Budgeting For a Baby in Australia

Becoming a parent is an exciting, life-changing experience – but it also comes with new financial responsibilities. For young parents (or parents-to-be), planning ahead with a solid budget can make the journey much smoother. In this guide, we’ll walk through friendly, practical tips on budgeting for your baby in Australia. From key financial planning steps and government support schemes to typical baby costs and money-saving tools, we’ve got you covered.

Start Early: Planning for Baby Expenses

It’s never too soon to start preparing financially for your new arrival. During pregnancy (or even while trying for a baby), take time to review your income, savings, and spending. Create a baby fund in your budget and begin setting aside money each pay cycle for upcoming expenses. Even a small regular contribution can add up by the time your baby arrives.

Also consider how your income might change. Many families see a temporary drop in income when one parent goes on parental leave or reduces work hours. Planning ahead for this change is crucial. If possible, live on a reduced income for a few months before the baby is born – this helps you practice living on one salary and lets you save the rest. It can be tough at first, but it’s a great way to build a buffer for when bub arrives. Finally, talk openly with your partner about finances: decide how you’ll cover bills, whether you need to cut any non-essential expenses (streaming services, dinners out, etc.), and set some shared savings goals (like an emergency fund or future school savings).

Know Your Support: Australian Government Benefits for New Parents

One of the advantages of having a baby in Australia is access to various government support programs. Make sure you’re aware of what you’re eligible for – these payments can significantly ease the financial pressure of a new baby. Here are the key ones to know:

• Parental Leave Pay (Paid Parental Leave) – This is a government-funded paid leave scheme for eligible working parents. It provides income while you take time off work to care for your newborn. In 2025, Parental Leave Pay offers up to 24 weeks of pay at the national minimum wage (around $948 per week before tax). This can be shared between parents; for example, dads or partners can take some of these weeks (previously, there was a separate “Dad and Partner Pay” of 2 weeks, now combined into the one parental leave scheme). To qualify, you need to meet work and income tests and be the primary carer of a newborn or newly adopted child. It’s a good idea to plan how you’ll use this paid leave alongside any employer-provided maternity or paternity leave.

• Family Tax Benefit (Part A & B) – Family Tax Benefit (FTB) helps with the cost of raising children. It’s split into two parts. FTB Part A is a payment per child, available to eligible families depending on your household income and the number/age of children. FTB Part B is an extra payment for single parents or families where one partner has a low income (for instance, if one parent stops working or works only part-time to care for the baby). These benefits are usually paid fortnightly and can amount to a few hundred dollars a fortnight (the exact amount varies with your income and kids’ ages). It’s worth submitting a claim to see what your family can get – even if you think you earn “too much,” you might be eligible for something, especially after one income reduces.

• Newborn Upfront Payment and Newborn Supplement – These are one-off payments for people who qualify for Family Tax Benefit and are not receiving Parental Leave Pay for the same child. The upfront payment is a lump sum (around $600+ per child), and the supplement is an additional payment spread over the first 13 weeks after birth (up to about $2,000 for your first child, lesser for subsequent children). Essentially, if you’re not using Paid Parental Leave, this is the government’s way of helping with initial baby costs via the family payment system.

• Child Care Subsidy (CCS) – Eventually, many parents return to work or study and need childcare. Australia’s Child Care Subsidy helps cover a portion of approved childcare fees. The subsidy percentage depends on your family’s income (lower-income families get a higher percentage, up to 90% of fees, and it tapers down as income rises) and your recognised activity (like work or study hours). The subsidy is paid directly to your childcare provider, reducing the fees you pay. Why is this important for your budget? Because childcare can be expensive (often $100+ per day in city centres). With CCS, your out-of-pocket cost might drop considerably – for example, instead of $130 a day, you might end up paying $20–$60, depending on your subsidy rate. Be sure to factor childcare costs (net of subsidy) into your family budget if you plan to use daycare or family day care in the future.

• Other Supports – Depending on your situation, you may be eligible for additional help. For instance, if you’re on a low income or not working, check if you qualify for the Parenting Payment (a fortnightly Centrelink income support payment for primary carers of young children). If you rent, adding a child to your household could increase your Rent Assistance. Having a baby also usually entitles you to a Medicare Child Health Care Card (if on family payments) which can give cheaper prescriptions. Don’t forget to register your baby with Medicare as well – Australia’s public healthcare means most standard medical costs for babies (maternal health nurse visits, vaccinations, GP check-ups) are free or bulk-billed. This is a huge relief for the budget! Always check the Services Australia website or call Centrelink to see the latest eligibility rules and how to claim these supports.

