20 Jun 5 Ways to financially prepare for a baby.
If you are expecting or considering having a baby, congratulations to you. It is a big milestone, scary and exciting at the same time. While no one can prepare you for the emotional roller-coaster (trust me, been there done that!), I can at least give you tips on how to prepare yourself and family financially for the new chapter in your life.
- Review your medical aid
Talk to your medical aid provider about which benefits you qualify for i.e. how many visits to the gynaecologist, tests and scans you are allowed. Find out important information about out-of-pocket procedures you have to pay for and start saving for those. Also find out about the timelines of when to add the baby onto the medical aid etc. Plan ahead of time.
- Create a new budget
You have to create a new budget to accommodate the new member of the family. In the first few weeks when my son was born, I found myself buying very silly things, now that I look back, but as a first time mom, I would have done anything to make sure my little man is comfortable. All I am saying is you have to budget even for those miscellaneous expenses that just pop up.
You want to sit down with your husband or partner to talk through the changes to your budget. If your company does not pay you 100% of your salary when on maternity, you need to take note of that or if you do decide to be a stay at home mom, that impacts the household budget.
- Set up a baby account
Setting up a baby account will put you at ease for the major purchases like pram, decorating the baby’s room, baby cot etc. You have 9 months to build it up. Save a percentage of your income into a different bank account from the one you use daily. Also wait to have a baby shower before you buy most items as you will be gifted with most essentials.
- Start an education fund
Sending your child to private school from grade R to grade 12 in South Africa will cost you around R3.7 million, according to the City Press. That is no short-change. So start early, as soon as they are born if not before! Start a unit trust investment that is moderate in risk for their primary and university education. For crèche it would be a better idea to save the funds into a money market account.
- Purchase life insurance and create a Will
Life cover and your Will go hand-in-hand in providing you with a peace of mind, that should anything happen, your baby will be protected. Life cover ensures that your house and liabilities are paid off, that your kid(s) continue to go to the same schools that you would want them to. You can use life cover to leave a legacy as well. Your Will ensures that your estate get wound up quickly without any hassle. Tip: also review your beneficiaries with your Pension/Provident fund and any other investments/policies you and your partner have to include your new baby.
Smart tips (taken from thebabygroup.co.za)
If you want to find ways to stretch your baby budget, make these smart buying choices:
- Buy quality, rather than quantity, and you won’t have to replace it in a few months’ time.
- Do your research before choosing what items to buy.
- Only buy what you need for this stage, and keep future purchases for later. Create a checklist to see exactly what you need to buy.
- Join reward programmes that give parents-to-be discounts on baby.
I know all of these can sound over-whelming but do it, get it out of the way and enjoy the journey to parenthood.