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One of the main questions you may have when starting a family is “how much do babies cost?” According to research, it costs an average of $140-170i.

It could help to plan and have a family budget in place to help you better manage new financial responsibilities. These family budget tips may help you better plan for the future.

Tips for managing family finances

Medical expenses

Whether it’s ultrasounds, birthing classes, vaccinations or regular check-ups, one of the biggest expenses you may come across when having a baby is the medical costs. Many private health funds also have waiting periods before you can claim on pregnancy and birth-related costs, so it may be worth considering this as well when you’re planning your budget. Whether you choose to have your baby in a public or private hospital, it’s worth investigating if there are out-of-pocket costs, even with Medicare or private health insurance.

Likewise, consider doing some research if you want your child to be covered under a health insurance policy, as a single or couple policy may need to be extended to a family policy.

Other upfront and ongoing costs

Other costs that come with having a baby, are:

• car seat and stroller

• cot and mattress

• change table and high chair

• baby clothes

• food, nappies, bottles and formula

• childcare

Research your employer entitlements

Many organisations have their own parental leave policies, which may include various paid and unpaid parental leave entitlements for new mothers and fathers.

Speak to your employer to see if there is a scheme in place, and what they offer. Find out if you’re eligible for any annual, long-service or regular unpaid leave if you’re planning to take time off work.

Check the company policy around superannuation. Super generally isn’t paid when you’re on parental leave, so you might want to consider whether you’ll make additional contributions while you’re still working.

Government’s paid parental leave scheme

If you meet certain eligibility criteria, you may be able to receive additional support from the government’s paid parental leave scheme, which can be helpful if you are trying to balance your finances.

With the paid parental leave scheme, primary carers of newborn or adopted children can apply for parental leave payments from the government, which provides the national minimum wage for up to 20 weeksii. These payments can be received in addition to any payments your employer pays under its own parental leave policy if you’re eligible.

Investigate other government assistance options

You may also be entitled to other assistance such as Dad and Partner Payiii, which provides up to two weeks of government-funded pay, or the Family Tax Benefit, which helps with the cost of raising children. The government also provides assistance with childcare fees for certain eligible families.

Go to the Department of Human Services website to see what options are available.

Create a family budget

After you’ve considered the expenses you may have when you start your family, as well as any entitlements you may be eligible for, you can start a budget.

Account for existing day-to-day expenses, such as utility bills, groceries, petrol, insurance, rent or home loan repayments, and other debts you may be paying off.

Factor in any additional sources of income (such as investments), and whether family could assist to minimise expenses, such as childcare.

Prioritise your existing debts

If you have existing debts, like credit cards, personal loans or a home loan, consider how you can reduce these debts as much as possible before the baby arrives, as you may encounter some unexpected expenses along the way.

It might also be beneficial to think about:

• credit card fees

• consolidating debts into one if it means you’ll pay less in fees and interest charges

• pay off your home loan faster or refinance to reduce the loan payment amounts

• higher interest rates and added fees can affect monthly repayments, so shop around

Your will and broader estate plan

Starting a family is a big responsibility, and it means that you may need to put more thought and planning into what will happen to your little one if the unexpected happens.

Estate planning can be a good idea if you want to protect your family’s future. Estate planning includes more than just your will – it includes decisions around who will look after you and your child if you’re ever in a situation where you can’t make decisions for yourself, as well as documenting how you want your assets (which may include insurance and super) to be distributed should you pass away.

Money isn’t everything

It’s exciting to welcome a new addition to the family, but it can be expensive and overwhelming.

While it may be tempting to invest in the most expensive pram, baby clothes, or day care centre for your little one, it’s worth considering that it’s your love for your child, not the amount you spend on them, that matters.