The Cost of Starting a Family       By Melanie Homer Children. No one ever said having them would be cheap. Deciding to start a family is a big step, both emotionally and financially. Of course,

sometimes we don’t actually have the luxury of ‘deciding’ to start a family, it just sort of happens!

 

Very rarely will newly pregnant couples be able to look beyond the birth of their first child – it’s nature’s way of ensuring we actually want to have more children. As you cradle your newborn in your arms, you don’t envisage your little bundle of joy borrowing the car, starting high school or racking up vast debts at university.

 

Before you start your little family unit, it’s a good idea to take stock of what you could be up for financially. It probably won’t make any difference to your decision to start a family of your own but it’s always good to be a little prepared.

 

The paraphernalia of babies

 

For something so little, they certainly need a lot of stuff. Cots, strollers, highchairs, car seats, bottles, sterilizers, backpacks, bassinets, clothes, toys, nappies  – the list is endless. Remember, you don’t have to buy everything shiny and new. There are some great second-hand deals available. A lot of baby gear is in ‘as new’ condition, as it’s a common trait amongst first time mums to rush out and buy the biggest and the best of everything, only to find the expensive stroller/exersaucer/highchair doesn’t suit their needs. Check your local yellow pages for second-hand baby gear shops or go online.

 

There are various organisations that hire equipment your baby will only use for a few months, such as bassinets and baby capsules. Both Plunket and the Baby Factory hire baby capsules and snap ’n’ go wheels. 

 

However, it is worth spending money on the major purchases, particularly if you are planning on having more children. Buying a more expensive, good quality stroller and cot will hopefully ensure they last the distance.

 

One of the biggest outlays you will have to make for your baby is one that cannot be scrimped on – nappies.  Over the course of your child’s nappy-wearing life disposable nappies could cost you approximately $1000 per year. There are many online nappy companies where you can buy in bulk, which reduces the cost somewhat. Just be sure to check that the nappies you are buying are of good quality, otherwise it’s a false economy.

 

Another option that is having a resurgence in popularity is cloth nappies. Gone are the days of folded nappies held together with pins; the new generation of cloth nappies are just as good as disposables at keeping your baby dry. Plus they have the added bonus of reducing your carbon footprint. Although the initial outlay can be high ($100 – $1000), they can save you money over the years, especially if you’re planning on having more than one child.  

 

Talk to your friends with children and find out what they bought that was incredibly useful and what wasn’t. And don’t forget to borrow!  Newborn babies are very small for only a short time; they grow out of their clothes in a matter of weeks, if not days. Borrowing from friends and family can dramatically decrease your outlay.

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Childcare

 

After the mortgage, the biggest cost for working families is childcare. If you are planning on going back to work, cost-efficient and reliable childcare will be at the top of your list. Once you start looking at the costs involved you will sometimes find it is actually more effective, financially, to stay at home. Carefully weigh up both your emotional and financial needs to decide what is best for your family. There are many different options of childcare available. Daycare costs approximately $35 – $60 per day, and expect to pay from $15 – $25 per hour for a good nanny.  One of the cheaper options is for your child to be looked after in an educator’s home. There are usually three or four other children, the educators are carefully checked and they’re required to attend regular training development courses. Porse and Barnados are just a couple of the agencies that supply this service. Prices vary from area to area and range from about $5 – $10 per hour per child.

 

In July the Government’s 20 free childcare hours are supposed to come into effect for three and four-year-olds.  But don’t hold your breath. At this stage many centres are holding off on a decision to commit to the scheme, as they find it unworkable in its current incarnation.  

 

Education

 

Although state schools offer ‘free’ education, almost all seek parental contributions through donations. These can vary from about $40 – $400 for primary schools, and can rise to about $700 for some high schools. 

 

If you’d like your children to get through their tertiary education without racking up vast amounts of debt, it pays to start saving for it from birth. It may sound extreme, but certainly beats the idea of your child being saddled with a huge student loan. There are various funds that you can put money into, just remember you need to check the fine print carefully, as some won’t repay your full contributions if your child doesn’t attend a tertiary institute.

 

Setting up a savings account for your children is also worthwhile – start a small automatic payment in the early years and they’ll have a tidy amount by the time they hit university. In a recent report, Consumer Magazine recommended PSIS Dollars and Sense and Kiwibank First Saver accounts for under 12s. They both offer reasonable interest rates and no account fees.  PSIS has the added bonus of bi-monthly prize draws.

 

Insurance

 

With the arrival of children we also feel a greater sense of responsibility. There is now a little person who depends completely on us being around for the foreseeable future. What would happen if we were not around? How would your family cope if the primary income earner couldn’t earn?  Life insurance is an absolute must have for parents. It’s not just the primary income earner who should be insured, stay-at-home mums also contribute to the family income by bypassing childcare and other associated costs, so they should be covered as well. 

 

If you’re having problems there are many services that can help you with your family finances.  The Federation of Family Budgeting Services helps NZ families manage their money better – and it’s a free service. It also pays to check if you are entitled to some assistance. The income threshold has recently been raised and you might be surprised at what your family can receive.  Have a look at the Working for Families website for more information – www.workingforfamilies.govt.nz

 

Being fiscally prepared before starting a family is a great position to be in, but not always achievable. More importantly, remember to treasure every moment you have with your children, even though that may seem a hard task when you’re covered from neck to knee in sicked-up chocolate crackles. You’ll find one of the oldest clichés in the book absolutely true – they really do grow up so fast.

 

Useful websites:

 

Baby paraphernalia — www.trademe.co.nz

                                 www.thenappynetwork.org.nz

                                 www.nappies.co.nz

                                 www.wholesalenappies.co.nz             

 

Childcare —  www.porsenz.com