July 15, 2015
The arrival of a new baby always calls for careful financial planning, and the 2015 Federal Budget has made good advice essential.
It's a fair bet expecting families took more than a passing interest in the 2015 Federal Budget.
Prior to the May 2015 Budget, parents were able to access government assistance in the form of paid parental leave in addition to any employer-provided parental leave entitlements.
However from 1 July 2016, parents will no longer be able to receive payments from both their employer and the government. Put differently, a parent on the Commonwealth paid parental leave scheme won't be able to receive equivalent paid leave from their employer.
Possible shifts in leave patterns
The Federal government remains committed to ensuring that all primary carers will have access to parental leave payments that are at least equal to the maximum parental leave benefit (currently set at 18 weeks at the national minimum wage). Nonetheless the latest change could see parents adopt new approaches when it comes to parental leave.
A new mum for instance could take paid leave from her employer for the first three months following the baby's birth, then return to work while the baby's dad takes government-funded leave for the next three months.
Planning is the key
The way each family juggles time off work following the birth of a child can often hinge on the financial foundations laid earlier.
The nine months before a baby arrives can be hectic, often with a nursery to decorate and an A-Z of baby-related purchases to make. But this is also the time to prepare your family finances for the big changes that lie ahead.
It makes sense to draft a 'post-baby' budget that helps you manage the period when household income may be lower than normal. It can be worth aiming to build a pool of savings - or alternatively paying down a chunk your home loan.
Importantly, don't overlook the need to review your life insurance. The birth of a child makes it especially critical to have the right amount of cover in place for the needs of your growing family.
As a Mortgage Choice Financial Adviser, I can help you make financial preparations for this exciting phase of your life. I can't help with the inevitable sleepless nights, but with good plans in place at least you won't be kept awake worrying about money matters.
Jason Sibio - BBus ADFP - Financial Adviser
Ph: 03 9432 6070 ; M: 0423 941 895
Mortgage Choice Financial Planning
Authorised Rep No 449850