meet Australian mandatory standards.

The cost of a baby usually decreases with each one you have, since you are likely to already have those initial items sorted, such as the car seat and the pram.

4 https://www.babycenter.com.au/a559811/buying-for-baby-on-a-budget#ixzz4qiXO4BnT

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When

Pregnancy

For Labour and Birth

Item

Couples’ health insurance policy with obstetrics and childbirth cover

Pregnancy belly band from chemist

Nursing pads

Prenatal vitamins

Probiotics to help with pregnancy constipation

Birthing ball

Back massager for counter-pressure

Electrolytes (e.g. coconut water, Staminade)

Nursing bra

Herbal sitz spray

Maxi pads

Family health insurance policy with obstetrics cover and paediatric cover, or with non-obstetrics cover

Blanket and newborn clothing

Baby clothes

Natural baby washCloth nappies/diapers, or

Est. Cost

$4,318/year in NSW (click here for more information)

$30 from chemist, Target or Kmart

$20 from chemist

$61.75 for 100 tablets from chemist

$20 from supermarket

$15 exercise ball from Kmart

$10 for tennis balls from Rebel Sports

$10 from supermarket

$30 from Target

$10 from chemist

$10 from supermarket

$4,318/year in NSW, or $3,813/year in NSW (click here for more information)

$25 from baby stores or Target

$74.39/month spend on average by Aussie parents (Canstar Blue)

$20 from baby stores$20 for 12-pack from Kmart$25 from supermarket

Baby budgeting 101: Baby items you might need

The table below lists some of the common costs associated with pregnancy and preparing to bring home a new baby in Australia. The costs listed are representative averages only, and current at the time of writing, and can be used as a rough guide when planning your baby budget. This list is intended as a guide only - not every expecting parent will want or need everything listed.

After Birth

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Disposable nappies/diapers

Disposable liners for cloth nappies Non-toxic baby wipes

Car seat for the trip home

Crib, cot or co-sleeper Mattress for crib Washable crib mattress underlays Fitted crib sheets Baby blanket Pram or stroller

Baby carrier (e.g. Ergobaby, BabyBjorn) Soft washcloths Baby shampoo Baby towels Changing table or cushioned changing pad Changing table cover Diaper pail (e.g. Diaper Genie)

Diaper cream (baby butter for nappy rash)High chairBaby bottles Breast pump (express pump)

$56/month spent on average by Aussie parents (Canstar Blue)

$10 from supermarket or chemist

$7 for 70-pack from supermarket

$273 spent on average by Aussie parents (Canstar Blue)

$120 – $400 from IKEA

$25 from Big W

$15 for 2-pack from BabyBunting.com.au

$20 each from baby stores

$10 from Kmart

Approximately $422 spent on average by Aussie parents (Canstar Blue)

$135 spent on average by Aussie parents (Canstar Blue)

$4 for 10-pack from Target

$15 from chemist

$15 each from Target

$50 from IKEA

$15 from baby stores

$80 from Toys ‘R’ Us

$20 from chemist$5 from supermarket$30 from IKEA$10 for 3-pack from baby stores

$49 – $599 from baby stores or chemist (Canstar Blue)

Bringing Baby Home

When Item Est. Cost

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Milk storage bags (if you plan to breastfeed) Vaseline for breastfeeding Nursing cover cloth Bibs Burping cloths Pacifiers / dummies Baby formula Baby nail clippers Baby thermometer Baby rocker or bouncy seat Toy basket

Baby monitor

Tummy time mat

Baby bag

Baby spoons, bowls and plates

Toys

Books

Chest of drawers/wardrobe

Nursing chair

Steriliser

Baby swing

$20 from baby stores

$11 from chemist

$25 from baby stores

$10 for 3-pack from Toys ‘R’ Us

$10 for 4-pack from Toys ‘R’ Us

$10 from baby stores or chemist

$30 from supermarket

$15 from chemist

$50 from chemist

$80 – $150 from baby stores

Free (you already have some laundry baskets, don’t you?)

