Starting a family and its impacts on income

[Ocean Architect]

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...

When my OA army of halfbreeds reaches maturity, all the "natural fun" will be had by them preferentially, thanks to their fathers good looks and mesmerizing charisma. Before you know it, the planet will be covered by a writhing blanket of hairy joke flinging smartass lunatics at least partially infected by meeeeeee ...and I wont have to change a single nappy. Hows that for a plan

 

[Tuppence]

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

We were in a similar situation - nearly 8 years ago now. FYI, it goes on due date, as I recall. Good luck!

 

[weg]

1 : Get ahead and stay ahead. The more buffer you have the more peace of mind you will have and if something happens then you have the flexibility to deal with it.

Agree. Much easier now too with the baby bonus, and FTB. Clear things like CC and pay extra off your mortgage so you qualify for a repayment holiday if you need it. You have 9 months to prepare for this.
2 : Weigh up private vs public birth. We went public and the amount of free stuff like support braces, pre and post natal swimmin/yoga classes etc we got for free was amazing. others we have talked to whom had private births had to pay for for all of that. Consider though that these things would be provided on a hospital by hospital basis so your local hospital may or may not have a great maternity ward :

Yep, but at the same time it's one not worth stressing out over. Going private does not guarantee a safer or better delivery either.

3 : Too many people buy everything brand new and the most expensive for their child. Does it really matter if the stroller is $1600 or $100? it depends on its quality and use but just because it has a higher price tag doesnt mean the little one isnt going to spew all over it. Ask friends for old baby clothes they dont use, kids grow before they were these things out so why spend $$$$ on them when you can get a whole cupboard full of clothes from friends/family

Agree. You get to buy alot of this once too don't forget, so the biggest expense is with the first child. When family want to spend up on the new grandchild, niece/nephew as they often do ask them to combine their dollars and buy something like a cot or pram.
All in all for us having a child meant the loss of a 2nd income but the family tax benefit A and B is generous enough to cover the costs of out child on a week to week basis (food, nappies, day care etc) and if you dont go overboard with baby monitoring, $5000 cots etc etc then furnishing a baby room isnt that expensive.

A baby actually needs very little. Agree, it's definately the loss of the second income that you feel the most, and later the loss through childcare costs.

Not to scare the OP too much but the biggest costs are when they're in their teens, not babies.

 

[stinadaze]

Yep I meant pre pay interest not tax, initially! Sorry!

Thanks for sharing, each post has been really helpful.

Re Health insurance....that is a mine field. Can’t figure out if you need this if you want to go down the path of public hospital. I’m sure there is some good reason to though.... i have read though that a medicare cap will apply to obstetric, ultra sounds and Assisted Reproductive Technology . you get 80% back with a cap of $1126. Have no idea how much these services would cost??? i need to check whether insurance will cover the remaining 20%.... unless someone here knows.

I believe Centrelink looks at Assessable income (Gross tax assumable income + gross rental income), so it is pointless trying to minimise a family’s income in the FY prior to birth. Right? More so, i think it is the income of the FY in which the baby is born and not the previous one that is used to calculate cc payments, bonus eligibility etc...correct? This confuses me still.

Just fyi, i approach everything (work and pleasure) with research and excel spreadsheets.... this is no different to me call me crazy or weird but this is how i get familiar and comfortable with anything i undertake.
Thanks again for all the replies! Truly appreciated!

 

[wylie]

You have had some great advice, and for me as a 51 year old woman who has had three children, and a husband who was never on a great salary until the kids were much older, our years with young kids were hard financially, but great fun (except for the not so fun bits ).

At any time we could have sold the IP we had when we married, but we always tried so hard to keep it as a long term investment. If we had sold it, we would have simply spent more on everything, whereas being forced to be frugal was good, and no hardship really.

The things that will tell you immediately if you can cope financially is to not touch another cent of your partner's income. Bank it all. If you can live whilst she is pregnant on your salary, then you know that you can do it. The money you save whilst she is still earning should become a safety net. Don't spend it .

The other thing is that we have always been happy to wear second hand gear, not by necessity, but as part of how we are. Even now, I LOVE rummaging in Lifeline to find the gems that are always there. I'm not interested in "designer clothing", love ebay for clothing and furniture and half the contents in our house are pre-loved.

If you are at all inclined to pick up second hand "everything" you will save thousands over the years. I know some people just will not even contemplate this, but you either love the thrill of "finding" a bargain or not. But it is a skill that can be learned, especially if the wallet is bare .

And I'd agree with someone who said that it is not until they approach the teens that they become REALLY expensive. Littlies can cost as little or as much as you decide.

 

[virgo]

And I'd agree with someone who said that it is not until they approach the teens that they become REALLY expensive. Littlies can cost as little or as much as you decide.

