Contents

About the Author

Acknowledgements

Foreword

Chapter 1: Ready or Not? Knowing the Right Time

‘Honey, We Shrunk the Family’

Does it Pay to Wait?

Factors to Consider before Starting a Family

The ‘Right’ Time is Different for us all

The Effect of Parenthood on Your Wealth

Are you Ready for Parenthood?

Chapter 2: Can We Afford a Baby?

Little Person — Big Bills

Financial Shocks for New Parents

Assisted Reproductive Technology and Adoption

Can a Financial Planner Help?

A Helping Hand

The Power of Two

From Late-night Romance to Late-night Feeds

Chapter 3: Forward Planning

When should We Start Making Plans?

The Public Health System Versus Private Health Insurance

Gain Control of Your Money

Saving for Baby

Aim to be Debt Free

Chapter 4: Nine Months . . . and Counting

Beg, Borrow, Bargain

What to Buy

Nice-but-not-necessary Purchases

And Now . . . the Mortgage

Six smart Strategies to Slash Time and Money off Your Home Loan

Maternity Leave from the Mortgage

Chapter 5: Paying for Everything

Do Your Homework

Buying on Credit

Chapter 6: Maternity Leave and Beyond

From the Labour Force to the Labour Ward

Parental Leave

What if Work’s not for you?

Develop a Network

Coping with Change

Chapter 7: Penny-wise Parenting — Surviving on One Income

Surviving on One Income

Yours, Mine . . . Ours

Tap into Entitlements

Tax Breaks for Single-income Families

Staying on Top of Bills

Chapter 8: Living well on a Budget

Shopping Smart

Holidays on a Budget

Savings at Play

Birthday Parties on a Budget

Lots of Love for not Much Debt

Chapter 9: Bibs, Bottles, Briefcase

The Work Versus Stay-at-home Dilemma

Organise Child Care — Now!

Working from Home

Chapter 10: Saving for Schooling

Public Versus Private

Investing in Growth Assets

What about Tertiary Education Costs?

Index

First published 2007 by Wrightbooks

an imprint of John Wiley & Sons Australia, Ltd

42 McDougall Street, Milton Qld 4064

Office also in Melbourne

Typeset in Berkeley LT 11.3/13.8 pt

© Nicola Field 2007

The moral rights of the author have been asserted

National Library of Australia Cataloguing-in-Publication data:

All rights reserved. Except as permitted under the Australian Copyright Act 1968 (for example, a fair dealing for the purposes of study, research, criticism or review), no part of this book may be reproduced, stored in a retrieval system, communicated or transmitted in any form or by any means without prior written permission. All inquiries should be made to the publisher at the address above.

Cover image © Stock Illustration RF

We thank Dr Paul Henman and The University of Queensland for permitting us to reproduce material from ‘Updated Costs of Raising Children — December Quarter 2006’ on page 21.

Wiley bicentennial logo: Richard J Pacifico

Disclaimer

The material in this publication is of the nature of general comment only, and does not represent professional advice. It is not intended to provide specific guidance for particular circumstances and it should not be relied on as the basis for any decision to take action or not take action on any matter which it covers. Readers should obtain professional advice where appropriate, before making any such decision. To the maximum extent permitted by law, the author and publisher disclaim all responsibility and liability to any person, arising directly or indirectly from any person taking or not taking action based upon the information in this publication.

About the author

Nicola Field began her working life as a chartered accountant. Following a career change, she taught accounting and business at secondary and tertiary level, and completed a masters degree while pregnant with her second child.

A journalist for more than eight years, Nicola is a regular contributor to a number of successful magazines including Money Magazine and Real Living.

In 2003 Nicola co-wrote Financial Snakes and Ladders (Penguin) with Paul Clitheroe, and in 2004 teamed up with Chris Walker to write Walsh Bay: Harbourside Renaissance (Hardie Grant Publishing, 2004).

Nicola lives and works from home in the Upper Hunter Valley of New South Wales with her partner, four children and a growing assortment of horses.

Acknowledgements

When I first started writing Baby or Bust in September 2006, the youngest of my four children, baby Nicholas, was just eight weeks old. He spent much of his time curled up on my lap, breastfeeding or snoozing while I worked at the computer, so penning a book seemed like just another project to add to my writing quota.

However, as the book grew, so did Nicholas. The project became progressively more challenging as the once-tiny baby graduated to sitting, then crawling and finally to cruising unaided around the furniture, at which point he discovered the on/off switch on my computer and decided it was the most interesting thing in the house. Just to throw in a little extra stress, we started major renovations to our home when the book was at the midway point.

Thankfully, everyone pitched in to help — everything from looking after Nicholas while I feverishly typed, through to not complaining when rissoles or spag bol appeared on the dinner menu for the third night in a row. The upshot is that Baby or Bust is very much a team effort. I owe special thanks to my three beautiful ‘big’ kids, Alex, Kate and Christopher, and of course to my best friend and better half, Michael, all of whom lent a hand, allowing me to get the job done.

I’d also like to offer a heartfelt thanks to all of the people who agreed to share their thoughts and experiences on parenting in this book. And to Paul Clitheroe for sharing my enthusiasm about being financially fit for parenting.

My gratitude also to the team at John Wiley & Sons. And I would have been lost without the invaluable proofreading and research skills provided by my assistant, Karen ‘Scoop’ Orr.

My sincere thanks to Chris Walker — you’ve been a great teacher and a wonderful friend, and along the way you opened doors for me that I never knew existed.

Finally, I’d like to thank my parents. It wasn’t until I had children of my own that I realised how much you have done for me.

Foreword

As a father of three, I’ve discovered that children are wonderful, rewarding, a blessing and a source of tremendous pride. My wife, Vicki, and I couldn’t imagine life without ours. But kids don’t come cheap. No matter whether you are a high-income earner or on a more modest wage, one of the most important steps you can take if you are a parent or are soon to be a parent, is to get your finances under control.

The arrival of a baby throws plenty of new and often unexpected challenges at parents. We all rise to meet those challenges, though it can be a case of fumbling your way through in the early days. But one of the last things you need while you’re coming to grips with your new family member is the additional strain of worrying about money matters.

One of the lessons I’ve learnt over three decades as a financial planner is that there is no correlation between what people earn and how much control they have over their money. It’s all about what you spend, what you save and what you do with those savings, and Nicola Field’s book, Baby or Bust, provides a wealth of useful information to help new mums and dads chart a smooth financial course for parenthood.

Covering the early days, before you even hear the thrilling news that a baby is on the way, right through to celebrating the completion of your child’s education, Baby or Bust offers useful suggestions and practical examples that can help you make the most of your hard-earned dollars. Read it in its entirety or use it as a reference point to find valuable advice on crossing the various financial hurdles we all encounter as parents.

As Chairman of the Financial Literacy Foundation I am a great believer in the importance of being financially secure. As a parent, I recognise that children often learn some of their most lasting lessons from mum and dad. Taking a sensible approach to money management won’t just make life more comfortable for ourselves and our children, it will also teach kids vital money skills that they will hopefully put to good use during their adult life.

Sit back and enjoy reading Baby or Bust. Whether you take on board all of the ideas or just a few, this book will help you get on the right track financially. Above all, enjoy time spent with your children. They are the best investment you will ever make, and I’m sure you will discover — as I did — that they will enrich your life far more than you could ever have imagined.

Paul Clitheroe

Chairman of the Financial Literacy Foundation and Founding Director of ipac securities

Sydney

June 2007