Baby Essentials: Typical Costs to Expect

Every parent quickly learns that tiny humans come with a list of not-so-tiny expenses. While every family’s situation is different, here are the common baby-related costs you should plan for, and some typical price ranges in Australia:

• Nappies and Wipes: Newborns can go through 8–12 nappies a day (yes, really!). Expect to spend roughly $80 to $120 per month on disposable nappies and baby wipes, depending on the brand and buying in bulk. Over a full year, that’s around $1,000+ just on nappies. You can save money by watching for supermarket specials or buying generic brands. Some parents opt for cloth nappies – the upfront cost (perhaps $300–$500 for a set) is higher, plus extra laundry loads, but it can save money in the long run especially if used for multiple children.

• Feeding: If you are breastfeeding, the direct costs are minimal (maybe a breast pump or nursing pillow, and extra groceries for Mum’s appetite). If you use formula, budget for formula powder, bottles, and sterilising equipment. Formula can cost around $20–$30 per tin, and an older baby might go through 1–2 tins per week, so this could be about $100+ a month for formula. As your baby grows, they’ll start eating solids (around 6 months). Baby food costs can be kept low by making your own purees from regular groceries (blending veggies, fruits, etc.). Even store-bought baby food pouches and cereals might add $20-$50 a month to your grocery bill during the second half of baby’s first year.

• Clothes and Baby Gear: It’s hard to resist adorable baby outfits, but remember they outgrow clothes fast. Realistically, you might spend $50–$100 a month (or more) on baby clothing in the first year if buying new. Save by using hand-me-downs from friends or family, shopping second-hand (Facebook Marketplace, Gumtree, local op shops, and baby markets often have barely-used baby clothes for a fraction of retail prices), and not over-buying (you’ll discover babies often live in the same comfy onesies most of the time!). Aside from clothes, there are the one-off gear purchases: nursery furniture and equipment. Big-ticket items include a cot and mattress (new ones can range from $300 to $1,000+, but there are affordable options around $200), a car seat (good quality convertible car seats start around $300 and up – and note, it’s important to buy a new car seat or one whose history you know, for safety standards), a pram or stroller (anywhere from $250 for a basic model up to $1,500 for luxury brands; you don’t need to splurge if it’s out of budget – find something safe and functional, or look for second-hand bargains). Other handy items include a change table or change mat, baby carrier, high chair (by 4-6 months old), and a baby monitor. You can absolutely get these items on a budget by looking for sales or second-hand. Many Australian parents use local buy/swap/sell groups to find cheap baby gear. Just be mindful of safety – for second-hand items like cots or prams, ensure they meet current safety standards.

• Healthcare: Luckily, Australia’s healthcare system covers most essential medical costs for babies. Standard check-ups with your GP or child health nurse, as well as the scheduled immunisations, are generally free. However, it’s wise to budget a small amount for baby healthcare needs – say $20–$50 a month – for things like infant paracetamol, doctor’s visits that might not be bulk-billed, or occasional specialist appointments. If you have private health insurance and want to add your baby to the policy, inquire about any increase in premiums. Also factor in any prenatal classes or postnatal support (for example, some parents hire a lactation consultant or attend baby first aid courses), which can cost a few hundred dollars in total. These aren’t ongoing expenses, but they might crop up in the first year.

• Childcare: While not all new parents will use childcare in the first year, it’s often one of the biggest expenses once parental leave ends. In Australian cities, daycare fees can range from about $100 to $180 per day before the Child Care Subsidy. Let’s say the fee is $130/day and you need two days a week of care when you return to work. That’s $260/week, which is over $1,000 per month. The Child Care Subsidy will likely cover a percentage of that – how much depends on your income (for example, a middle-income family might get 50% subsidy, meaning they’d pay $130/week out-of-pocket in this scenario). Be sure to check your subsidy entitlement and include the net childcare cost in your budget. Also remember there can be upfront costs like daycare enrollment fees or buying baby’s food and nappies for daycare (some centers provide these, others require you to bring them).

  Pro tip: Start researching childcare early, even while you’re still pregnant, if you think you’ll need it. Waiting lists for good centres can be long, especially for infants under 12 months. Knowing the likely cost and securing a spot will reduce stress later on.

• Other Essentials: Don’t forget miscellaneous items in your baby budget. This could include nappy bag and accessories, a play mat or bouncer, toys and books, and maybe adjustments to your home (safety gates, baby-proofing supplies as they get mobile). Individually these things aren’t too pricey – you might spend a couple of hundred dollars over the course of the year on toys, books, and safety gadgets. Libraries and toy libraries are fantastic free resources: you can borrow baby books and even toys, which saves money and clutter. Also, consider ongoing costs like increased household expenses: you might see a small rise in utilities (more laundry, heating or cooling the home to keep baby comfortable), and perhaps fuel costs if you’re driving more (to appointments, to settle baby to sleep, etc.). These are small tweaks, but they do add up. Allocating, say, an extra $50 a month for general household increases can create a buffer.

