Important Financial Milestones for your Family

Like your children’s growth and development, your family’s financial life is also characterised by milestones. Yvonne Walus shares insights around these ages and stages.

The shorts of this article:

  1. Why is planning important
  2. Stage 1: Pregnancy and new baby
  3. Stage 2: Family with toddlers
  4. Stage 3: The school-age years
  5. Stage 4: Empty nesters and retirement
  6. Pro Tips
  7. Protecting your wealth

Read on to learn how…


According to Stats NZ, the cost of living for the average household increased by 8.2% in 2022. This makes it more difficult for families to save money, whether to prepare for another child, buy a new or bigger house, have a dream holiday, or invest for the future.

This article can help you stay on track to achieve your family’s financial goals. Of course, every individual and family is different in terms of household income and expenses, so take whatever information is useful for your particular situation.



In New Zealand, you don’t pay for medical expenses associated with pregnancy and giving birth, unless you go private. You’re also entitled to 26 weeks of parental leave payments while caring for your new baby. Your pre- and postnatal spending will generally include:

  • Prenatal and breastfeeding nutrition
  • Maternity clothes and breastfeeding bras
  • Baby gear: Car seat, pram, bassinette/cot, baby clothes, nappies, dummies, formula, bottles and teats, breast pump, toys like rattles and chewies
  • Childcare if you go back to work

Savings Tips

  • If you can’t borrow big-ticket items such as baby furniture, prams, capsules, and breast pumps, consider buying them secondhand
  • Baby shoes look super cute, but that’s their only use – babies don’t need them

Your home

While popular advice is to upsize your home before your new arrival, your first baby can usually fit into your existing home, so don’t stress too much about buying or renting something bigger just yet. If you are planning to move, consider whether the new home is toddler-proof, and the yard is securely fenced-off, and close to amenities such as parks, preschools, and primary schools.

Savings and investment priorities

When you become parents, it is important to keep your long-term finances on track. Ironically, this is also when your expenses increase, and your income temporarily decreases if you take parental leave. Some families may be tempted to de-prioritise investing for the longer-term future, but Jennie from Simplicity suggests you think twice about this. “Taking a break from KiwiSaver contributions while on parental leave can really affect the amount of money we have in retirement,” she says. “This is especially true for women who may take an extended period out of the workforce.”

You have a few options. You could choose to make KiwiSaver contributions from Government parental leave payments, or channel some of your partner’s earnings into your own KiwiSaver account. If you’re lucky, your employer may have a policy of paying your KiwiSaver contributions while you’re on parental leave. Rather than suspending your KiwiSaver contributions altogether when money is tight, consider paying the minimum 3%. “And later on,” Jennie says, “when you can afford to, for example when the Government childcare subsidy kicks in, you could increase your contributions to 4% or more.”



Medical care is free for children under 14, and dental care is free until they turn 18, so your main child-related expenses include essential toddler items such as nappies, toddler food, clothes, high chair, and childcare costs. Toddler-proofing your home with things like safety gates, cabinet locks, outlet covers, and window guards can also add up. Then there may be books, toys, and activities to help with the children’s development.

Savings Tips

  • Make use of libraries for books and toy libraries for toys
  • Toddlers grow so fast, consider borrowing baby clothes, or buying them secondhand and then on-selling

Your home

Depending on your financial situation, this might also be the time you’re looking to buy your first home. If you meet the criteria, this is when you can use your KiwiSaver funds as a deposit. Here are some general rules of thumb to consider:

Your mortgage repayments, together with rates and home and contents insurance, should ideally be no more than 25-35% of your income.

If you add your other debt repayments (car loan, credit card, student loan) to your home ownership costs, the total should be no more than 35-40% of your income.

According to, a family of four living conservatively should budget to spend $1,500 monthly on food, $200 on utilities, and $100 on phone and internet.

Savings and investment priorities

Even though some days it seems the kids will never grow up, this is a good time to start saving for when they do. Jennie from Simplicity suggests starting an investment fund to support their university education, or setting up a KiwiSaver account that could help with first home deposit. “The key is to start early,” she says. “Even if you can only afford to contribute a small amount, like a dollar a day, over 18 or 25 years the magic of compounding returns really starts to pay off.”