Ya, tell me about it; 3 kids 3 sets of braces at 7K a pop! Ouch!!
Really sets my teeth (no pun intended) on edge thinking about it....but you can't deny the kids straight teeth can you???

 

[kathryn d]

Ya, tell me about it; 3 kids 3 sets of braces at 7K a pop! Ouch!!
Really sets my teeth (no pun intended) on edge thinking about it....but you can't deny the kids straight teeth can you???

I gave myself a birthday gift at 34..braces.
By the time mine were ready to come off, my oldest child was ready for hers.
I was able to pay with monthly installments.
(no insurance coverage, except for the teeth that needed to be extracted)
We had 4 children and myself..so I had orthodontic payments for 13 years.
That was the most expensive part of having teenagers. Best part, I got a family discount.

We did agree to pay half if they wanted to get their drivers lisense.None of them have it even now.(ages 20-28) They all realised how expensive owning and maintaining a vehicle is.

Like younger children, teenagers are only as expensive as you make them.
They never had mobile phones until they were adults.If they wanted ipods etc, they bought them, or received them as a gift for Xmas.

When they got part time jobs, we charged for taking them back and forth to work, to pay for the fuel.($2.50 or us or a taxi for $20)
If they wanted to go to uni, they were paying for it.
When they finished school, they were moving out of home.



We don't have school uniforms here, so they were each given a modest (small) amount of money and told to buy whatever you want. It is funny how brand name is not so important when they buy it.

 

[wobbycarly]

We did agree to pay half if they wanted to get their drivers lisense.None of them have it even now.(ages 20-28) They all realised how expensive owning and maintaining a vehicle is.

I'd suggest encouraging them to get their license. They don't have to OWN a vehicle, but renting cars, motorbikes, etc, is difficult without one! It's also a great ID card.

 

[Aaron_C]

Young adults without a drivers licence have great difficulty getting around to any licensed venue - unless of course they're going to bring their passport around. Would definitely get it even if you're not going to drive just for that sole purpose.

 

[kathryn d]

I'd suggest encouraging them to get their license. They don't have to OWN a vehicle, but renting cars, motorbikes, etc, is difficult without one! It's also a great ID card.

Believe me, we have tried.
They have a government issued photo ID, so they are ok that way.
One walks to work, the other 2 take their bike, and the oldest has her boyfriend/partner drive her.

Two have had the beginners license, and allowed them to expire.

 

[theparlis]

Children are very expensive these days. That said i think you should set aside a percentage from your salary to the children's fund. It is going to be quite a big hole in your wallet but it'll be worth it. Hoped i helped. Cheers

 

[weg]

Young adults without a drivers licence have great difficulty getting around to any licensed venue - unless of course they're going to bring their passport around. Would definitely get it even if you're not going to drive just for that sole purpose.

aaron,

We have government issued ID cards in Australia as well.

kathryn,

What type of jobs do your children have? Many jobs expect that you'll have a licence even though they don't ask, with a licence holding the same value as skills you bring to a job. If I was an employer I would wonder WHY this person didn't have one??

Do your children ever intend to move jobs? Most people change jobs over the years for better conditions or more pay, and they rarely are so lucky as to have all these jobs only a walk or bus trip away during travel friendly hours.

I think not having a licence disadvantages and would dictate what you apply for and where you're prepared to work. You yourself needs/needed it (taking them to part time jobs) so why do you think they shouldn't?

 

[devank]

Most people I know couldn't wait to get their licence. The kids I know jump to take the car out of the garage and park it on the street before getting their licence!

 

[kathryn d]

aaron,

We have government issued ID cards in Australia as well.

kathryn,

What type of jobs do your children have? Many jobs expect that you'll have a licence even though they don't ask, with a licence holding the same value as skills you bring to a job. If I was an employer I would wonder WHY this person didn't have one??

Do your children ever intend to move jobs? Most people change jobs over the years for better conditions or more pay, and they rarely are so lucky as to have all these jobs only a walk or bus trip away during travel friendly hours.

I think not having a licence disadvantages. You yourself needs/needed it (taking them to part time jobs) so why do you think they shouldn't?

All kids are on minimum wage.
One son has saved enough for a downpayment on a house, when he is ready (hoping in a couple months to convince him to part with it)
Younger son has started saving for a downpayment.
Youngest son is not interested yet.
Daughter has actually moved to the capital city a couple of months ago, and works as a cashier.(she rents out her unit)

Nope, none have any desire for better jobs. Might be my fault. I've always told them it doesn't matter how much you make, it is how much you save/invest.

When they were living at home,there were only taxis, at $20 each way (while they earned $8.50 hr) so that is why we took them back and forth. That was also the reason they needed to move out after school. They didn't have an option for going back and forth to work.
They each had 2 1/2 years to get their license while living home, and they didn't want it. They still don't. They are quite content living within 30 minutes walk of everything.

