We've all heard that kids are expensive, but your love for them is priceless; it is a privilege to see them grow up healthy, safe, and contributing members of society. However, the financial planning to get them there can be difficult.
We have put together a breakdown of what to expect when you're expecting. This article will give you valuable insight on how to financially prepare when your family has a plus one or maybe two on the way!
From your first prenatal visit to high school graduation and beyond, your life and finances are about to change in ways you can't imagine. Nothing will put strain on your finances like the birth of your first child. But, before you get too worried, here is our checklist of things to think about before Baby arrives and be as financially secure as you can be.
Hilet Jafta, Wonga's Data Science Team Lead and a mother-to-be, was kind enough to share her financial and Baby advice on things to consider before the big day arrives.
"Having a baby is very expensive, and there are many aspects to explore before Baby arrives" says Hilet, "and a medical aid should be first on your list of monthly expenses."
Medical aid considerations
Hilet emphasizes "The importance of having a medical option that you can afford in order to avoid financial stress, which would be unhealthy given that most of your energy will be required for your newborn baby. Before Baby arrives, all medical aid options must be considered! This is a lot of work, and you must evaluate which plan is best for you, your baby, and your budget."
Speaking to the coverage selected, Hilet goes on to say "You would need to begin at least 12 months in advance with planning, making sure what your medical aid covers in detail. Each plan will have its own terms and conditions from the onset, so putting this on your top list of things to consider is a big priority."
She goes on to say "You should ask to see a medical aid specialist who can give you an exact breakdown of what you are covered for in the different plans or medical aid schemes. This will help you select a plan that matches your expectations."
Here is our breakdown of the top medical choices for the anticipated birth of a child.
Discovery Health - Pregnancy Medical Cover
Tums2Tots Baby Programme - Leading Medical Aid Scheme (profmed.co.za)
Life Insurance
Life Insurance isn’t the greatest subject to work through when you are expecting but is often overlooked by many people. Making sure your child is financially taken care of in the event of something untoward happening, needs to be given real consideration.
We've broken down some of Life Insurance options available in South Africa.
Old Mutual Life Insurance – Cover Built for You
Life Cover for you and your family - Discovery
Life Cover Quote | Personal Life Insurance | Hollard
Check-in with Workplace leave
Remember to check in with your employer to determine your leave options and entitlements regarding maternity and paternity leave. Employers may offer different terms their discretion depending on the type of industry, and your tenure as an employee. If you are fortunate enough to be granted an extended leave, this may help to alleviate financial strain placed on you due to some savings made on childcare which, for small children, can be very costly.
Discussing finances
Remember that it takes two to tango, so check in with your life partner to see where your finances are headed and how you will both navigate this new journey together. Planning for the future will leave you better prepared to navigate some of the obstacles you will face in the future.
Get your home baby organised
Hilet says, "We often spend more time worrying about the nursery's theme and décor than we do about making sure it's stocked with the right items to make your life easier... and baby's life more comfortable!"
She goes on to say, "Having everything ready to go at least 8-12 weeks before your due date so that you aren’t running around in a mad rush at the last minute. Babies have a habit of surprising us when we least expect it, so don't put it off until the last minute! Making sure everything is organised and planned helps to avoid overspending on things you and your baby don’t need."
Hilet says her top tip is keeping an eye out for gently used items, and according to her, we often spend money on new things that are only used for a short period while a used item can perform the same function for less than half the price. She advises looking on Facebook Marketplace and Yaga for second-hand baby items such as cots, prams and other useful items.
Stock up on household items
In order to save time and money, where possible, purchase household items such as paper towels, cleaning supplies, laundry detergent, dish soap, and hand soap in bulk at discounted prices as you’re sure to use these. Stock up on hand sanitizer as well because everyone will want to hold the brand-new baby, so keep some on hand so people can easily use it.
Best Online price comparison stores
When shopping on a budget, and instead of going out while pregnant, why not price compare in the comfort of your own home to eliminate any unnecessary stress? Price comparisons are always useful, as is knowing where to find the best deals. We asked Hilet for her top picks:
Shop Baby Products Online | Baby City
Babies R Us | Babies R Us Online
Stock your nursery
Becoming a mom or dad is all about preparation. Hilet suggests that "Your baby may grow more quickly than you expect, so you'll need to have diapers on hand of varying sizes. For the first few weeks, keep stocked up on new-born size diapers, but also some in the next size up. Unless you plan to use cloth diapers, disposable diapers are expensive so try to keep a supply on hand and restock as needed to avoid large financial outlays."
Hilet's finance thoughts...
- "It’s all about research from everything you and baby might need, research and plan as much as possible to avoid any financial pitfalls."
- "Utilise discounts when and wherever you can."
- "Plan your monthly shopping around sales to save as much as you can and be as savvy as possible."
- "Keep monitoring prices, even though many stores may say it’s on special, do your research to see that it’s not just a marketing tactic to lure you in."
- "Plan your purchases, especially the large and costly ones. Be patient for a better price, don’t just buy out of impulse."
- "Save more than you think you’ll need."
Stock the freezer
"This is a must-have! You'll be in a new-born haze for the first few months" says Hilet, "which is a long time to rely on takeaways. Begin stocking your freezer with easy-to-reheat meals as soon as possible. Are you going to make lasagne? When you've had a bad day, double the recipe and freeze half for a delicious home-cooked dinner later. Again, this contributes to not overspending and ensures that you have more time for the things that matter."
25 Yummy Freezer Meals to Make Before Baby Comes - Postpartum Party (thepostpartumparty.com)
Stay at home or pay for childcare
It's critical to decide early on whether your household will be dual-income or if you or your partner will be a stay-at-home parent. You will have the opportunity to share your child's developmental milestones while also having the security of knowing you are in charge of their care if you choose to be a stay-at-home parent. However, because you may only have one income rather than two, you will have to make financial sacrifices. If this is your goal, you must carefully plan to ensure that you have sufficient savings to get you through this period. Making sure you have enough saved for the first year of parenting could require a significant amount of money, and this may be largely determined by what you can afford when planning a family.
Hilet recommends "Try to save at least a couple of years in advance if you can. Depending on your path, this amount can be used to pay for day care or to stay at home unpaid for a brief period of time while you get your footing with your new-born."
As soon as you can, arrange childcare. According to Hilet, many childcare facilities have waiting lists, so you should find out who has space available as soon as you can.
Pre School
Although it may appear to be a rush, pre-school planning before Baby arrives is also essential. Pre-School will increase your monthly expenses, and having a savings pocket dedicated specifically to this can alleviate a lot of financial difficulties in the future. Hilet also says that "If you save responsibly, your savings will have had at least 5 years to grow before your child is ready for school, which can alleviate a lot of financial stress along the way."
Final Thought
Hilet Jafta leaves you with this thought that warrants serious consideration. "Firstborn finances are not always easy, but with a few smart strategies to best manage any form of financial setback, preparedness is always the best approach to be as ready as possible. And that goes for your finances and your new-born."