$170 spent on average by Aussie parents (Canstar Blue)

$29 from Kmart

$100 - $250 from baby stores

$8 for ‘my first dining set’ fromKmart

$5 - $100+

$2 - $15

$300 - $1500 from baby stores

$399 from baby stores

$50 from chemist

$100 - $300 from baby stores

Source: Additional baby-related costs researched by Canstar Editorial Team.

When Item Est. Cost

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Think outside the box

Aside from the common baby-related costs that initially come to mind, there are a few ‘out of the ordinary’ items you may want to factor into your budget.

For example, a lot of new parents like to slap on a new coat of paint in the nursery before bub arrives, or decide to repaint the whole house while they are at it. Or you may find the carpet in your old spare room was fine for the occasional visitor, but doesn’t quite cut it for the soft head of a clumsy baby in your new nursery.

The average cost of a professional painter is about $10 - $30 per square metre, depending on the type of paint you choose, ceiling height, window detail, etc . If you’d prefer to do it yourself, it can still set you back anywhere between $200-$300 per room, depending on the paint you choose.

Meanwhile, carpeting can range greatly from $20 - $300 per square metre, depending on the quality of the carpet, height of the underlay, ease of the job and so on.

Another popular pre-baby renovation is the installation of air conditioning, heaters and fans. Babies are said to sleep better between 20–22.2°C, and have more trouble regulating their body temperatures than adults do.

There are a number of choices when it comes to air conditioning that can affect the total price. Split system air cons are great options for small areas, but lack the power to affect larger spaces – this is reflected in their relatively cheap purchase price, from around $1,000-$2,000. Ducted air conditioning for a standard four bedroom, single-storey home will cost around $11,000 to $14,000. Large, multiple storey households can expect to pay considerably more – anywhere from $15,000 to $30,000. Check out this article to read more about the benefits and costs involved with ducted vs split system air conditioning.

You also need to keep in mind the running costs of air conditioning, which can be significant. According to research by Canstar Blue, air conditioning can cost as much as $32 a month or as little as $2.25 per month.

If you’re in a more moderate climate and don’t need the heating option, fans are a much more affordable option. You can expect the installation of a basic ceiling fan to set you back at least $300 , or you can pick up a pedestal fan from Bunnings for a quick $40.

Source: Additional baby-related costs researched by Canstar Editorial Team.

Create your own baby budget with ourbudget planner calculator

5 https://renovations.onthehouse.com.au/How_Much_Do_Painters_Cost#.WZ-UzncjGb86 https://rednose.com.au/article/room-temperature 7 https://www.homeimprovementpages.com.au/article/how_much_does_it_cost_to_install_a_ceiling_fan

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The one cost I didn’t see comingWe asked a collection of parents who have been around the parenthood block to share

the unexpected cost that most surprised them.

“My wife had twins in July and for us the biggest unexpected cost was easily the medical bills. We’d had private insurance covering us for obstetrics for three years, and I perhaps naively thought this would cover most of our out-of-pocket expenses. It’s fair to say I was wrong – we’ve had bills from our obstetrician, paediatrician, anaesthetist and more arriving since we left hospital. In terms of overall costs, we spent around $25,000 before they arrived. I wasn’t quite ready mentally for that - or a pram that cost almost as much as my first car!”David Ball, CEO Hyperbank

“When I had my third child I didn’t anticipate the additional time my husband would need to take off to help care for our other children. We are equipped with all the baby essentials already, and as experienced baby makers we knew all about the added expenses of nappies, wipes and coffee due to sleepless nights. However, this time around with a toddler and a school-aged child the workload was demanding. My husband had to take off an extra 10 days to help with school runs, wrangling the tornado toddler and helping when we all fell ill. That extra time off cost us about $3,000 extra in wages, which definitely wasn’t something we factored in.”Gina Rose Urlich, nutritionist and blogger (Featured above)

