The arrival of a new baby into the household can bring not only a change in lifestyle but also a change in family finances. These changes can impact the short-term financial situation of the household together with a long-term financial impact to the person taking time out of the workforce to go on maternity leave – usually the woman!
Women generally retire with 47%* less superannuation than men, and time out of the workforce is a major contributor to this fact. There are options and choices that can be made to lessen the impact of this statistic that include continuing to make superannuation payments a priority with maternity leave payments and if the option is available income splitting superannuation with your partner at the end of the financial year.
On the work skills front decide to ‘keep your hand in the game’ for at least a few hours a week. This can be achieved through a quick hand over at the end of the day when your partner comes home or using family support or childcare for a few hours. This time could be used to further develop your workplace skills, network or further training. A few hours spent each week undertaking a work-related task can also assist in lessening the disorientating effect of returning to work after what can be many months or even years absence. ‘Keeping in touch’ days are built into the government’s Paid Parental Leave scheme for this reason.
When planning your household budget, you may need to adjust to living on a single or reduced income. A good strategy to achieve this and save for a baby fund buffer is to commence living on your single or reduced income as soon as you are pregnant and still working, this way you can get accustomed to any adjustments you may need to make while saving the remainder of your income for a ‘baby cash fund’ to deal with cash emergencies that may arise.
Know in advance what your maternity leave entitlements will be and plan a budget accordingly. Take time to understand such variables as to whether you are eligible for Paid Employer maternity leave and/or 18 week parental leave from the government. While you may have a tight budget with a focus on essentials such as mortgage payments, insurances and utilities don’t forget to include concessional superannuation contributions.
While the above may be a lot to consider and implement, in the world of welcoming a new baby to your household planning your finances for this exciting and wonderful event might just be the easy bit…
