Having a baby can be one of the most amazing moments in your life. It can bring joy and love you didn’t know you needed, it can change your life in so many positive ways. But it’s also expensive.
From medical aid to food and then later school fees; the costs of having a child might be more than you think – and considering your little one’s progress through the child-care and educational system, costs will probably increase quicker than you think.
The best way of weathering the expense storm ahead, is to start planning early.
Here are 5 suggestions to help soon-to-be parents budget for a baby.
Know what you will earn
Having a baby will add to your expenses and may even reduce your income – if either parent chooses to stay at home with baby for an extended period. And even if you opt to return to work, you will need to consider child care, whether it’s hiring a nanny or taking your child to day care. According to the law, South African women are entitled to four months’ maternity leave, but it's not compulsory for employers to pay some or any of their salary during this time. Women who are receiving a portion of or no salary from their employers and who have contributed to the Unemployment Insurance Fund (UIF) can claim a portion of their salary.
Once you know what the household income will be, you’ll be in a better position to draw up a budget. To start with your budgeting click here.
Check the fine print
Review your medical aid benefits. Confirm exactly what is covered and what is not, so you don’t get any financial surprises when the baby is born. Ensure you are clear on what the medical aid will cover during your childbirth and hospital stay as well as the post-birth expenses for baby (vaccinations, emergency care, etc.). Ensure that you understand which medical items are only limited to only 1x the approved medical aid rates.
Now is also a good time to check your life insurance cover, in order to ensure that your loved ones are taken care of financially, in the even of your passing. If you do not have life insurance, now may be the time to consider it.
Save as soon as you can
Start saving - ideally when you start trying for a baby or at least as soon as you find out you’re pregnant. Be disciplined about it, even limiting your spend on ‘nice-to-haves’, and put away as much money as you can afford every month.
Stagger the spend
Don’t leave everything to the last minute. Not only will this mean having to spend a lot of money at once (rather than spreading the costs over a couple of months), but also it will allow you sufficient time to do your research on available options. Once you have a basic list of what you need to purchase (e.g. pram, bottles, baby monitor, etc.), check it with other mothers and prioritise these items.
Staggering the spend also allows you to compare prices, focussing on one item at a time, so you’re sure you’re getting the best deal. Learn from other parents through social media, books or online community groups for hints and tips, focussing on the important items first and allowing you enough time to work systematically through the priority items.
Not everything has to be brand new
When it’s your first child, you’ll be tempted to want everything brand new and shiny, but cots, car seats and prams can be expensive. Often you can find good quality second-hand items such as prams online, from shops that specialise in refurbishing and reselling these items or from friends whose babies have outgrown them. Keep in mind also, that for many of these items, they will need to be replaced in due course (e.g. car seats). Buying pre-owned at first, could just provide you with the financial breathing space that you will require 6 months after baby’s birth.
Parenting can be overwhelming, especially for first-time parents. Through planning ahead, you can lighten the financial burden and may help to reduce some of the stress you may face once the baby is born.