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“My wife and I are pretty organised with our finances, but the one thing we didn’t plan for was an unusual pregnancy. We ran into some complications that resulted in a few visits to the hospital, and several specialist appointments. Our beautiful baby ended up arriving five weeks early and was tended to in the special care nursery for 10 days before we could take her home. As we were in and out of hospital that whole time we ended up paying close to $500 in parking costs. That was definitely unexpected, although we were happy to find out the fees helped fund medical research for mothers and babies.”Matt Burrell, Senior Digital Producer Canstar

“I’ve found it is the overhyped accoutrements that come with precious baby number one that really hit your hip pocket hard. As brand spanking new parents you are very easily convinced that you absolutely need that baby wipe warmer (yes, they do exist), the nappy disposal system, a bottle steamer and a luxury brand baby bag for good measure. These items can easily add up to thousands of extra dollars you didn’t plan for. Now onto our third son (and no more!) I can tell you that you probably already have almost everything you need to keep your baby happy and healthy. Your bundle of joy won’t notice you’re using a well-worn favourite bag to carry their things, other parents in your circle will be too consumed with their own kids to mind, and it’ll save you a whole lot of unnecessary spending.” David Hoey, CEO MiTraining

“When you first find out you’re having a baby there is a lot you don’t think about. A baby is pretty self sufficient, right? Besides the usual costs of nappies, they don’t eat much food, their clothes are tiny and they don’t need many ‘things’- surely? If you’re anything like us, we were extremely surprised when we found out we were expecting twins- which means DOUBLE of everything. When I found out I couldn’t breast feed my girls, the cost of formula was an expense I’d never considered, having breastfed both of my previous children. With formula, you can’t reuse what they don’t drink and by six months our girls were collectively drinking two to four tins a week at $35-$38 a tin! A $150 a week expense we certainly never anticipated.” Sophie Guidolin, author of My Kids Eat

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Chapter 3:

Health InsuranceIn Australia, you can receive care in a public hospital or birth centre for free, as it is covered entirely by Medicare.

However, if you would like to give birth in a private hospital, you will need to have private hospital health insurance. This helps patients cover the cost of in-hospital treatment by the doctor of your choice, accommodation to stay in a ward and the theatre fees for surgery.

Generally, any medical services listed under the Medicare Benefits Schedule (MBS) should be covered by private hospital insurance. This includes treatments such as doctors and specialists, tests and examinations such as X-rays and blood tests, surgeries and other therapeutic procedures performed by doctors, and certain allied health services (e.g. psychologists, psychiatrists, chronic disease management).

Some of the benefits of private health insurance may include:

1. Avoid public hospital waiting lists and patient priority order2. Stay in a private hospital room when available3. Claim money back on non-Medicare health services4. Select your obstetrician or midwife, and have continuity throughout your pregnancy5. Claim the private health insurance rebate6. Avoid the Medicare Levy Surcharge7. Save long-term on Lifetime Health Cover

What are the different types of health insurance I can get?

Private health insurance coverage depends on whether you choose a Hospital Only, Hospital + Extras, Extras Only policy or Ambulance Cover policy.

Hospital policies cover a patient to be treated as a private patient in either a public hospital or a private hospital. This covers the patient for elective surgeries (such as an elective cesarean), as well as emergency or medically-necessary surgeries. Hospital policies can be added to Extras policies or purchased separately as Hospital Only policies.

Extras policies cover a patient to receive treatment from non-medical services or allied health services. Depending on the level of cover chosen, the services covered may include physiotherapists, chiropractors, acupuncture and more. Extras policies can be added to Hospital policies or purchased separately as Extras Only policies.

Ambulance cover may be purchased separately as an Ambulance Only policy or combined with Hospital or Extras policies.

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What are the different types of health insurance I can get?

The level of coverage will depend on your insurer, but on average, you can expect the following to be covered under a Hosptial + Extras policy that includes obstetrics cover:

• The cost of shared or private room accommodation in hospital• The cost of private room accommodation in the labour ward• Some coverage for obstetrician, anaesthetist, other specialist medical services and any diagnostics, e.g. bloods, tests, scans etc., provided while you’re in hospital• Operating theatre facility fees • Intensive care accommodation• A portion of treatment from non-medical services or allied health services (physiotherapist, acupuncture, etc.)

