How much does it cost to have a baby in Australia?

Around 286,000 babies were born in Australia last year, according to the Australian Bureau of Statistics (ABS). If you are one of the many Aussies thinking about starting (or adding to) a family sometime in the near future, it’s always useful to know what’s likely to be in store financially so you can prepare in advance. Here are some things to think about when working out the cost of having a baby in Australia.

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How much does a baby cost?

A new baby can be surprisingly budget-friendly if you stock up on pre-loved equipment and hand-me-downs. Or, the sky can be the limit if you plan on buying brand new designer gear.

For most of us, the cost of having a baby is likely to fall somewhere in the middle. As a guide of what you could be up for, parenting website newbornbaby.com.au suggests allowing for the following expenses:

Setting up your home

• Cot and mattress – expect to pay about $100 to $750.

• Cot linen – allow around $150.

• Change table – budget for $70 to $600.

• A set of drawers for baby clothes – allow about $90 to $600.

• Comfortable chair for feeding your baby – expect to pay from $90 to $500

Cost in baby’s first year: $500 to $2,600.

Nappies

• Disposable – budget for around $40 to $50 per week, or about $2,080 to $2,600 in the first year.

• Cloth – newbornbaby.com.au suggests allowing around $1,000 to buy all the cloth nappies you will need.

Cost in baby’s first year: $1,000 (cloth – excludes cost of laundering) to $2,600 (disposables – at $50 per week).

Food for baby

• Breastfeeding – breastfeeding costs next to nothing assuming there are no costs like seeing a lactation consultant, however, if you plan to buy a breast pump, allow about $150 to $300.

• Formula – allow about $30 per tin of formula. Expect to use at least one tin of formula each week for at least the first six months and potentially slightly less after your baby starts eating solid food.

• Solids – the health.gov.au website says babies can begin to eat solids from six months old. Newbornbaby.com.au suggests budgeting for around $5 per day for the cost of ready-made baby food though making your own will likely be cheaper.

Cost in baby’s first year: $1,060 (breastfeeding plus solids) to $2,200 (formula plus solids). The price estimate for formula plus solids assumes that a new born baby would consume around 17 additional tins of formula between the ages of 6-months and one years old. This may change due to your baby’s nutritional needs.

Maternity wear

You’ll more than likely need new clothes to accommodate your baby bump, so $250 to $1,200 should allow for some pieces such as jeans, t-shirts (long and short sleeve), underwear, a dress for an occasion and a cardigan or wraps to keep you warm. This is a large range as it will depend on if you buy all of your maternity wear brand new, the brands you buy and if you choose to buy second hand.

Baby wear

Babies grow quite quickly in the first year, so you’ll often need to buy them larger clothes. You’ll need several sets of clothes for the 0-3 month, 3-6 month, 6-9 month and 9-12 month periods. Babies usually grow a little slower after 12 months, so things should last a little longer. Budgeting around $500 for your baby’s first year of clothing should cover the basics.

Transport

You’ll need to budget for the cost of taking your baby with you wherever you go. According to baby equipment retailer Baby Bunting, essential transport equipment can come with the following price tags:

• Baby capsule – A rearward facing car seat that is fitted to your car and will usually be suitable for your baby for up to 6-12 months (guide only). Expect to pay upwards of about $350, with the top of the range sitting around $500+.

• Car seat – Allow around $300, but prices can range up to $750

• Pram – Budget for a minimum cost of about $500 to $1,000 for a new one.

Cost in baby’s first year: $1,150 to $2,250.

The table below summarises all these different costs according to the lower and upper price estimates.

Cost of having a baby

← Mobile/tablet users, scroll sideways to view full table →

Sources: Newbornbaby.com.au, Babybunting.com.au.

As the table shows, the average cost of having a baby in Australia can range from about $4,460 to $11,350. There may be additional expenses such as toys for your baby and childcare costs, but the above expenses are seen to be the most essential. The good news, as we’ll see later, is that there are plenty of ways to save.

If you’re unsure about which baby-related brands to purchase, you may like to check out Canstar Blue’s Most Satisfied Customer Awards for Family & Gifts, which review products such as disposable nappies, breast pumps, baby food, car seats and capsules and prams and strollers.

Health care costs of having a baby

Before you fall pregnant, it’s a good idea to decide whether you’d prefer to be a public or private patient during your pregnancy and for giving birth.

Public patient and hospital

Medicare is Australia’s universal health care system and it can help with pregnancy costs like routine ultrasounds, blood tests, some immunisations, pregnancy counselling for three sessions, birthing classes, specialist NICU care (if required) and care from public system midwives and obstetricians. And, if you choose to have your baby as a public patient at a public hospital, you won’t have to pay.

