Starting a Family – Count the Costs First

Understanding the Costs of Starting A Family

Understanding the Costs of Starting A Family is an article written by Kristopher Meuwissen, Principal Adviser, Founder and Director at Wealtheon Financial Services.

The financial challenges of parenthood

Right now it is estimated that the cost for raising a child to age 18 is widely varied from $300,000 even up to $1 million. Whatever the true figure may be, any parent knows that it is a significant amount of money, especially if you are not prepared for it.

Short term financial issues

Regardless of whether the new addition to the family is carefully planned or a joyful surprise, often one of the first issues to discuss is the real impact of one partner stopping work or reducing their work hours.

Luckily, options exist to help parents, such as government support in the form of paid parental leave and the baby bonus, as well as employer sponsored parental leave. It is not always a matter of moving from two incomes to one, but eligibility for paid leave and its financial benefits does vary widely, making it important to assess the impact on the family’s regular income in each case.

Anticipating the drop in weekly household income is one thing; estimating how long it will be reduced is also important. A mother may be planning to return to work quite soon, perhaps for financial or career reasons. While that may restore the family income to its previous level, you might also need to calculate additional costs of that such as childcare.

Different questions are raised altogether when there are no immediate plans for a return to the workforce. In addition to claiming all your Centrelink parenting benefits and tax concessions, you may want to consolidate your debts and borrowings to match the tighter budgeting.

Adjusting your family and financial priorities to deal with your new challenges is a natural progression when your daily life starts to revolve around your new baby. It is good to know that by sitting down with an adviser it is possible to get a head start, before your time and energy are taken up with the physical demands of parenthood.

Here at Wealtheon our advisers have the experience to help you plan for these changes, work out how and when to make adjustments, and to assess and manage their financial impact. If there are tax benefits you can claim, your adviser can work with your tax professional to make sure you are getting the most out of your new situation.

Protecting your future

Taking the time to review your insurance needs with an adviser is a must. Making sure your future income stream is well protected through income protection, life and disability insurance is so important, especially if you plan to have one wage earner rather than two, or to take on new costs like childcare.

By taking this approach and getting advice, you will have recommendations on the most appropriate insurance policies for your situation, policies which match your needs and budget and which can be held through your superannuation fund to reduce the impact of premiums on your cash flow.

You can take advantage of our adviser’s knowledge to work out the best way to start saving and preparing for the cost of your child’s education, and we can help you calculate what you need to invest each year to reach your specific savings target.

You get a head start on the many options available to you by getting in touch sooner rather than later. Taking this important step provides you with an opportunity to go over your questions, aims and objectives with an experienced professional so that you can look forward with confidence to the pleasure and challenges of parenthood.

If you’re in this phase of your life you might also want to check out our case study of some of our amazing clients, Tim & Sally, who were just starting out their lives together when they got some financial advice to help them make sure they were on the right track. Read it here.

Have some questions? Want to know how it applies to you? Want a review of your personal situation? Click here to book a Free 15 Minute Discovery Session, give us a call on 1800 577 336, or email us at

Information on this site may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product.

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