Uncategorized

The pandemic has changed many aspects of our daily lives, and romance is no exception. While lengthy separations have led some relationships to end, other couples are choosing to move in together more quickly than they might have expected. If you’re planning on living together, you might be wondering whether to merge your finances. Combining money is a big step for any couple, and not something that has to be tackled all at once. There are several ways to share money as a couple, and you might like to take it in stages. Before you merge your finances It’s important to be honest, open and transparent about your financial situation and expectations upfront. Money can become a source of tension in relationships, often due to mismatched values, poor financial habits or financial infidelity. Before merging your finances, set aside a time to talk about your current financial situation, including any debts or bad spending habits. Discuss your shared goals and vision for the future. Put a financial plan in place to help you get there. And work out which approach to sharing money will work best for both of you, so that you can set up your accounts to manage household expenses. Also keep in mind that once you’ve been living together in a relationship for a period of time, you’re considered to have a spouse for legal and financial purposes. This can have implications for your tax returns, government rebates and benefits, and, in the event of a split, can affect how your assets are divided up. Ways to share money If you’re planning on moving in together, you’ll need to work out how you’d like to pay for your household expenses. There are a few different approaches to combining money, and each has its pros and cons. Here are some ideas to help you get started: Proportional method In this approach, each member of the couple contributes to household expenses in line with what they earn. For example, if one partner earns $100,000 a year, which is 66 per cent of the household income, and the other earns $50,000, which is 33 per cent of the household income they would each contribute accordingly. That means, if the monthly bills come to $3000, then the higher earning partner pays $2000 (66 per cent), while the other partner pays $1000 (33 per cent). Pros: In this scenario, both partners spend the same percentage of their income towards bills, expenses and entertainment, while keeping what’s left over for themselves individually. That means you can both enjoy a better lifestyle than you could if you kept your money separate. It also relieves the stress of trying to keep up with a higher earning partner, or ‘budget down’ to the level of the lower earning partner. Cons: One possible drawback to this method is that the higher earning partner could start to feel resentful about contributing more, or you could get into disagreements about whether an expense should be joint, or personal. Equal shares In this system, expenses are split down the middle, regardless of who earns what. You keep the rest of your income to spend how you like. That means you’re also responsible for paying down debts you’ve racked up on your own – your finances are essentially separate. Pros: This is a great option for people who value their independence, especially in the early stages of a relationship. Neither partner feels like they are contributing too much,or being subsidised. Cons: If there’s a big disparity in incomes, this can limit your lifestyle to that of the lower earning partner. It’s also not a realistic way to manage many of life’s major events, for example, if you want to buy a home you’ll need all of your borrowing power. Or, if one partner needs to take time off work to have children, you’ll need to reassess the arrangement. Going all in Another option is to combine all of your finances. Couples who use this method only have joint bank accounts and credit cards, shared loans and so on. Each partner’s income is deposited into a joint account, and all of your household and personal expenses are paid from a joint account. Pros: Both partners have complete transparency over the household finances. It’s also simple to manage, as you don’t need to worry about splitting bills. Having an overview of your whole financial situation can also help with financial planning and money management. Cons: This approach can cause friction if your values and spending behaviour aren’t aligned. One partner can become resentful of the other’s spending, or, disagree with individual purchases they want to make. As you can see, there’s no right or wrong way for couples to share their money. The most important thing is to keep talking regularly about your finances, and review and alter your approach over time, as your needs change. Source: FPA Money and Life

After another year of double digit growth, many first-time buyers have been left shaking their heads in disbelief. Even those looking to upgrade the family home are having to stretch their budgets further than ever. For many would-be buyers, the speed of house price growth is far outpacing their ability to save. It’s also outstripping wage growth by a significant margin. Wages vs house prices CoreLogic crunched the numbers and found that while wages have risen by 81.7 per cent in the past 20 years, the value of housing has increased by 193.1 per cent. The size of the gap depends on your location, but the trend is widespread. The difference was most pronounced in Tasmania, where prices have risen by 294 per cent in the last 20 years, compared with a 79.6 per cent rise in wages. The challenge for first homebuyers First homebuyers are facing the perfect storm of low-interest rates, low wage growth and rapidly rising prices. With interest rates at an all-time low, keeping your deposit in a savings