For example, if you put $1 a day into an investment account earning on average 5% per annum, after 25 years you’d have almost $18,000 ($8,696 of which is compounded returns). Use this handy calculator to calculate other amounts:

Education is always a worthwhile goal to save towards, whether it’s your own or your children’s. In his book Money Made Simple, MD of Simplicity Sam Stubbs says it best: “How many years’ study you have, and how well you are paid, are closely linked. Research in New Zealand shows that a university degree is worth about $1.3 million extra in lifetime earnings.”



By the time your kids get to intermediate school, money just seems to run out the window faster than Usain Bolt. You’ll need to budget for (healthy) food – a growing boy will often eat as much as two adults, and then ask for seconds! There will be new clothes as they grow, including school uniforms, shoes, and jackets. You’ll be asked to pay for school supplies, school donations, fi eld trips, and extracurricular activities such as sports teams or music lessons. As schools increasingly incorporate technology into their curriculum, the children may need a computer or tablet for schoolwork and, of course, a phone – just for emergency purposes (yeah, right!). Add the cost of sports activities and the cost of transportation to get the team there. Medical expenses, thankfully, continue to be free – except for one dreaded word: Orthodontist!

Savings Tips

  • Shoes disappear regularly in primary school, so consider buying them secondhand (in good condition).

Your home

If you’ve bought a house, you may consider setting up some of your mortgage as a revolving credit account, to direct every spare dollar towards reducing your borrowings. Even though a mortgage is often categorised as “good debt”, the interest charged over the long-term can still be significant – and paying it off quicker can make a big difference to the total interest cost.

Savings and investment priorities

If you can during these years, keep saving! It’s up to you whether it stays in the bank or goes into KiwiSaver or an investment account.

Sam Stubbs, the founder of Simplicity, makes savings easy: “You can set up regular transfers into a savings (or investment) account that you don’t see or touch. Try to start with $3 a day, less than the price of a coffee. Every year, without even noticing it, you could have saved $1095, which compounds over time.”



When the children start leaving home, your expenses are likely to drastically reduce, and you may have more disposable income.

Your home

You may find that with the kids flying the nest, you no longer need the same amount of space and rooms in your family home. Often this can be a great time to down-size, cutting your expenses even further as a result.

Savings and investment priorities

Now is your chance to make extra payments into your mortgage, increase contributions to your KiwiSaver account, or set up an investment fund. Perhaps you could buy a rental property using the equity in your family home, or sell the big house, buy something smaller, and invest the difference. Your children may even approach you to help them finance their first home purchase, so expect exciting times ahead!

Pro Tips

  • Remember that if you meet the basic criteria and contribute at least $1042.86 into your KiwiSaver account between 1 July to 30 June (the “KiwiSaver year”), you will likely be eligible for the maximum Government contribution of $521.43. More info can be found on the IRD website.
  • On buying rental property, Liv at Simplicity suggests: “Make sure that the numbers stack up. At higher interest rates like we’re seeing today, there can be significant ‘top ups’ required over and above net rental income to service your mortgage. If you are unsure of what your best option is, it may be best to talk to an independent financial advisor to discuss your personal situation and goals.

Protecting your wealth

Separation or divorce can negatively impact wealth that you’ve built up as a couple. After a relationship breakup, you can protect your financial future by taking stock of the day-to- day finances, then concentrate on longer-term money issues and dividing assets.

  • Talk to a lawyer
  • Set up new bank accounts
  • Make child support arrangements
  • Check that bills get paid
  • Use a budgeting tool to work out a new plan for income and spending
  • Set new financial goals

More articles by Tots To Teens and  Simplicity to help families tackle the increasing cost of living:

How you can help your kids save

Tackling the hidden costs of living

Understand the power of compounding interest

Old Wisdom For Today’s Modern Money Challenges

Your Rainy-Day Fund

The Challenges of Home Ownership for Kiwi Families

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