The cost of having a baby
Congratulations, you’re having a baby!
Or perhaps, you’re thinking about the costs before you start trying. In that case, congratulations, you’re being financially responsible!
The tough news is that Plunket estimates that the cost of raising a child can be as much as $16,000 per year. However, you genuinely cannot put a price tag on that kind of love.
That said, it’s best to know what’s coming so you can prioritise some bills, set some money aside, and prepare for your (much-loved-yet-somewhat-pricey) little Kiwi. According to the OneChoice Kiwi Parenting Report 2024, almost everyone (89% of households) is being impacted by the rising cost of living, so some careful financial preparation could go a long way.
Hey, at least we can be grateful that we have access to free maternity care!
Key costs of having a baby
Those adorable tiny hands won’t be reaching for your credit card for a while yet, but in the meantime, here are some of the key costs you can expect.
Hospital and delivery costs
We can grumble and groan about some things, but the price of going to the hospital is not one of them. All of your maternity care and delivery costs are covered under the New Zealand health system (provided you are a citizen or permanent resident or meet other eligibility criteria).
Keep in mind, you’ll be expected to pay out of pocket costs if you opt for a private obstetrician or private sonographer instead of the public health route.
Plus, you’ll probably have to pay for parking at the hospital too. These rates are usually universally grumble-worthy.
Getting set up at home
There’s quite the list of basics you’ll need to prepare for the baby at home, including:
- A crib, including mattress and bedding
- A baby monitor
- A pram
- Burp cloths
- Baby clothes including bibs
- Nappies. Piles and piles of nappies.
- Bottles and a steriliser
- A change table with wipes, wash cloths and rash cream
- A car seat
- All of the adorable tiny toys, books and teddies this side of the equator
Some of these items are decently priced, whereas others could be into the thousands. For example, bedtime supplies (including the cot, mattress, baby monitor, etc) are typically almost $1,300 on average. Prams can cost around the same, or more, while car seats are typically in the hundreds when buying new.
Ongoing childcare expenses
After all the excitement of the birth and those first magical, sleepless weeks (or months), there will be a number of ongoing childcare costs to consider.
Some estimates suggest that a medium-budget spend would sit at around $300 per week to raise a child, whereas a high-budget spend would be around $400 per week on average.
Childcare can be the biggest cost by a country mile, at approximately $3 to $8 per hour, although this varies a lot from city to city. Perhaps unsurprisingly, New Zealand has one of the highest childcare costs in the Western world, with a typical couple.
Tips for financial planning for a baby
Game faces on. A baby is a blessing to be sure, but it’s also something that will take a little saving and a lot of planning.
Crafting a baby budget
Crafting a baby budget isn’t quite like crafting a normal budget, because you can expect that at least one parent will take time off work – albeit with some kind of parental leave payments.
Starting a financial plan for building a family begins with getting a good grasp of the situation. That means exploring your leave and entitlement benefits, looking at your current savings, figuring out how much you’ll have coming in once the baby arrives, and determining what you’ll need to buy (and which of those things can be purchased second hand).
Putting money aside ahead of time could be a good move to help cover the initial costs, then setting a monthly baby budget for ongoing costs can help to keep you on track so you don’t overshoot.
Side note: If anyone figures out how to save up on sleep ahead of time, please let us know.
Government assistance available for families
Keep in mind, you also don’t have to do it all alone (although you might not have too many volunteers rushing for nappy duty).
There are quite a few programs set up to help manage the costs of raising a child, so be sure to find out what’s available and apply for the programs you’re eligible for.
These include:
- Paid parental leave: You may be eligible for 22 weeks of paid parental leave, depending on how long you’ve been employed for and what your employee offers.
- Working for Families: This program provides additional support through tax credits for low- and middle-income families.
- Best Start: This is technically part of Working for Families, however, the first year is not income tested. In other words, any family is eligible to receive up to $60 per week for the first year.
- Early Childhood Education (ECE) Subsidy: For kids aged 3, 4, or 5, any ECE program is subsidised for up to six hours a day and up to 20 hours per week.
- Childcare Subsidy: Eligible families may be able to receive a subsidy for up to nine hours of childcare per week, or more if you’re working or studying.
- Accommodation Supplement: Eligible families can receive a weekly payment to help with rent, board, or home ownership costs.
Future-proofing your family
Financial planning and budgeting aren’t the only adulting tasks you’ll tick off when you have a baby. Typically, many parents will also make a Will around this time as it’s such a major life event, and it is great to have your wishes and plans outlined now that there’s another little person to consider.
That can also mean setting yourself up with OneChoice Life Insurance. In our OneChoice Kiwi Parenting Report, we found that financial stability and providing for a child’s future was the number one concern for parents (59%). So, by getting geared up for life’s hurdles, this kind of insurance may help you focus on enjoying every day.
The information provided in this article is general information and shouldn't be relied upon as legal advice or as a substitute for legal advice. If you have legal questions you should contact an appropriate professional.
27 Aug 2024