Some of the out-of-pocket costs you can expect with private health insurance include:

• Hospital excess (you can select this amount when setting up your policy)• A portion of the hospital fees, including any co-payments applicable to your cover • Gaps’ on any treatments not covered entirely by your insurer (will explain this in more detail later)• Specialist consultations and check-ups with your obstetrician• Paediatrician visits

It’s important to keep in mind any health issues that arise during the pregnancy or birth may result in increased costs. For example, additional specialist appointments as a result of a gestational diabetes diagnosis, or emergency intervention during the birth will likely end up costing your more out of pocket. Make sure you read the Product Disclosure Statement (PDS) and the terms and conditions of your policy to ensure you’re aware of what you’re covered for.

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Expected Costs

Prices vary between different health funds, but Canstar Research has found that the average cost of family package cover (Hospital and Extras) tends to be around $79 per week.

However, these prices are softened by the Federal Government’s Private Health Insurance Rebate; this income-tested benefit rebates a percentage rebate of your health insurance premium. Taking out private hospital cover also means you are exempt from paying the Medicare Levy surcharge, which can be up to 1.5% of your income.

Below, Canstar has calculated the average annual premiums across the health policies we assessed for our 2016 Private Health Insurance Star Ratings, to give you an indication of what you can expect to pay for obstetrics cover:

2016 Health Insurance Premiums – Hospital and Extras Packages

Profile

Couples and Families - With Obstetrics

NSW

$4,318

TAS

$4,277

QLD

$4,450

WA

$4,011

NT

$3,271

VIC

$4,480

SA

$4,235

Copyright 2017 Canstar Pty Limited A.C.N. 053646165. This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you. Consider the product disclosure statement before making a purchase decision. Statistics referenced on this page have been verified by Canstar Research P/L. See the FSCG at https://www.canstar.com.au/canstar-fscg/.

The Star Ratings in this table were awarded in the most recent ratings season. The search results do not include all providers and may not compare all features relevant to you. View the Canstar Star Ratings or Award Methodology and Report for the product you are considering. The rating shown is only one factor to take into account when considering products.

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• ahm Health Insurance• Apia• Australian Unity Health Limited• Budget Direct• Bupa• CBHS Corporate• CDH Benefits Fund• Central West Health Cover• CUA Health Limited• frank Health Insurance• GMF Health• GMHBA Health Insurance• HBF Health Limited• HCF (The Hospitals Contribution Fund of Australia Limited)• Health Care insurance• Health Partners• HIF• Latrobe Health Services• Medibank• Mildura Health Fund• nib Health Insurance• Peoplecare Health Insurance• Queensland Country Health Fund Ltd• RACT Health Insurance• Lukes Health• Westfund Health

How to choose the best provider

As each policy is different, it’s important to do your research and ensure your chosen provider offers all the inclusions you require.

Choosing Hospital and Extras cover can be tricky – Canstar’s most recent Health Insurance Star Ratings for example, compares 628 health insurance policies from 24 providers. There are various levels of cover for both Hospital and Extras cover, depending on the insurer. The most common are a basic level, a medium level and a comprehensive level, as well as being able to opt for stand-alone Hospital and stand-alone Extras cover.

One of the biggest factors in choosing your obstetrics health cover is the level of coverage the insurer provides. If you have previously had a complicated pregnancy, or have any reason to expect complications, you’ll likely seek the policy with the widest possible cover.

The health insurance providers that Canstar assessed for its latest star ratings report are listed below:

Keeping in mind the cheapest policy isn’t always the best, Canstar’s Star Ratings methodology takes into account a number of factors including pricing and features. The 2016 National Winners for our Private Health Insurance Star Ratings were BUPA, HCF and Medibank. You can read more about the winners for each state and territory, as well as the full methodology here.

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Mind the gap: how do gaps and rebates work?

A gap payment, also known as an out-of-pocket expense, is the amount outstanding between what a hospital or specialist charges and what the combination of Medicare and your private health insurance fund covers. You, the patient, will have to pay this outstanding amount.

