Starting a family and its impacts on income

[stinadaze]

Have searched the forums and found little snippets of info but nothing major. I was starting to research and look into ways one can prepare financially if planning to start a family. Not even sure I have posted in the right discussion area to be honest!

Some basics I’ve read about for example is to pre pay tax for the FY were income will be less (assuming one parent will not work, or work less). I’ve heard that you can look at Super too, though whether it is co contributions, splitting contributions or something else altogether I don’t know.

I would like to hear form everyone, especially form people who have been through this and see what they have done to get the best out of the situation.

Who can provide the best advice with this... accountants? Financial planners? Or are there any great websites? I am not after a parenting site till will instruct you to pay off cc debt, and to eat out less and to prepare oneself for the extraordinary cost of diapers etc…. I’m after strategic ways of working the system and being wise ahead of time.

Thanks!

 

[devank]

Predicting the impact would be tough.

You can take few measures to minimise the tax by carefully arranging your leaves.

This can be a bit over the top but having the baby before Dec would distribute the income evenly in both financial years (assuming the mother goes on an mat leave for a year).
Our kids were born in late Aug and early Dec... and I wouldn't say that I didn't plan that way

 

[Terryw]

I haven't heard of prepaying tax before!

Kids cost money. lots of money. Having the mum off work also tends to mean big reductions in income too. a double whammy!!

 

[Mry]

This may be a little naive of me, but getting a good paying job flexible enough to allow you to spend time with your family and buying your own home tend to be the biggest issues you need to deal with initially. After those are under control, then you need to make goals and speak to someone about finding ways to achieve them.

For the most part, family financial planning is making sure you can feed, clothe, educate and shelter your little anklebiters until they become financially independent.

If I read a book which told me that one of the best ways to prepare for a family was to look at super, I'd probably toss it. That's about you retiring with something to live on.

Some basics I’ve read about for example is to pre pay tax for the FY were income will be less (assuming one parent will not work, or work less).

I really have no idea what you are talking about here.

 

[devank]

I haven't heard of prepaying tax before!

May be prepaying interest on loans which you can claim on tax?!?

 

[Ergophobia]

get good health insurance and look out for waiting periods

I changed health fund in Jan as we are trying for a baby this year.

I just found out that we have one on the way and the due date is 1 week after our waiting period expires.

our first was 3 weeks early... so she is going to have to cross her legs

 

[jrc77]

Our baby was born on 30th June 2011 - so we can distribute from our family trust for the 10-11 tax year One day later would have cost us about a grand in tax.

For the OP - in our case, dropped to one income, grocery bills doubled, going/eating out expenses basically dissappeared, online shopping for baby clothes/toys/books is out of control

Jason

 

[Terryw]

Great strategy Jason. Did you plan it that way?

$3333 in tax free income as opposed to $416!

 

[redwing]

If you wait until you can afford to have kids, it will never happen

 

[wobbycarly]

If you wait until you can afford to have kids, it will never happen

Very true!

Although somehow, there seem to be hundreds of late-teens, early-twenties getting around town with one in the pram and one in the oven... wonder how that works...

 

[Aaron_C]

Very true!

Although somehow, there seem to be hundreds of late-teens, early-twenties getting around town with one in the pram and one in the oven... wonder how that works...

Simple....your tax dollars.

 

[jrc77]

Great strategy Jason. Did you plan it that way?

$3333 in tax free income as opposed to $416!

Plan is probably a bit strong - however I was aware of the tax implications when being induced was offered for medical reasons.



Jason

 

[Terryw]

Plan is probably a bit strong - however I was aware of the tax implications when being induced was offered for medical reasons.



Jason

ATO may apply part IVA!

 

[Aaron_C]

ATO may apply part IVA!

heh probably not for $2,000 but you never know these days.

 

[willair]

Very true!

Although somehow, there seem to be hundreds of late-teens, early-twenties getting around town with one in the pram and one in the oven... wonder how that works...

http://www.centrelink.gov.au/internet/internet.nsf/online_services/index.htm

 

[redwing]

Very true!

Although somehow, there seem to be hundreds of late-teens, early-twenties getting around town with one in the pram and one in the oven... wonder how that works...

Taking something seriously that was only meant to be poking fun

 

[Ocean Architect]

If you wait until you can afford to have kids, it will never happen

You can always donate sperm. One of my plans to take over the world (every human being out there has to hatch a plan to take over the world now and again) was to buy a sperm bank and simply replace all the sperm with my own, which I view as being a very compassionate and caring thing to do, and not to mention socially responsible, because it would help breed some of the stupidity out of the world and raise the collective Australian IQ.

I shelved the idea because, let's be honest...have you considered how much work it would be replacing all that sperm? That and the whole being sued/thrown into jail thing. Plus having to compete with my offspring for hot chicks. Nah. Totally not worth it.

 

[wobbycarly]

Taking something seriously that was only meant to be poking fun

Huh?

I do agree that financially, there's never a "best time" for kids. I can completely relate to your point that "if you waited until you could afford them you'd never have them". But we work out how to afford to have them.

Then there are the <insert preferred low socio-economic stereotype here> who have the kids and let the government (well, our taxes, as Aaron pointed out) pay for them.

Perhaps I should have put a smiley on my post.

 

[wylie]

Taking something seriously that was only meant to be poking fun

I think you might have missed the funny part...

An OA, if you buy a sperm bank and replace all the sperm with your own, how do you stop everybody else from having "natural" fun.

You do realise, don't you, that most people who rely on a sperm bank are probably NOT the type who get knocked up in the back of a car, but generally have brains AND money to spend on this caper .

You could have some fun giving your scheme a try though...

 

[Scott No Mates]

Just start living off one income now. Cut back on entertainment, drinkies, going out, car, holidays etc. Save all the second income/put it into your offset account. Get used to it now rather than when she drops.