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Baby Budget Australia: What a New Baby Really Costs (and How to Plan for It)

Most baby budgets fall over for one reason: they only list the shopping. The cot, pram and car seat are the easy part to picture. The harder part is the months when one income drops to Parental Leave Pay, or to nothing, while nappies, formula and extra power bills keep coming. A baby budget for Australian families needs to cover both: the one-off setup costs and the new running costs, set against what your household income will actually look like each fortnight.

The three parts of a baby budget

1. One-off setup costs. Car seat (it must meet the Australian Standard AS/NZS 1754, so be careful buying second-hand), cot and mattress, pram, change table or mat, bassinet, baby monitor, clothes in a few sizes, bottles and a steriliser if you'll bottle-feed. Many families borrow or buy second-hand for the big items. Keep a column for "borrowed / gifted" so you don't double-buy after the baby shower.

2. Ongoing weekly or fortnightly costs. Nappies and wipes are the steady one. Formula, if you use it, can be a big line. Add extra laundry, power and water, baby toiletries, and medical costs such as GP gaps or pharmacy items. Childcare comes later but deserves its own line, because even after the Child Care Subsidy the gap fee can be one of the largest costs in a family budget.

3. The income gap. This is the line people skip. Write down what each partner earns per fortnight now, then what they'll receive during leave: employer-paid parental leave (if any), the government's Parental Leave Pay, and any other family payments you might be eligible for. Check current eligibility and rates directly with Services Australia, because they change. The difference between today's income and leave income is the number your savings need to cover.

How much should you save before baby arrives?

There is no single right number, but there is a simple way to find yours: multiply your fortnightly shortfall during leave by the number of fortnights you plan to be off, then add your one-off setup total and a buffer of 10 to 20 percent for surprises. If that number feels big, that's useful information now, while there's still time to adjust leave plans, borrow more items, or start a dedicated baby savings account.

Small ways to cut baby costs without missing out

• Buy nappies in bulk only after you know which brand and size suit your baby.
• Ask family to pool gifts toward one big item like the pram instead of lots of small outfits.
• Check local buy-swap-sell groups for furniture, but buy car seats new or from someone you trust.
• Put the baby budget on a fortnightly rhythm that matches your pay, so every payday you know what's left.

Worked example

Say Mia and Josh each take home $2,100 a fortnight. Mia plans six months (13 fortnights) off. Her employer pays nothing extra, so she estimates her leave income from the government scheme after checking Services Australia, and finds a gap of about $900 a fortnight compared with her usual pay. Over 13 fortnights that's $11,700. Their setup list comes to $2,400 after borrowing a cot and accepting a second-hand pram, and they add a 15% buffer. Their target is roughly $16,200. With 16 paydays before the due date, they need to save about $1,000 a fortnight together. That's a lot, so they look at the levers: Josh picks up a few extra shifts, they trim two subscriptions and the takeaway line, and Mia's mum offers to cover the car seat. The final plan is $780 a fortnight, which their budget can carry. The numbers are made up for illustration, but the method works for any family.

How to do it: step by step

1. List every one-off item and mark it buy, borrow or gifted.
2. Estimate weekly running costs (nappies, wipes, formula, extra bills) and convert to fortnightly.
3. Write current fortnightly income, then expected leave income for each partner.
4. Multiply the fortnightly gap by the fortnights of leave, add setup costs and a 10 to 20% buffer.
5. Set a fortnightly savings amount that reaches that total before the due date, and track it each payday.

Frequently asked questions

General information only, not financial or tax advice.