account at the bank isn’t going to be much help. So, what can you do to increase your chances of getting into the property market? Should you give up and invest your savings instead, in the hopes of a good return? How to save a deposit First of all, it’s important to realise that while this problem is bigger than you, there are things you can do to help yourself get into the market. Don’t give up. There are options to help you get into your own home. If your ideal home is out of reach, consider expanding your criteria for where and what you’re willing to buy. Once you’re in the market, you can work on upgrading. Consider whether you can buy together with someone else, a sibling, partner or parent perhaps. And don’t forget to factor in government support, like the first homebuyer grant and stamp duty concessions. Once you know how much you’ll need for a deposit, create a realistic budget to help you manage your money. Save hard. Make manageable, consistent contributions to your savings from every pay cheque. Add your tax return and any bonuses that come along. Pretty soon, you’ll have a decent chunk of money put aside. Put your money to work for you You’ve managed to save $20,000 or more – good on you! With that much cash to work with, it’s time to put your savings to work for you. Here are a few options that could help increase your funds. First Home Super Saver Scheme (FHSSS) This scheme allows you to save a deposit through your superannuation fund. You can make up to $15,000 in voluntary super contributions each year, which can be withdrawn in future to purchase your first home. At the moment you can only contribute a total of $30,000, but that’s set to rise to $50,000 next July. This is not a straightforward scheme, so take your time to research it thoroughly. The potential tax savings are the main advantage. Your voluntary concessional contributions will be taxed at 15 per cent inside super, instead of your normal marginal tax rate. Once you decide to withdraw your funds, you’re subject to a withdrawal tax. According to the ATO, that’s calculated at your marginal tax rate, plus a Medicare levy of 2 per cent, minus a tax rebate of 30 per cent. Additionally, you’ll earn a return on the funds you’ve invested, but only at the shortfall interest charge rate, which is the 90-day bank bill rate plus three per cent. Still, that’s a lot better than most savings accounts right now. Keep in mind that there are strict rules around withdrawing your funds, and it can take up to 25 days for your money to be released. You may have to pay a 20 per cent tax if you sign a contract to buy or build before receiving your funds. Exchange traded funds (ETF) Given the difficulty of saving for a housing deposit in a low-interest, low-wage growth environment, is it time for more aggressive tactics? It’s often not recommended to invest your deposit savings in the share market, due to the volatility. In a negative growth year, the funds you invest could actually decrease in value, leaving you with less money for your deposit than when you started. However, if you have a longish investment timeline (5+ years), and don’t mind the risk, you might consider purchasing shares in a managed fund like an ETF. ETFs are baskets of shares that track an index, commodity, region or theme. You can choose how much risk you want to take on by investing in a high-growth (most risk), growth, balanced or conservative fund. The potential upside to share investing is the returns. The ASX S&P 200 has returned 5.87 per cent over the last five years, and 5.38 per cent in the last 10-years, which are both better than a savings account. High-interest savings account You can still find some high-interest savings accounts that are paying over and above the standard everyday account. The benefit obviously, is that your underlying balance isn’t at risk. Use a comparison site, or even better, call your bank and ask what they can offer you. Just be careful to check for fees and other conditions, which can eat into your balance. Term deposit In the past, this was a popular choice to help boost your savings. Term deposits pay you an agreed return, depending on how long you choose to invest your funds. You can invest for several months, or several years. However, with interest rates so low, the return on a 12-month term deposit is currently below one per cent. Look around, as you may be able to find something with a higher rate of return than your everyday savings account. For anyone looking to buy or upgrade their home, it will take hard work and determination to get there. Don’t be afraid to expand your criteria and … Read more

According to the ABS, some half a million people intend to retire within 5 years. While many Australians will remain working until they can access their superannuation savings and/or the Age Pension, some 32% of people choose to retire beforehand due to health reasons, retrenchment, or a lack of suitable employment opportunities. No one can predict the future. Unforeseen circumstances can strike at any time, so it’s best start your retirement plans early while you are young, healthy and earning an income. A well-structured retirement plan can guide you towards your dream retirement while giving you a sense of security and confidence about the years ahead. An effective retirement plan will outline how you can make the most of your money and investments today, so that you can afford the retirement lifestyle you imagine in the future. As retirement planning specialists, we can show you how to make your retirement goals a reality.  Even if you feel you have left it a little too late, it’s never too late to get started. For further information about how we can tailor an effective retirement plan for you, don’t hesitate to contact us today.

