The cost of raising a child in these tough times
Finding out you are going to have a baby is exciting and means your life is going to change in many ways. You have to adjust your life emotionally and most importantly financially. With the emergence of the Corona virus, circumstances of many people have changed. Some have lost their jobs while some have had …
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Finding out you are going to have a baby is exciting and means your life is going to change in many ways. You have to adjust your life emotionally and most importantly financially. With the emergence of the Corona virus, circumstances of many people have changed. Some have lost their jobs while some have had to confront life with salary cuts. With these, the joy can easily turn into stress as you count what the baby needs. Most of the expenses around a baby when they are born and a couple of months later are clothes, milk and food, toiletries, a nanny to take care of the child as you work, whether from home or the office. As the baby grows, so do their demands and the cost. When you’re dealing with the excitement of finding out you’re pregnant and the millions of things you’ll have to do before the baby arrives, budgeting may not be at the top of your list. But it is very important.
The cost of raising a baby
Marlies Kappers, chief marketing officer at a leading financial services provider, says it’s difficult and probably not that helpful to work out an average cost, because expectant parents’ circumstances and choices differ so much. However, it is probably be more than you’d think.
Budgeting 101 for soon-to-be parents
Every cent counts
Expectant mothers can go on maternity leave any time from up to four weeks before the due date. South African women are entitled to maternity leave, during which time their jobs, or an equivalent job must be reserved. But, employers are not required to pay some or any of their salary during this time. If they are getting a portion or no salary at all expectant moms can claim from the Unemployment Insurance Fund (UIF) but they don’t get close to what they get as a salary. You have to consider that The UIF payout has to cover the expenses in the household plus cover expenses related to the child. Once you know what the household income will be, you’ll be in a better position to draw up a baby-friendly budget. When you budget, remember that the expenses begin before the baby is born. For example, you’ll need maternity clothes, to prepare the nursery and cover medical expenses. A suggestion is to update your budget each trimester.
Shop smartly
It’s better to spread the costs over nine months rather than leaving everything to the last minute. If you buy at one go, you will spend a lot of money at once and chances are you’ll forget something important or buy things you don’t really need. The hospital usually has a list of the things you and the baby will need. Get the list as early as possible to start buying.
Get your finances in order
Make an appointment to see a qualified financial adviser, who’ll be able to do a needs analysis and recommend appropriate products. Review your medical aid and find out exactly what is covered and what isn’t, so you don’t get any financial surprises when the baby is born. Even before the baby is born, you may need to cough out extra cash for tests that are not covered by the medical aid. Anything can happen during labour, so make sure you have an up-to-date will, so that there’s provision for your baby. If you don’t have any life insurance now may be the time to consider taking out one.
Start saving
A baby may come as a surprise or be planned, but whatever the case you should start saving as soon as you find out you’re pregnant. Open a bank account, such as a tax-free savings account, and put away as much money as you can afford each month.
Don’t be blinded by the bling
Times are tough with the economy not doing well so don’t feel pressured to keep up with the Kunenes. Don’t go for brand new and shiny cots, car seats and prams as they can be expensive. Rather find a good quality second-hand items from online, shops that specialise in refurbishing and reselling baby items. “Doing some financial planning when you find out you’re pregnant may help to reduce some of the stresses after the baby is born,” Marlies advises.