Gap payments can be hefty and inconvenient. Many people have been caught out at the worst possible time with a huge gap payment after a hospital procedure they believed they were covered for.

A gap can arise from:• The hospital accommodation costs• The fee charged by the medical specialists who support you

Essentially, most health insurance providers have agreements with both hospitals and medical specialists in terms of how much they will pay towards medical costs. If you use a hospital or doctor that either does not have an agreement with your health fund or charges above the amount that the fund will cover, you could end up paying a significant amount for your treatment.

There are ways you can narrow or avoid gap payments and get better value from your private health insurance. Talk to your health fund first and ask which specialists and hospitals they have a ‘preferred provider contract’ with. Using the doctors and hospitals that participate in your health insurance medical gap scheme can help to reduce any out-of-pocket expenses that you may be charged.

Also ensure you ask any medical specialist what their fees will be and how much of that fee will be covered by your private health insurance fund, so you can factor any costs into your baby budget. If your out-of-pocket cost is going to be significant, you may wish to discuss alternative medical specialists with your insurer.

What do I need to know about my health insurance excess?

Most private health insurers give customers the option of paying an excess in return for lower health cover payments. Generally the higher your excess, the lower your monthly payments. The excess is a lump sum amount you agree to pay to contribute towards your hospital treatment before your insurer pays your benefits. Excesses typically range between $0 and $1,000 depending on the policy. You will only ever pay an excess when you go to hospital. The way excesses are charged varies by provider, so it’s best to speak with your insurer for further details.

Plus baby makes three: how do I add a new child to my policy?

Once you’ve given birth to your first baby, it’s time to upgrade from a couples’ policy to a family policy and add your baby to your health insurance. Most family private health insurance policies offer free cover for children until they are at least 18 years old, and longer if they are still dependent (up to 21 years old). Every fund has different rules about covering newborn babies, so check with your health fund as early as possible.

You will just need to contact your provider via phone, email, online or in branch to alert them of the birth of your new child and add them to your policy. Some will ask to see proof of birth documentation, such as a birth certificate.

Families should look for a quality health policy to cover their entire family. Hospital cover is especially important for young children, as they are more likely to run into accidental injuries and childhood illnesses in their early years.

You should also seek a health plan that will remain affordable within your budget after your baby arrives. Avoid policies that include more than you need – after all, you’re probably nowhere near needing hip replacements or multi-focal lenses yet.

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Chapter 4:

Loss of IncomeThere are a range of factors that come into play when deciding whether to stay at home or go back to work, and knowing the financial implications will help. It’s essential to consider the availability of paid maternity leave with your current employer and your entitlement to government benefits.

Maternity leave: know your entitlements

According to the Fair Work Ombudsman, employees are eligible to access parental leave when a child is born or adopted. Parental leave entitlements include:

• Maternity leave• Paternity and partner leave• Adoption leave• Special maternity leave• A safe job and no safe job leave• A right to return to old job

Parental leave is leave that can be taken when:

• You give birth• Your spouse or de facto partner gives birth• You adopt a child under 16 years of age

You are entitled to 12 months of unpaid parental leave. You can also request an additional 12 months of leave, which your employer must approve.

All employees in Australia are entitled to parental leave. You are able to take parental leave if you:

• Have worked for your employer for at least 12 months:• Before the date or expected date of birth if you are pregnant• Before the date of the adoption, or• When the leave starts (if the leave is taken after another person cares for the child or takes parental leave)

• Have or will have responsibility for the care of a childIn terms of paid parental leave, you may be eligible for:

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Paid maternity or parental leave from your employer: This is entirely at your employer’s discretion, so if you’re planning to have a baby, be sure to read up on their parental policies.

Paid Parental Leave from Centrelink: This is available for the main carer of a newborn or newly adopted child. You must be on leave or not working to receive this benefit, and will need to pass both an income test and work test.

Dad and Partner Pay from Centrelink: This is a short-term payment (available up to two weeks) if you’re a dad or partner on leave from work to help care for your new child. To receive this you must be on unpaid leave or out of a job, and will need to pass both an income test and work test.