If you want to ensure you’re getting the right amount of super and not paying more in tax than you have to, this list is for you. What you need to know Your bank account details and tax file number You’ll need to give your bank account details to your employer if you want to get paid, so this’ll no doubt be high on your list of things to do. On top of that, you’ll need to provide your tax file number, because if you don’t, you may end up paying a lot more tax on the income you earn. If you need a tax file number, you can apply for one through the Australian Taxation Office (ATO) What super fund you’d like to choose Super is money set aside during your working life to support you in retirement. Further down, we’ll explain how to make sure you’re getting the right amount. Meanwhile, you’ll typically have a choice between your employer’s fund or a fund you select yourself. There are a number of things you’ll want to consider too, such as what fees you might pay, how the fund performs and your investment preferences, which could see you earn more or less money. In addition, super funds generally offer a few types of insurance cover, which you could pay for using your super money, so it’s worth looking into whether this is something you want now or possibly down the track. What tax you’re going to pay on the income you earn You mightn’t be pleased, but you’ll have to pay income tax on every dollar over $18,200 you earn. On top of that, many taxpayers are also charged a Medicare levy of 2%. As for how much tax you’ll pay, this will depend on how much you earn. If you’re lucky enough to receive an annual bonus, you’ll also pay tax on this. What tax you can claim back when tax time rolls around If you spend some of your own money on work-related expenses (uniforms, safety equipment, or education) there is some good news. At the end of the financial year, you may be able to claim some of this money back when you do your tax return. You’ll need to have a record of these expenses, such as receipts, but in some instances if the total amount you’re claiming is $300 or less, you may not need receipts. What’s in your contract and what you’re entitled to An employment contract is an agreement between you and your employer that sets out the terms and conditions of your employment. It’s a good idea to know what’s in your contract should questions ever arise around what you’re actually entitled to. Regardless of whether you sign something or not, your contract cannot provide for less than the legal minimum, set out in Australia’s National Employment Standards. While National Employment Standards apply to all employees covered by the national workplace relations system, only certain entitlements will apply to casual employees. How to read your payslip so you’re across potential errors Payslips have to cover details of your pay for each pay period. Below is a list of what a pay slip typically includes: Your before-tax pay (also known as gross pay) Your after-tax or take-home pay (also known as net pay) What amount of money you’ve paid in tax this financial year The amount of super your employer has put into your super fund HELP/HECS debt repayments (if you have an education loan). Meanwhile, mistakes can happen, so if anything doesn’t look right, chat to your employer first and if you’ve raised an issue you’re not satisfied with, you can also contact the Fair Work Ombudsman. How much super is coming out of your pay package and if it’s correct If you’re earning over $450 (before tax) a month, no less than 10% of your before-tax salary should generally be going into your super under the Superannuation Guarantee scheme. If you’re under 18, you’ll have to be working a minimum of 30 hours per week to qualify, and special rules may apply for certain job types and contractors. For this reason, it’s important you check your payslip and if something doesn’t look right, speak to your boss as soon as possible, or contact the ATO. How to budget and save so you can get what you want in life Budgeting may sound boring, but jotting down what money is coming in, what cash is required for the mandatory stuff and how much cash might be left over for your social life (or saving), could make a massive difference to what you do in life. If you’re paying off debts, or on a more exciting note, want to buy a car or go on a holiday, getting a grip on your cash habits early on could see you have a lot more fun!   Source: AMP

Retirement is an exciting time. It’s the long-awaited reward for a lifetime of work and, if you have the right plans in place, the chance to pursue your dreams free from money worries and concerns. Retirement means different things to different people. For some, it may mean traveling the world, or pursuing a previously neglected passion. While for others, it could mean spending more time with family or friends, volunteering or starting a business. Regardless of what retirement looks like to you, we believe the key to a successful retirement is careful planning. One way to get started is to visualize your ideal retirement and then consider the plans you’ll need in place to make it a reality. Making smart decisions about your money and investments while you are still working and earning an income is a critical success factor. As retirement planning specialists, we can help you to map out a retirement plan that aims to make your future goals a reality while also ensuring you can meet your current financial obligations and commitments today. We can also make sure you make the most of any government incentives along the way and any government payments you may be entitled to once you are happily retired. To find out more, please get in touch.

