Personal Finance Tips for 2013

2013 Budget: How to financially prepare yourself

With the baby bonus and family funds on the chopping block, find out what the budget has in store for you.

The unveiling of the 2013 budget has brought with it many changes: $3.3 billion to be set aside from 2014 -15 for the National Disability Insurance Scheme, $10 billion to be rolled out to schools as part of the Gonski reforms and unfortunately for some, the abolishment of the $5000 baby bonus.

‘The elimination of the baby bonus has caused a bit of a stir in the media in the past couple of weeks’ says Rob Dawson, Financial Advisor at PSK Financial Services and author of Insight Investment and Retirement Strategies. ‘Frankly it’s a bit of a sideshow. Some middle class families (about 28,000) will lose approx $5,000 of the current maximum baby bonus as it will be means tested’.

Federal budget 2013

‘The Baby Bonus either way you look at it is not much of a bonus compared to the true long term cost of raising a child’ explains Mr. Dawson. According to the latest figures from the University of Canberra, ‘it is estimated that to raise 2 children from babies to about 23 years of age costs a total of $800,000.That’s about $440,000 for the first child and $360,000 for the second. This works out to be on average about $17,000 per child per year. The figure has risen dramatically since 2007 when the estimate was $537,000 for 2 kids to age 23. The figures vary depending on household income and ability to pay. These figures are for mainstream middle income households’.

Nevertheless, increases to the Family Tax Benefit Part A mean those who have a household earning of $94,316 a year will still receive $2000 for their first child and $1000 for each subsequent child.

It is probably better to be cut and the spare funds channelled to other areas of Government spending.

Rob Dawson

If you stand to lose out on the baby bonus altogether or receive a lower payment as a result of the budget, now is the time to be more financially aware than ever. ‘It’s critical that would-be parents are aware of the real long term cost of raising children and factor it into their long term budgeting,’ Mr. Dawson explains. You can still financially prepare to have a child with some smart financial thinking.

Finance tips to prepare yourself for having a baby

Reduce your expenses

You're going to have another family member soon enough, so it makes sense that you should try to eliminate any spending which isn't important to prepare for the additional costs that come with this. Some quick ways to start saving now include:

  • Quitting smoking
  • Limiting the number of times you go out for meals or drinks each week
  • Taking public transport or walking to save on petrol and car maintenance
  • Having a good look at your credit cards, home loan and savings accounts to ensure you're getting the most out of them
  • Do the same with your utilities and other recurring expenses such as gym memberships.

Try to increase your income before you stop working

Knowing that you'll need to stop working in the near future gives you time to plan ahead. Ask for a pay rise, seek additional work or open a small internet business to lift your income before your child arrives.

Start a budget

Put a household budget together and find out where your income is going each week and know how this will change once you can no longer work. Don't forget to budget for the specific baby expenses you'll have to factor in such as doctors, ultrasounds and any learning materials you'll have to purchase.

Find our budget calculator here

Open a savings account for your baby

While many advocate against going overboard thinking too far in advance about the expenses a child brings, it's still worth opening up a separate account for the initial costs a baby brings like nappies, clothes, food, toys, seats and prams.

Information on opening a savings account

Make your savings an automatic process

Setting up an automatic savings plan which transfers money from your transaction account to your savings account will make it easier to keep your savings growing consistently. You can even employ the savings 'bucket' method, where you have a sub-account for each savings goal you have. This makes it easier to organise your funds and see the progress you're making.

Practice safe spending

Overspending and emotional purchases are a bad combination even without expecting a child. Using the budget you hopefully set up in the first tip you can find out how much you have to spend on entertainment and other areas. If you know your limit then it's easier to stay within it.

You still have up until March 2014 to make use of the baby bonus, but even once it draws to a close it's important to know there are still ways to have your finances prepared and ready to go once the young one arrives.

