Planning to be a parent?

expectantWith the spotlight on youth this month, you may be among those thinking about a visit from the stork. If so, here’s your financial to-do list.
Expectant parents and those planning a family may have started visualising their future bundle of joy. But while a new baby will capture your heart, it’ll also capture a fair portion of your family budget! Pregnancy and parenting involve many hidden costs, warns Danelle van Heerde, Head of Advice Processes and Tools at SPF.
‘Above the known costs, there are lots of small things for which parents don’t always budget – and these can add up to big costs. ‘Go into this new life stage with your eyes wide open and draw up a financial plan that considers the implications of each stage of the pregnancy as well as the months and years that follow.’

What your plan should cover
Pre-pregnancy:

  • Make sure your medical aid’s maternity benefits are sufficient. If you aren’t on a medical aid, sign up before you fall pregnant. Most medical aids won’t sign you up once you’re already pregnant. Taking out gap cover is also useful as it can help pay the deficit between what your medical scheme pays and what service providers charge.

First trimester:

  • Start saving for big items like the pram and baby cot.
  • If you don’t have medical aid, find out from various providers, for example, hospitals, midwives and birthing centres, how much childbirth will cost and start saving for that.

Second trimester:

  • Start thinking about updating your will, appointing a legal guardian, increasing your life cover and emergency fund, and starting an education fund.
  • If you’re an employee, sit down with your HR manager to understand your maternity and/or paternity benefits.

Third trimester:

  • Keep receipts for all purchases so you can exchange items such as nappies for a bigger size if your baby outgrows them. Also look for specials.
  • Ensure your budget accounts for the possibility of reduced pay during maternity leave, the baby’s day-to-day expenses, insurance and if you have medical aid, the additional premium for your new dependant.

Birth:

  • Add your new baby to your medical aid immediately.

After your baby has arrived:

  • Budget for check-up consultations with your paediatrician as well as for vaccinations if you’re not going to use the free service in government health clinics.
  • A quick scan of online adverts shows monthly childcare expenses start at around R1 500 – a figure that can rise as high as R8 000 for a full-time nanny.
  • Reconfigure your monthly budget to cover nappies and toiletries. These can cost up to R400 per month, respectively.
  • If you or your partner have decided to stop working or reduce your hours, take the adjusted income into account and structure your family budget accordingly.