If there’s one thing the COVID-19 pandemic has shown us, it’s that the unexpected can happen at any time. And, while there are many things in life you can’t control, you can make sure you have enough funds put aside to help you get by. Here’s how to build your emergency savings, even on a budget. As anyone who lost their job overnight due to COVID-19 will tell you, it pays to have cash stashed away for a rainy day. An emergency can happen at any time, for any number of reasons. If it does, your emergency fund will provide a safety net to cover your living expenses until you can get back on your feet. It’s best not to turn to a credit card to get you through an emergency, as credit doesn’t replace your income. It just creates a debt that you’ll need to start repaying almost straight away, whether or not your income is back to normal. Anyone can start an emergency savings fund, even if you’re not a regular saver. Here’s how to build up your emergency savings, the smart way. Set a goal You’ll need to keep enough cash in your emergency fund to cover your living expenses for at least three to six months. For example, if your living expenses come to $3000 a month, you’ll need to keep at least $12,000 in your emergency fund. Plan how you’ll get there Next, think about a realistic timeline for achieving your goal. How long it will take depends on how much extra cash you’re able to put aside each week or month. For example, say you wanted to build your emergency fund within one year. If you needed $12,000 in your fund, that means you’d need to contribute $1000 a month, or roughly $230 a week. Does the figure seem realistic? If not, you can spread the contributions out over a longer time, or find ways to increase your savings. Finding extra pennies If money is tight, you’ll need to go over your budget with a fine tooth comb. Find every possible place where you could tighten up your spending and divert the cash to your emergency fund. Think about cancelling subscriptions you don’t use, or try negotiating a better deal on your services. Cut back on eating out for a while, or don’t buy any new clothes for a few months. Be ruthless to slash your unnecessary spending, so you can put the money towards your emergency fund. Save a percentage of your income Another option is to divert a set percentage of your income into your emergency savings, once your non-discretionary expenses have come out. Whatever you have leftover is your spending money for the month. For example, if you have $150 a week left over after expenses, you could contribute 30 per cent ($50) to your emergency savings fund. Reaching your goal Once you reach your savings goal, and you’re comfortable you can keep yourself afloat for three to six months, you can hit pause on your contributions. At this stage, you might want to divert the money you’ve been putting into your emergency savings into another type of savings, or even start an investment portfolio. Where to stash your emergency savings You want to keep your emergency fund in a separate online savings account that isn’t accessible via a bank card or credit card. Out of sight is out of mind, so keeping it at a different bank to your regular transaction account is even better. Don’t be tempted to invest your emergency savings. Investments by their nature increase and decrease in value over time. The last thing you want is to find yourself in a situation where you’re forced to sell down your investment at a loss, just so you can get access to your emergency funds. Similarly, cash is king when it comes to emergency savings. If you need quick access to the money, it’s easiest to withdraw cash from your bank account. How to rebuild after an emergency If a situation arises where you need to access your emergency savings, go for it, that’s what they’re there for. Once the emergency has passed, and you have an income to rely upon, you can simply top up the fund again and continue along your way. Source: Money and Life

With Aussies living longer than ever, you could be spending many happy years in retirement. But did you know that to maintain your standard of living, you’ll need around two-thirds of your pre-retirement income, for the duration of your retirement? It’s never too early or too late to start taking an interest in your super. Here’s what to focus on at each stage of life. In your 20s Many people join the workforce for real in their early 20s, making this a great time to get the super fundamentals in place. Here are the steps to take: Choose a superannuation fund At this age, there are many years ahead before you’re able to access your super (generally from age 65). Such a long investment timeline means you can consider taking on more risk, as your investments will have more time to recover from any market ups and downs. There’s lots to consider when choosing a super fund, and the level of risk you’re happy to accept is one factor. You’ll also need to consider what the fees are, and perhaps you’d even like to know what your money is being invested in. Consolidating your super If you’ve worked several part time or casual jobs in your teens and early twenties, chances are you may already have more than one superannuation fund set up in your name. Finding and consolidating all of your super into one account is fast and easy using the ATO’s online services. Simply login