Unfortunately though, as a public patient you usually won’t get to see the same doctor or midwife throughout your pregnancy and are unlikely to have a private room while in hospital. There may also be occasional out-of-pocket costs. If you do not have a Medicare card, you will not be covered for any of these costs.

Private patient and hospital

If you would rather go private, you will need to check whether your pregnancy and birth-related costs will be covered by your private health insurance. Many private health funds impose a waiting period of 12 months before you can claim on pregnancy and birthing costs, so your health insurance is something to organise well in advance of trying for a baby. As a private patient, you will usually be able to choose the obstetrician and midwives that will see to you throughout your pregnancy and during the birth. You will also have a private room for the birth, regardless of whether you attend a public or private hospital.

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If you do decide to use private health insurance, the Commonwealth Ombudsman, an independent office that investigates complaints about Australian Government agencies, warns that many of the lower-cost policies either don’t cover obstetrics, or they pay restricted benefits that will only cover you as a private patient in a public hospital. If you’re planning on having your baby in a private hospital, be sure to check that you have the appropriate hospital cover, otherwise you could face expensive out-of-pocket costs.

Note too, most funds require you to upgrade your policy to a ‘family’ level before your baby is born. Check with your health fund to understand the rules that apply to you – and the timeframe required for you to switch to family cover, as it varies between funds. It may be a good idea as well to read the Private Health Information Statement (PHIS) that applies if you are considering a health insurance policy.

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Hospital excess and gap payments

Even with private health insurance in place, you may still need to budget for an excess and/or a co-contribution or gap payment if you decide to have your baby at a private hospital.

You can check the details of your excess and co-contributions with your health fund. For example, HCF’s cost indicator suggests delivering a baby via caesarean (C-section) can cost $14,709 through the private system, but this cost can be significantly reduced through private health insurance. HCF suggests that as well as an applicable excess, there may be an average out-of-pocket cost of $858. This hypothetical example has certain cost assumptions, such as attending a private hospital in HCF’s network, having known gap agreements with certain specialists and having served relevant waiting periods.

4 tips for saving on your baby related costs

Starting a family can be a wonderful experience. But the extra costs of pregnancy, childbirth and raising your baby can come at a time when household income is thinly stretched – especially if one parent takes extended leave.

The good news is that there are plenty of ways to save without losing the quality of care your newborn enjoys. Here are some tips to consider:

• Borrow or buy pre-loved – you probably won’t get a lot of wear out of maternity garments and clothing in very small sizes for your newborn. If “brand new” is not overly important to you, many items of clothing and other pieces of baby gear can be picked up secondhand from op shops or via online marketplaces such as Gumtree. It can also be worth letting friends and family know you’re happy to accept hand-me-downs.

• Hire a baby capsule – items like car restraints shouldn’t be purchased secondhand (in case they’ve been in a car accident or could be unsafe for another reason, such as the age of the seat not meeting legal requirements). However, it’s likely your newborn will quickly outgrow a capsule – often within the first six months, and they can be cheaper to hire than to buy new. Google ‘capsule hire’ for your area to see what’s available from a reputable lender. Keep in mind that it’s extremely important to be aware of the safety standards that apply for child restraints if you are a parent (or soon to be one). You can find out more from Product Safety Australia and the ACCC. If you are buying a children’s car seat, it can also be worthwhile to get it professionally installed for safety reasons.

• Remember, pricey doesn’t always mean best – some parents believe it’s worth paying more for baby-related items. However, you shouldn’t feel guilty if your budget doesn’t stretch to top-of-the-range products. You can consider being selective too. Your baby is unlikely to notice that you’re buying a more affordable brand of nappy bags!

• Tap into benefits – a bit of extra cash always comes in handy when a new baby arrives. You may be eligible for paid maternity leave or parental leave pay through Services Australia or directly through your employer. Government-assisted benefits can include the Newborn Upfront Payment of $667 and supporting Newborn Supplement, which can be worth up to a total of $2,003.82 for the first 13 weeks following the birth of your baby, depending on your income. If you are eligible for the Family Tax Benefit Part A, you will typically be eligible for these Newborn payments.

Fortunately, babies don’t arrive entirely unannounced. Use the time during your pregnancy to budget and save for the costs of your baby, and take advantage of opportunities to pick up discounted purchases at sales. A bit of forward planning can help your finances stay in good shape, so you won’t have to worry about money matters so much when your newest family member arrives.

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Cover image source: George Rudy/Shutterstock.com