Parenting Payment from Centrelink: This is the main income support payment while you’re a young child’s main carer. To be eligible for this payment, you must be under the limits in the income and assets tests, and single and caring for a child under eight, or partnered and caring for a child under six.

Family Tax Benefit (FTB) supplement from Centrelink: This is a two-part payment that helps with the cost of raising children. To be eligible for the Family Tax Benefit, you must have a dependent child or full-time secondary student younger than 20 years of age who is not receiving a pension, payment or benefit such as Youth Allowance. You must also provide care for the child for at least 35% of the time and meet an income test.

• FTB Part A may be available to you if you care for a dependent child who is:• 0 to 15 years of age, or• 16 to 19 years of age, and• Is in full time secondary study in an approved course leading towards a year 12 or equivalent qualification• Has an acceptable study load, or• Has been granted an exemption

• FTB Part B gives extra assistance to:• Single parents• Non-parent carers such as grandparents, great grandparents• Couples with one main income

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Chapter 5:

Don’t forget about mum!Maternity wear

It’s easy to overspend on all those adorable little baby clothes, but many new mums forget to budget for their own clothes. Your body will likely change rapidly, and you may find you need a new wardrobe as early as 12 weeks into the pregnancy. As your belly continues to grow, chances are you’ll need to upgrade and upsize multiple times, making maternity wear something worth budgeting for.

As with everyday clothes, maternity outfits can vary in price depending on where you shop. You can pick up a basic nursing top from Kmart for as little as $10, or a pair of maternity jeans for $20; while a nursing/maternity dress from maternity specialist store GlowMama could set you back anywhere from $100 - $300.

Work out how much you can afford to spend on maternity clothes, then choose a savvy mix and match wardrobe, to get the best bang for your buck. Consider opting for maternity wear that provides easy access for breastfeeding, so you can continue to wear while nursing.

Get some TLC

Being pregnant can put a serious strain on your body, and it’s important not to forget about looking after yourself.

This can include making time for regular massage or acupuncture appointments, ducking out for a lunch-time pilates class to strengthen that all-important pelvic floor, or going along to calm birth and antenatal classes to prepare you for the actual birth.

As a rough guide, the costs for these services are around: • Pregnancy massage - $100 for one hour with Vibe Natural Health• Acupuncture - $93 for one hour with TLC Acupuncture Clinic• Pilates - $45 for a casual 45-minute class (Viva Physiotherapy)• Antenatal classes - Ranging from free to $500, depending on the hospital

Some private health insurers will cover a portion or all of the above costs under their ‘Extras’ cover, so it may be worth signing up a for a policy if you haven’t already. The waiting periods on these will generally be minimal, with some providers offering a promotional waivers on waiting periods for allied health services for new customers.

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Chapter 6:

Putting a price on childcareBefore jumping back into work, you will need to consider the cost and availability of childcare, your salary and subsequent tax bracket, and your entitlement to government benefits. Over the first 19 hours of work, for every dollar earned, 60 cents in the dollar is lost due to lower government benefits, higher personal income tax and child care8.

Cost implications aside, getting your new baby into childcare can be the biggest challenge. Some daycares will only accept intakes at certain times during the year, which may influence your decision on when to return to work. Others will require you to put your baby on a waiting list before he or she is even born to secure a spot.

What are my options?

Perhaps you’ve already got your baby on a waiting list for daycare, you’re struggling to secure a spot or you’re thinking that daycare may not be suitable for you. It’s important to understand the range of childcare options, which range greatly in cost and availability. They include:

Long daycare: Long daycare is generally provided in a building or part of a building that has been created specifically for use as a childcare centre. Centres usually operate between 7:30am and 6:00pm and offer professional care for children aged 0-6. Children are usually grouped in rooms according to age and developmental stage.

Some centres offer meals throughout the day including morning tea, lunch and afternoon tea, as well as nappies and wipes. Others won’t provide anything, requiring you to bring your own. The types of inclusions vary from centre to centre and cost is not always reflective of inclusions, so it is important to shop around before enrolling your little one.