to your MyGov account, choose ‘ATO’ from the service menu (you’ll need to link it if you haven’t already), and then, once on the ATO site, select ‘Super’. Adding to your super With so many years to go before you retire, it’s worth salary sacrificing a little extra, and adding any windfalls like a bonus or tax return, into your super. The power of compound interest means funds invested in your 20s will be worth much more by the time you retire. In your 30s This is the decade when you’ll really start to see your superannuation take off. As your income rises, so too do your employer sponsored super contributions. This can work wonders for your super balance, especially if you’re able to salary sacrifice a little extra into your super each month. It’s a good time to conduct a super health check and review your strategy to make sure it’s working for you. Compare the performance of your super fund, and check whether you’re on track to having enough super to retire on. You might also like to review your investments with a financial advisor and put a financial plan in place. Personal insurance becomes much more important at this age, as your responsibilities grow. Many of life’s major events happen in your 30s, such as marriage, children and buying your first home! In your 40s With retirement starting to feel more real, your 40s are a good time to focus on paying down debt and ensuring your super balance is on track. Look into how much super you’ll need to retire and check whether you’re going to reach that figure. If not, consider making extra payments, and review your investment strategy with a professional. Your earnings are likely to peak sometime between 45 – 54 years, so you’ll have more income than ever. However, this is often matched by higher expenses (think kids, schooling and a mortgage) as well as unexpected expenses, like health issues and even divorce. So aim to live within your means and put aside a little extra for retirement. Remember, if you’ve taken time out of the workforce to care for children or family, you’ll need to be even more active with your superannuation once you return to work. The good news is you can make up the difference by salary sacrificing and making lump sum contributions to top up your super in later years. If you have any questions at all about preparing for retirement, it really is worth seeking advice from a professional.   Source: FPA Money & Life  

Spending more than what you intended on is a familiar scenario for many people entertaining kids, whether that’s at the movies (you swear you’re bringing your own Maltesers and drink next time), or sporting events (where you often fork out more on hot chips than you do on the tickets). While you know taking pre-packed meals, catching different modes of public transport and checking out free events in your local area are all good ways to cut back on spending, there are also a number of inexpensive ways you could have just as much fun at home at the fraction of the cost. Check out these family activities to do on a budget. Make a night in as fun as a night out The one thing a lot of people miss when it comes to a good family night in is that the kids’ interests are just as important as your own. That’s because your level of engagement will affect theirs, so if you’re going to fall asleep watching Frozen for the 67th time, maybe find something else you can do. Here are some ideas that hopefully everyone in the family can enjoy. Set up a dinner or dessert station The wonderful thing about food is most people love it – whether it’s a fat juicy steak or some kind of vegetarian meal with quinoa – eating is something the majority of us like doing together. So, if you want to keep the kids entertained, while helping them learn a new skill and reaping the culinary benefits at the same time, you could: Help the kids heat up some pizza bases in the oven and set up a station along the kitchen bench with different sauces, cheeses and healthy toppings, so everyone can make their own Help the kids make a giant pancake stack ahead of Saturday night footy (or whatever you’re into) – and get them to add food colouring so you can incorporate your team colours Help the kids make a barbecue delights metre board with a selection of home-made sausages and rissoles, with a variety of roasted potatoes and veggies to have on the side. Create your own gold class experience Line up a selection of healthy snacks, treats and popcorn across the table, and give everyone a cardboard cup so they can make their own munchies mix before the movie starts. Then throw as many pillows on and around the couch as possible, let everyone take their spots and turn the lights down. Have an outback adventure night If you’ve got a tent, pitch it in the backyard for the night and get the kids to help you pack a picnic to have outside as an early dinner. You don’t have to drive anywhere, book in, or share amenities. Meanwhile, if you don’t have access to a backyard, make your own lounge room retreat inside out of pillows, blankets and cushions. And, if you can’t roast marshmallows over a fire you can definitely add them to a hot chocolate instead. Host a no-instructions gaming event No one’s giving board games a bad rap, but they aren’t for everyone, particularly depending on how well people can read the instructions, follow the rules and