Compare accounts below

Rates accurate as at: May 26th, 2019 Learn about our information service
Rates last updated May 25th, 2019
$
$
months
Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Interest Earned Product Description
UBank USaver
2.87%
1.81%
1.06%
$0
$0 / $0
Earn up to 2.87% p.a. by linking your USaver account to a UBank Ultra transaction account and transferring at least $200 per month into either account. This offer is available on balances up to $200,000.
AMP Saver Account
3.00%
2.10%
0.90%
$0
$0 / $0
Introductory rate of 3.00% p.a. for 4 months, reverting to a rate of 2.10% p.a. The bonus rate offer is for new AMP Saver customers only, and applies to the first $250,000 deposited.
HSBC Serious Saver
3.10%
1.20%
1.90%
$0
$0 / $0
Receive a maximum variable rate of 3.10% p.a. for 4 months, reverting to an ongoing rate of 1.20% p.a. for each month you don't make any withdrawals from the account. Available on balances below $1,000,000.
NAB iSaver
2.55%
0.50%
2.05%
$0
$0 / $0
Introductory rate of 2.55% p.a. for 4 months, reverting to a rate of 0.50% p.a. Available on balances up to $20,000,000.
Bankwest Hero Saver
2.60%
0.01%
2.59%
$0
$0 / $0
Ongoing, variable 2.60% p.a. rate when you deposit at least $200 each month and make no withdrawals. Available on balances up to $250,000.

Compare up to 4 providers

Rates last updated May 25th, 2019
$
Name Product Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Monthly Account Fee Product Description
HSBC Everyday Global Account
Visa
$0
$0
No foreign ATM or transaction fees.
$0 monthly account fee.
Enjoy no minimum ongoing balance or transaction requirements and the flexibility to hold up to 10 currencies. Apple Pay and Google Pay available.
UBank USaver Ultra Transaction Account
Visa
$0
$0
Earn up to 2.87% p.a. interest on your linked savings account. No foreign ATM or transaction fees.
$0 monthly account fee.
You must open the UBank USaver savings account in order to get this account. Enjoy access to ATMs in Australia and overseas for free and a 0% foreign transaction fee for online purchases. Manage your spending with a built-in sweep facility that automatically moves money between your linked accounts based on the limits you set. Make contactless payments with Apple Pay.
NAB Classic Banking
Visa
$0
$0
Enjoy convenient, unlimited access to your money.
$0 monthly account fee.
Tap and pay with your NAB Visa Debit card or your phone using Apple Pay, Google Pay, Samsung Pay or NAB Pay for Android. Temporarily block your card at the touch of a button if you lose it.
ING Orange Everyday Account
Visa
$0
$0
No fees for any ATM in Australia or overseas.
$0 monthly account fees.
Enjoy $0 ATM withdrawal fees when you deposit $1000 and make 5+ card purchases per month. Get a competitive ongoing variable rate when linked with the ING Savings Maximiser.
MyState Bank Glide Account
Visa
$0
$0
Simplify your everyday banking with these sleek digital features.
$0 monthly account fee.
Choose the way you pay with access to Google, Samsung and Apple Pay plus Fitbit Pay and Garmin Pay. Send and receive money in less than 60 seconds with PayID.
CUA Everyday Account
Visa
$0
$0
Enjoy flexible payment options and access to a wide network of ATMs.
$0 monthly account fee.
Access to Google, Samsung and Apple Pay. Enjoy fee-free cash withdrawals from 10,000+ ATMs across Australia. Deposit $1,000+ into this each month and receive bonus interest on a linked CUA eSaver Reward Account.
Citi Global Currency Account
Mastercard
$0
$0
Hold up to 10 currencies.
$0 monthly account fee.
Enjoy one linked debit card to hold up to 10 currencies and receive foreign currencies for free. Earn up to 2.25% p.a. interest on your AUD balance.
ANZ Access Advantage
Visa
$0
$2,000
Pay with Apple Pay, Google Pay & Samsung Pay.
$5 waivable monthly account fee.
Monthly account fee waived if you deposit at least $2,000 a month, are under 25 or if you meet other eligibility criteria.

Compare up to 4 providers

Rates last updated May 25th, 2019
$
Name Product 3 Mths p.a. 4 Mths p.a. 6 Mths p.a. 7 Mths p.a. 12 Mths p.a. 24 Mths p.a. Interest Earned
ME Term Deposit
2.40%
2.40%
2.40%
2.45%
2.40%
2.40%

Compare up to 4 providers

Rates are displayed for the terms and minimum deposit sizes listed in the table above. The rate you receive could vary depending on your deposit size and interest payment frequency.

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