Birth of a child: Expenses during pregnancy and baby’s first year

Having a baby no doubt has its financial strains. Here’s how much it costs to raise a baby in its first year, along with some handy budget tips.

It’s a given that having a baby can cost parents thousands before they’re even born – and while it is an exciting time, it can also leave a noticeable hole in your wallet.

New research has revealed that in Australia, the total costs connected to pregnancy and a baby’s first year amounts to $5552 – which equates to one month’s pay for the average Aussie parent.

International e-commerce platform Picodi’s analysis team examined the expenses connected to the birth of a child from pregnancy clothes, hospital bags, household equipment and finances relating to bringing up the child in its first year of life.

Below is a breakdown of the seven category and their related costs.

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Expenses during pregnancy and a baby’s first year in Australia. Picture: Picodi.com

MATERNITY CLOTHES

Expectant mums will try to hold onto to their clothes for as long as they but eventually they will need to upgrade their wardrobe to accommodate their expanding belly. According to the report, with the average cost of basic maternity clothes amounts to roughly $700.

“The expanded kit includes some accessories which may be useful for a pregnant woman such as a special sleeping pillow, foetal heartbeat detector, or smart scale,” the report reads.

HOSPITAL BAG

This contains all the necessary items for a mum and newborn baby during their stay in a hospital from slippers, socks, towels, heat packs and toiletries. Depending on whether they have had the chance to pre-pack, some women will make do with what they have at home, while others may feel more comfortable in buying new, fresh items which has been given the average price tag of around $120.

HOME PREPARATION

Preparing a home for the arrival of a new family member often means heavy expenses. A cot, change table, high chair, bath and other baby care accessories – in total, the report reveals an average cost of $1375.

“In the advanced version, with things like baby monitor, electronic bouncer, bottle warmer, and other accessories, home improvements would cost around $2690,” it states.

PRAM/ STROLLERS

According to the report, a middle-of-the-range, 2-in-1 stroller and a car seat can set you back around $868, while those after a more high-end stroller, carrier and baby wrap are looking at an increase to $1748.

BABY CARE PRODUCTS

Usually this category is dominated by lots (and lots) of nappies. A yearly supply of toiletries, cleaning products and nappies can cost from $791 to $1059.

FOOD COSTS

For the first year of a newborn’s life, the cost of food makes around one-fifth of all the expenses ($915). But for high-end food it hikes it up to about $1097.

CLOTHES

When choosing baby clothes, parents often find it hard to resist the urge to buy another cute T-shirt or lovely shoes. Even with a more sensible approach, baby clothes cost up to $800 during the first year.

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Picture: Picodi.com

BUDGET TIPS

According to the Australian Bureau of Statistics, the average net monthly wage in November 2019 was $5409. So, based on Picodi’s figures, the extra costs of pregnancy and having a baby (not included doctor’s or hospital fees) is equivalent to around a month’s pay.

It is important to note that in Australia there are various government benefits for new parents such as the family tax benefit which may include a one-off lump sum of newborn upfront payment or the parental leave pay.

If you want to plan ahead and avoid the financial strain and shock of baby expenses, finder.com has recommended three handy tips – a starting point snapshot, trimming the budget and savings plan.

“In order to really comprehend what your financial situation will look like after your baby is born, it’s vital to have a clear idea of where you stand right now,” a Finder report states. “For this reason, you should sit down and write out your current household income and expenses. “Include any form of income that currently makes its way into the house and be brutally honest about your expenses.”

Before baby is born, it’s quite normal for many people to spend money on things they want. However, once your new family member arrives your costs will change dramatically.

“No matter how realistic you think you’re being with your baby costs, add a little more on anyway. Even the most frugally vigilant parents end up spending a lot more than they realise on baby stuff.”

No matter when your baby is due, it’s never too late to start a savings plan, according to Finder, which explains the point of a money plan is to help you find the cash you need to start buying baby supplies and furnishings.

“The key to getting your savings plan right is to work out approximately how much cash you think you’ll need to buy all your baby supplies,” the report says.

“Then work out ways you can potentially save money on your purchases and get the same items at a reduced cost.”

According to the comparison site, once you have factored in everything, not just the seven items previously detailed, it’s estimated most parents spend approximately $10,000 on their baby in the first year.