remember them. A multi-player sports or action video game that someone is familiar with may be preferable. And, if you happen to have a mate with an older system, it might also be a chance to dust off some classics, like Die Hard Trilogy on PS1 or the original Mario Cart on Nintendo. If you do want to do something a little more traditional though, such as trivia or celebrity heads, check out your mobile app store as there are a variety of apps to make game time at home a lot simpler. Sing us a song, you’re the piano man Something else that may be just as popular as food when you’re trying to entertain and ensure everyone has a good time, is music. You could sit around the table making fruit skewers at the same time as you put a play list of family favourites together, or if you’ve got a few performers in the midst, you could pour a few red cordials and put on an in-house karaoke night. Buy a strobe light, you’re one step away from a dance party. Final thoughts A night in definitely has the potential to be just as good as a night out, particularly if you’re trying to cut back on costs. Not only that, you’ve got more time to relax and enjoy each other’s company as you can avoid the traffic, long queues, jacked-up food and beverage prices, and all the impulse buys you may fall victim too as you stroll via shopping malls, stalls and food stands. In the meantime, hopefully you’ve picked up a few good ideas for your next night in that you can enjoy as much as the kids.   Source: AMP News & Insights.

If you have been together for a while though or are edging on making a big financial decision together, having the money talk could make a big difference to whether you go the distance. Understandably, it may not be the easiest topic to broach, so here’s a bit of a checklist as to what you might discuss, depending on what you have planned going forward. Your views on cash management Talk to your partner about your views around spending and saving. Kicking off with a light-hearted conversation, without judgement, can often be a good place to start. You might even want to share some examples of things in the past that may have influenced your current views and behaviours. For instance, your last partner may have spent all their money on beer and takeaway food, while you were often left to cover their share of the bills. Sneaky spending habits if you have any More than one in four Aussies has lied or been lied to about money by a partner, with hidden debt and secret spending two common contributing factors. With that in mind, if there are a couple of common transactions you make that you know you haven’t always been forthcoming about (how many shopping purchases are you really hiding in the car or closet?), now may be a good time to get that out in the open. Your income, expenses, assets and debts Your financial situation is an important one to talk about because even if you’re both earning a decent income (and potentially have some assets behind you), big expenses and potentially thousands of dollars of debt between you may impact any plans you have in the short and longer term. The average credit card balance for instance is around $2,876 in Australia, not taking into account other loans people may have taken out, such as car loans, student loans and through buy now pay later services. Whether you’ve been paying your bills on time If you’ve got a credit card, personal loan, mobile phone plan or utility account, there’s more than likely a credit reporting agency out there that has a file with your name on it. This file, also known as a credit report, will summarise how good you’ve been at paying your bills and making your repayments on time. If you have a chequered history, your report mightn’t read particularly well, and this could affect your ability to borrow money for a range of things, which may include a house for the two of you. What’s on your bucket list now and down the track If one of you has plans to travel, buy property, get married or have children and the other doesn’t, this could raise issues (or perhaps opportunities) for further discussion. What a joint budget and savings plan might look like Committing to something that you both think is fair could go a really long way here. If you’re not sure where to start, a good first step might be drawing up what money is coming in, what money is needed for the mandatory stuff and what may be left over for your social life and savings. Your job security and whether you see a change on the cards If you’re on the verge of quitting your job or are aware of redundancies happening at work, this is probably worth flagging with your partner as well. Your contingency plan if one of you isn’t earning an income Approximately one in five Aussies has no emergency savings to keep them afloat when faced with unforeseen circumstances, so it’s probably worth talking about whether either of you have an emergency stash of cash, personal insurance, or anything that may help you get by through a tough period. If you don’t have a plan b, now might be the time to talk about how you can create one together. Plus, it may reduce the need to rely on high interest borrowing options, such as credit cards or payday loans, which can often be an expensive way to borrow. How you’ll divide costs and or repayments You may decide to tackle this 50/50 or proportionate to each other’s income. That is something you’ll want to nut out before you take on a big financial commitment together, like renting a property together for example. Potential risks that may arise if you merge your money If your partner defaults on a repayment, you may be liable for the amount owing, even if your relationship ends. On top of that, ignorance isn’t an excuse, so if you sign papers you don’t understand, you’re no less liable for any loans or guarantees you may have signed off on. With that in mind, it’s important both of you understand your responsibilities and consider whether you want to put anything you might agree to in writing. Source: AMP