It could be worse...they all could be smokers, alcoholic, drug using gamblers.
Not wanting to drive seems pretty trivial.

My grandmother and aunt were older when they decided to get theirs.
My great uncle never had his..as he lived in a city.

Day after my 16th birthday, I had my beginners license.

 

[weg]

Fair enough, but I think most parents would want their kids to at least have a licence (I strongly encourage it), even if they don't have a car immediately, and would go as far as paying for this and whatever else may help them in the future.

A licence, skills (and a piece of paper) and a go get attitude can really make all the difference to choice of job and what you get paid. Why encourage them to take on the attitude that minimum wage is what they should strive for? I've encouraged the opposite and both want to invest (the 13yo has already invested savings).

I think enouraging kids to be in the best possible position to advance themselves, doesn't take away from investing or saving - they're two very different things.

 

[kathryn d]

Fair enough, but I think most parents would want their kids to at least have a licence (I strongly encourage it), even if they don't have a car immediately, and would go as far as paying for this and whatever else may help them in the future.

A licence, skills (and a piece of paper) and a go get attitude can really make all the difference to choice of job and what you get paid. Why encourage them to take on the attitude that minimum wage is what they should strive for? I've encouraged the opposite and both want to invest (the 13yo has already invested savings).

I think enouraging kids to be in the best possible position to advance themselves, doesn't take away from investing or saving - they're two very different things.

We have encouraged them.
One son enjoyed the "trade" part of school. He dabbled in plumbing,electrical,and even child care as part of the curriculum.When it meant he needed further education and a driver's license, he wanted no part of it.

Daughter was ready to become aesthetician. When she realized she was going to need to spend $10-$15k, she decided against going.

Oldest son, was going to with his friend to college for computer animation. He decided it wasn't really what he wanted, and he didn't want to go into debt. His friend went, and dropped out 6 weeks later, with debt. Our son made the right decision for him.

Youngest son and his friends have been making music demos and hope to get "discovered".Being a rock star is his dream

How many kids have you seen have their parents pay for uni, and the kids don't appreciate it?
When it came down to it, our kids just didn't want it.
I haven't even finished high school, but I think I turned out ok.
I did insist they at least finish school, because times are a bit different now.

Our kids will be financially secure, because we will direct them in the right direction. What they do for a job, is of no importance, as long as they don't hate it.

 

[weg]

Our kids will be financially secure, because we will direct them in the right direction. What they do for a job, is of no importance, as long as they don't hate it.

You can still direct them, but why in such a narrow and restrictive way?

Why not choose to invest while earning say 100K a year (very achievable) instead of doing it on minimum wage? How much EASIER would that be .

I think an extra income more than a low paid worker, in your pay each week is not insignificant.

Also, why not teach them about investing in other areas that bring a return - like non property investments, education (money spent on education/skills training is no different to money spent on other investments, property or otherwise - you always look at the return).

 

[beachgurl]

Re OP's PHI question- pays for the right to go to a private hospital and that's almost it. Our health policy has two $500 excesses and I was admitted for prenatal care a few weeks prior to our baby's birth so we were up for 1k just to walk in the hospital door. PHI gives a rebate to in-hospital items only for the majority of policies so nothing back for the obstetric fee. Medicare gave us $400 from a $2500 management fee. Fertility costs are not covered by PHI in most cases unless u go to a public hospital IVF clinic. As for in-hospital costs, we have $400 out of pocket for pathology tests and am yet to receive an anaethetist bill (for our first child we were $1200 out of pocket). Another thing is that your baby is not deemed to be an in-patient so PHI does not give any rebate on paediatrician fees -which will be charged to you for the one or two compulsory visits they make to your baby. Lastly some obs will bulk bill their fee to conduct a csection but others don't.

 

[kathryn d]

You can still direct them, but why in such a narrow and restrictive way?

Why not choose to invest while earning say 100K a year (very achievable) instead of doing it on minimum wage? How much EASIER would that be .

I think an extra income more than a low paid worker, in your pay each week is not insignificant.

Also, why not teach them about investing in other areas that bring a return - like non property investments, education (money spent on education/skills training is no different to money spent on other investments, property or otherwise - you always look at the return).

You seem to forget they live in Canada.
Except for landlords, I don't know anyone who makes that kind of money here.

Property is very affordable for the average wage.
We started in 2004 with very little, and have done very well financially.
Now add in they are 20 years younger than when we started..and they have us as their property managers/mentors.

 

[weg]

You seem to forget they live in Canada.
Except for landlords, I don't know anyone who makes that kind of money here.

Adjust that for Canada for incomes, unless you're saying a nail technician earns as much as a school teacher for example .

And are you saying that ALL landlords in Canada make more money (net income) than many skilled and educated PAYE workers?