Family daycare: Family daycare services offer flexible home-based education and care for children via a network of educators. This means the childcare is operated out of an educator’s home.

In-home care: In-home care is similar to family daycare, but the professional carer looks after the child in your child’s home. However, this option is usually far more costly. It is generally used for children in a remote area, children living with a disability, or for a parent who works during hours where mainstream childcare options are not available.

Nanny: There are a few different options for hiring a nanny; you can get a traditional nanny, a nanny/housekeeper or an au pair. A nanny will come to your house to look after your child during set hours, and can be shared with other families to reduce costs. A nanny/housekeeper may also also assist with other household chores such as vacuuming, mopping, sweeping and doing the family’s laundry. It is

8 AMP.NATSEM Income and Wealth Report, “Cost of Kids”, Issue 33, May 2013.

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worth noting childcare services providers such as home carers, nannies and au pairs must be covered by insurance and may require workers’ compensation or domestic worker coverage at a minimum.

Friends or relatives: If you’re lucky enough to have a friend or relative that can care for your child, then this is the much more affordable option. Many people will team up with a friend, and look after their children one day each week, in return for having their child minded another day.

To get an idea of costs, Huggies estimates9 :

• A nanny will cost $12-$25 per hour (live in) or $14-$35 per hour (live out), with an agency fee on top• Sharing a nanny will cost $12+ per family per hour (+ agency fee)• Long daycare (childcare centre) fees vary from $55 to $160 per day• Family daycare costs from $4.50-$8.50 per hour, depending on where you live and the service offered

Five ways you could minimise childcare costs

If some of those figures seem eye watering, here are some tips on how you might reduce your childcare costs:

1. Take advantage of the government’s Child Care Benefit and Child Care RebateThe Australian Government provides families with two types of financial assistance to help cover the costs of approved childcare – the Child Care Benefit and the Child Care Rebate. While the Child Care Benefit is based on family income, the Child Care Rebate is not income tested.

The Rebate helps families cover the out-of-pocket costs of childcare, by up to 50%. The annual limit is $7,613 per child.

You can choose to receive these benefits either directly as a lump sum - meaning you pay the full childcare costs upfront and Centrelink reimburses you regularly (either fortnightly, quarterly or annually), or you can opt for Centrelink to pay your childcare centre directly, reducing your upfront childcare costs.

Keep in mind that to receive the Child Care Benefit (CCB) or Rebate, you will need to be using an approved childcare service. Approved childcare is childcare that has been approved by the Australian Government for CCB purposes, because it meets certain standards and requirements.

2. Send your kids to daycare for more than one day This one might seem counterintuitive - surely sending your child to daycare more often will result in higher costs, right? While the overall cost will certainly be more, many childcare centres offer a per-day discount if your child goes to daycare for three or more days. For example, while long daycare at one centre might cost $120 per day for a single day, that could be reduced to $100 per day if they attend five days a week.

The fee structure will vary with each childcare centre, so be sure to ask about their fees and discounts before enrolling your child.

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3. Shop around and check your inclusionsAs mentioned above, childcare costs can vary significantly depending on the centre. While this is often linked to inclusions (whether the centre provides nappies, food and other amenities), operating hours and demand (often childcare centres in cities and other high-traffic areas will be more expensive), this isn’t always the case.

For example, in Brisbane’s Windsor suburb, daycare costs at two centres ranged from $92 - $135 per day. The most expensive centre at $135 per day required parents to provide food, nappies and wipes, while the least expensive was only a short drive or walk away, and provided children with all amenities and food for $92/day.

So when it comes to childcare, make sure you shop around to find the option that offers the best value for money and is most suitable to you. If you find one you like, get your name on the waiting list early to avoid disappointment, as spots are often snapped up quickly.

4. TelecommuteTelecommuting is a popular option for parents with young children at home, and is becoming increasingly available from employers in today’s digital environment.

Telecommuting, or working from home, is a great way to reduce on childcare costs, especially if you have older children that are able to entertain themselves or a workplace that is tolerant to flexible hours. Some mums and dads will opt to work from home on the same day, meaning they can share the responsibility for child-minding and working equally.