Starting a family or growing one can be exciting, but it can also be expensive. Here are some ways to prepare yourself financially. 1. Make sure you’re across medical expenses Medical costs might include ultrasounds, birthing classes, special tests, vaccinations, and check-ups, so it’s worth jotting these down, so you’ve got an idea of everything that could be coming up. You’ll also want to consider whether you want to have your baby in a public or private hospital, as there may be out-of-pocket expenses with either option, even if you have Medicare or private health insurance. Many private health funds also have waiting periods before you can claim on pregnancy and birth-related costs, so if this is something you’re considering, you’ll want to look into this early. Meanwhile, if you want your child to be covered under a health insurance policy, you may need to do some investigating, as a single or couple policy may need to be extended to a family policy. Consider other upfront and ongoing costs There are things you may need to buy before the baby arrives, in addition to other things you might need on an ongoing basis. This might include things like: car seat and stroller cot and mattress change table and high chair maternity clothes, baby clothes and baby bag 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. If you’re unsure, speak to your employer to see if there is a scheme in place and find out what they offer as part of this. At the same time, you may also want to find out if you’re eligible for any annual leave, long-service leave, or regular unpaid leave, if you’re planning to take time off work. When you’re speaking to your employer, it may also be helpful to 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. Explore the government’s paid parental leave scheme 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 18 weeks. These payments can be received in addition to any payments your employer pays under its own parental leave policy, if you’re eligible. You can also apply up to three months before your child’s due date, which may help you to better prepare for your time off, as you’ll be able to choose when your paid parental leave period starts. For instance, you may choose to receive this money after you’ve received any employer payments you may be eligible for. Investigate other government assistance options Beyond the paid parental leave scheme, there’s a range of additional support options for families. You may be entitled to other assistance such as Dad and Partner Pay, which provides up to two weeks of government-funded pay, or the Family Tax Benefit, which helps with the cost of raising children. The Child Care Subsidy also provides assistance with childcare fees for eligible families. From 7 March 2022, families with more than one child aged five or under (in childcare) will also get a higher subsidy for their second child and younger children. For more information about payments and services to help with the cost of raising children, check out the Services Australia website. You may also be interested in whether you’re eligible for school subsidies. Create a family budget with the information you’ve collected After you’ve considered the expenses, as well as any entitlements you may be eligible for and how long you may take off work, it’s worth drawing up a budget and starting to put some money aside. When you do this, take into account any existing day-to-day expenses you might have, such as utility bills, groceries, petrol, insurance, rent or home loan repayments, and other debts you might be paying off. You may also want to factor in any additional sources of income (such as investments), and whether you have family that may be able to assist in helping you minimise expenses. For instance, they may provide babysitting for your children. Prioritise your existing debts if you can If you have existing debts, like credit cards, personal loans or a home loan, you may want to consider how you can reduce these debts as much as possible before the baby arrives, particularly as you may encounter other unexpected expenses along the way. Consider your will and broader estate plan If a little person is about to enter your life, who you want to take care of, thinking about your estate plan may also make good sense, noting this involves more than just drawing up a will. It’ll include 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. Remember that money isn’t everything If it’s your first baby, while it may be tempting to invest in the most expensive pram, baby clothes, or day care centre for your little one, it’s the love for your child, not the amount you spend on them, that matters. Source: AMP