Example: A First-Year Baby Budget Breakdown

To put those costs in perspective, here’s a rough sample budget for baby’s first year. Remember every family is different – use this as a starting point and adjust to your circumstances:

• Upfront Setup Costs (one-time): Cot & mattress ($400), Car seat ($350), Pram ($500), Other gear like high chair, changing table, etc. ($300). Total upfront $1,550. (Note: You could halve this or better by sourcing second-hand items or receiving hand-me-downs from friends and family. It’s very possible to get your initial setup for a few hundred dollars if you’re thrifty.)

• Monthly Ongoing Costs:

  • Nappies & Wipes: $100

  • Formula & Baby Food: $80 (could be $0 if exclusively breastfeeding and making purees from family meals)

  • Clothing & Linen: $50 (some months you buy nothing, then you stock up when baby hits a growth spurt)

  • Health & Toiletries: $20 (baby medicines, creams, etc.)

  • Toys & Miscellaneous: $30

  • Childcare: $0 during parental leave; then potentially $500 (for a couple of days per week, after subsidies) once you resume part-time work.

  • Total per month: roughly $280 without childcare, or $780 with part-time childcare.

If both parents are home and no childcare is used in the first year, you might be looking at around $300–$400 extra spending per month for the baby. Once childcare or a return to work comes into play, the family budget needs to absorb those fees (which is why it’s so crucial to plan ahead and make sure the decision to return to work makes financial sense after accounting for childcare costs).

Also keep in mind, some baby costs are temporary or will fluctuate. For example, the cost of nappies and formula is highest in the first 6–12 months; later on, you’ll spend less on nappies as they toilet train (but not for a couple of years) and formula will be replaced by normal groceries. Childcare might increase if you move to more days or if subsidies change. It’s a dynamic budget – be ready to adjust as your child grows.

Tips to Save Money When Raising a Baby

Budgeting for a baby doesn’t mean you have to feel deprived. It’s about making smart choices so your dollars go further. Here are some practical tips to help you save money (and stress) as new parents:

• Embrace Second-Hand: Babies outgrow everything so quickly that many items barely get used. Take advantage of hand-me-downs and second-hand sales. You can find excellent condition baby clothes, toys, and even furniture through friends, family, or online marketplaces. Join local parenting groups or buy/sell/swap pages – often you can even find freebies from parents looking to declutter. (Always be mindful of safety for second-hand prams, car seats, and cots; ensure they meet current standards.)

• Budget Before Buying: It’s easy to get caught up in buying the “best” or cutest baby gadgets. But try to separate needs from wants. Make a list of essentials and budget for those first. For non-essentials, wait until after baby arrives – you might realise you don’t need a wipe warmer or the fanciest swing. When you do need to buy items, shop around, compare prices, and look for sales. Many big retailers (Big W, Kmart, Target, etc.) offer affordable baby items that do the job without the designer price tag.

• Plan Meals and Groceries: With a new baby, time becomes precious – which means takeaway food can be tempting (or even over-reliance on expensive snack foods when you’re too tired to cook). To save money, try meal planning and cooking in batches. Before baby comes, you might even fill your freezer with some home-cooked meals. After baby arrives, consider easy dinner options that are healthy and cheap (hello, slow cooker!). Also, if formula feeding, buying formula and baby food in bulk or on special can save a lot over the year.

• Use Free Activities and Resources: Babies don’t need expensive classes or outings, especially in their first year. Take advantage of free activities: local playgrounds and parks, “rhyme time” at the public library, community parents’ groups (often organised through local councils or maternal health centres in Australia). These not only entertain your baby (or probably more accurately, they’ll nap through it!) but also give you a chance to meet other parents – all without costing a cent. Save the pricy baby gym or music classes for when they’re a bit older (if at all).

• Watch Out for Hidden Costs: Be mindful of little expenses that can sneak into your budget after baby arrives. For example, more frequent drives (to settle baby or visit relatives) means more petrol; keeping the house comfortably cool/warm might increase energy bills; or you might find yourself doing online shopping during late-night feeds out of boredom! Set small limits – e.g., allocate a bit more to utilities and be conscious of online impulse buys (maybe leave items in your cart overnight before deciding). Sometimes just being aware helps curb unnecessary spending.