5. Lean on friends or familyIf you have a retired parent waiting to dote on their grandchild, or a stay-at-home friend that is willing to look after your baby once or twice a week, this can be a great option for reducing childcare costs. Some even opt to combine this option with telecommuting for a few hours a day, so they can get some work done at home, while the child is off having fun with a friend or relative.

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Chapter 7:

The cost of (not) vaccinatingVaccinations, while another cost to factor into your budget, may not be as costly as you might think. Most vaccines for babies and young children are funded (provided free-of-charge) under the Australian Government’s National Immunisation Program.

Immunisation is a simple, safe and effective way of protecting children against certain diseasesbefore they come into contact with them in the community. In addition, many doctors will bulk bill appointments for children under 12, meaning you won’t even be charged a consult fee.

There are some optional vaccinations such as the influenza vaccine or Meningococcal B, which aren’t included in the program, but are recommended by medical professionals for those at risk (this includes babies and young children). The cost of these ranges from about $15 - $100 per vaccine.

It’s also important to note that in order to receive the Family Tax Benefit Part A supplement and Child Care Benefit, your child needs to be up-to-date with their immunisation schedule or have a medical exemption if they are unable to be vaccinated. If you choose not to vaccinate your child or fall behind on their vaccinations, you could be refused any of these government benefits. Many childcare centres will also not accept unvaccinated children.

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Chapter 8:

Time for a holiday!Feeling exhausted from all this baby budgeting? Is your family in desperate need of a quick escape?

Many people avoid travelling with children or babies because it can seem overwhelming, but financially, travelling with a baby can be cheaper than you think.

Flights, for example, are extremely cheap for children under two, who just sit on the lap of an adult or in a bassinet provided. And don’t forget the added perks of priority boarding and seats with extra leg room to fit that bassinet. Many restaurants also allow children under four to eat for free, and older kids’ meals, even at fancy restaurants, don’t normally come with a hefty price tag.

So what do you need to think about when travelling with a baby? Below are some of the basic things you might need, on top of your regular baby-related items, and their respective costs:

This advice is general and has not taken into account your objectives, financial situation, or needs. Consider whether this advice is right for you. Consider the product disclosure statement (PDS) before making any financial decision. Consider the advice of your doctor of midwife before making a purchase decision. For more information, read Canstar’s Financial Services Guide (FSG).

We hope this guide has armed you with extra financial insights to help you plan for this exciting phase in your life. As Australia’s biggest financial comparison site, we invite you to visit us along your journey whenever you need a hand making purchase decisions for your family with confidence.

Item Cost Hire

Portacot

Car seat

Stroller

Formula holders

Baby carrier

$50 - $250 from baby shops, ranging in quality and functionality.

$150 - $600 for a convertible car seat from Baby Bunting

$20 - $400 for a stroller from baby shops

$3 from Kmart

$50 - $250 from baby shops

Roughly $30 per night for cot hire at a hotel

$11 - $50 per day from various rental car companies

$35 per week at Hire for Baby

n/a

$35 per week at Hire for Baby

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Your Baby Budget Checklist

This checklist will help you plan and track your expenses as you navigate the pre-conception, pregnancy and newborn phases ahead.

Pre-Conception

Pregnancy

Birth

Expense

Expense

Expense

IVF

Acupuncture

Medical costs

Pre-natal vitamins

Renovations

Health insurance policy

Maternity wear

Self-care for mum during pregnancy

Medical costs

Maxi pads

Medical costs

Car parking

Amount Spent

Amount Spent

Amount Spent

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New Born Phase

Expense

Family health insurance policy

Nursing bras

Blankets

Newborn clothing

Toiletries for baby

Nappies

Baby wipes

Car seat

Crib or cot

Pram

Carrier

Change table or equivalent

High chair

Breast pump

Nursing cover cloth

Bibs and burping cloth

Nail clippers for baby

Thermometer

Vaccinations

Amount Spent

Total: