Frances Cook: The money changes I've made for having a baby

A baby comes with big changes, many of them powered by money. Photo / file

OPINION:

My spare bedroom is a mess.

In a few more months, it will become a nursery. But for now, it's a shrine to what will soon be my former life, filled with old belongings I'm selling online to make extra cash for the new person who will live in the nursery.

As someone who's part of the post-Covid baby boom, preparing to become a first-time parent, it's exciting but also nerve-racking.

Exciting, well, for obvious reasons. But nerve-racking because having a baby comes with a lot of change, and much of that change is powered by money.

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In many ways in New Zealand, we're lucky, including with medical expenses. Most women will sign up with a midwife, give birth in a hospital, and not worry about paying a cent.

Children also get free health checks, including free Plunket nurse checks, free basic dental treatment until they turn 18, and free B4 school checks on things like their sight and hearing.

But even with that type of help available, Plunket estimates a baby can cost you as much as $16,000 a year.

The biggest part of that figure is childcare, followed by bedtime supplies like a cot and mattress, then travel supplies like a stroller and car seat.

Not to mention nappies – nobody wants to be dealing with them, and then they have the nerve to be pretty expensive, to boot.

While we have decent maternity leave in New Zealand, these costs still come at a time when you'll likely be facing a drop in income.

You get six months of paid parental leave, with the option for another six months unpaid. Even for the paid part, the payments are capped at $606 per week, which for some people is a drop in income.

This is why it's a good idea to prepare financially by doing things like paying off credit cards and creating a cash buffer in your savings account.

Many experts will recommend practising living off one income during pregnancy. This way you get an idea of what your financial limits are, and any successful savings are stashed away.

If that seems impossible, don't panic. Any reduced budget that you can practice will be helpful, and help build up your spare cash. You don't have to slash spending by 50 per cent straight away.

As with everything money, start where you can, then see if you can go any further.

Besides the day-to-day budgeting, there's also the issue of your own mortality to face.

You may be bringing a new life into the world, but this raises the grim prospect of what might happen to them if you were to snuff it.

Though I strongly believe that you don't magically transform into A Mature Adult once you have a child (I've too many friends who are parents to still believe that myth), there are some adult things you want to get organised now that someone will be depending on you.

A will is important, as the default laws are often not what people expect, and the necessary arrangements can take a long time to organise without any input from you beyond the grave. Think about who you want looking after your little one, and where you want any of your money to be sent.

A legacy binder is also worth considering. That's a document of any assets, investments, insurances and where to find them all.

Don't assume people are listening if you just tell them verbally. People are terrible for not listening during the most important of conversations.

Write it down, then put it somewhere very safe.

It's a lot of change, and it's easy to get caught up in the emotions of it all. Everyone wants to be a good parent, and so there are plenty of ad campaigns telling you that you'll only succeed with their product.

Tough luck for those companies. I've already dived into Facebook parents groups for secondhand baby clothes and Trade Me for change tables.

The only things I plan to buy new are a cot and a car seat, for safety reasons.

If I'm lucky, I'll be able to fund a good chunk of it from my messy spare room. It's currently full of old clothes that I know I won't wear again, random electronics that were chucked in the back of a cupboard, tools from the garden shed that we didn't end up using.

We need the space now that there'll be a third, small person in the house. So if I'm getting rid of it anyway, I'm going to see how much of that stuff can be turned back into cold hard cash.

So far I'm up to $393, and I'm still finding new things around the house to declutter and list online.

So that should sort some nappies, at least.

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