• Lean on Your Community: If you have family or close friends nearby, don’t be shy to accept help – whether it’s babysitting for an hour (saving on hiring help) or receiving cooked meals after birth (saves grocery money and time). Community organisations can also be a support; for instance, the Australian Breastfeeding Association offers free counselling and pump hire for members, and some local councils have toy libraries or cloth nappy rebate programs. These resources can indirectly save you money while also providing support.

Budgeting Tools and Apps for New Parents

Managing a household budget with a new baby in tow can be challenging, but fortunately there are tools to make it easier. A great place to start is the ASIC’s MoneySmart Budget Planner – this is a free online tool from the Australian government that lets you input your income and expenses to create a detailed budget. It’s very handy for visualising how your finances will look once the baby is born. You can plug in changes like reduced income (during parental leave) and new baby expenses, and see how your cash flow pans out. The MoneySmart website also offers a simple budget spreadsheet and lots of tips for families.

Beyond that, there are plenty of smartphone apps that can help track spending and keep you on target. Some popular budgeting apps used in Australia include WeMoney and Goodbudget. WeMoney is an Aussie-based app that connects to your bank accounts, automatically tracks your expenses by category, and even has community features where you can learn tips from other savers. Goodbudget is an app (based on the envelope budgeting method) where you manually allocate money into “envelopes” for each category (like groceries, baby needs, bills, etc.) – it’s great if you prefer a hands-on approach and want to stick to spending limits in each category. Many of these apps are free or have free versions. The key is to find a tool that you’ll actually use regularly.

Even your banking app might have features to help – for example, some banks let you set up multiple sub-accounts or “savings buckets” (you could have one for “Baby Expenses” to quarantine that money). Some apps send alerts when you’re close to your budget limit for a category, which can be a useful reminder to rein it in. And if apps aren’t your thing, good old-fashioned spreadsheets or a notebook can work too. The important part is tracking what’s coming in and going out, so there are no nasty surprises.

Final Thoughts: Enjoying Parenthood Without Financial Stress

Bringing a baby into your life is a wonderful adventure. Yes, it comes with extra costs and it might require some lifestyle adjustments – but with thoughtful budgeting and use of the support available, you absolutely can manage it. The goal isn’t to have the fanciest nursery or buy every gadget; it’s to make sure your family’s needs are covered and to reduce money worries, so you can focus on bonding with your little one.

Remember, flexibility is key. Your budget might need tweaking as you learn your baby’s needs and your own new spending patterns (maybe you discover you’re spending more on convenience items in those first sleep-deprived months – that’s okay, just adjust and try to plan for it). Keep communicating with your partner about money, and don’t hesitate to seek advice if you feel overwhelmed – a session with a financial adviser or using free resources like MoneySmart can help get things on track.

Above all, give yourself grace. The early days of parenthood can be unpredictable, and expenses will pop up that you didn’t foresee. That’s normal. With a solid financial foundation and a proactive approach, you’ll handle those surprises just fine. Budgeting for a growing family is an ongoing process, but it’s also rewarding – it enables you to provide for your child and enjoy the special moments without as much financial stress. You’ve got this, and there’s a whole community of Aussie parents out there figuring it out alongside you. Happy parenting and happy budgeting!

References:

1. Services Australia – Parental Leave Pay. Australian Government program providing paid parental leave for eligible parents. (URL: https://www.servicesaustralia.gov.au/parental-leave-pay)

2. Services Australia – Family Tax Benefit (Part A & B). Government payments to help with the cost of raising children. (URL: https://www.servicesaustralia.gov.au/family-tax-benefit)

3. Services Australia – Newborn Upfront Payment and Supplement. One-off payments for new parents who qualify (usually if not receiving Parental Leave Pay). (URL: https://www.servicesaustralia.gov.au/newborn-upfront-payment-and-newborn-supplement)

4. Services Australia – Child Care Subsidy. Financial assistance to help families with the cost of approved child care. (URL: https://www.servicesaustralia.gov.au/child-care-subsidy)

5. ASIC MoneySmart – Budget Planner Tool. Free online budget planner provided by the Australian government (MoneySmart) to calculate and track your budget. (URL: https://moneysmart.gov.au/budgeting/budget-planner)

6. WeMoney – Budgeting & Money Management App. An Australian budgeting app that connects to bank accounts to track spending and help manage your money. (URL: https://wemoney.com.au)

7. Goodbudget – Personal Budgeting App. A popular budgeting app (based on the envelope system) to plan household finances, available in Australia. (URL: https://goodbudget.com)

8. Westpac – “How much does it cost to have a baby?” Westpac article (citing IBISWorld report) outlining average costs of a baby’s first year (2019 data) and budgeting tips. (URL: https://www.westpac.com.au/help/lifemoments/setting-up-life/having-a-baby/cost-of-a-baby/)