Financial planning for your pregnancy
Some tips for ensuring the costs of pregnancy don’t catch you by surprise.
Money might be the last thing on your mind when you’re expecting a baby but it’s a critical component of successful pregnancy planning, said Errol Meyer, Legal Specialist, Advisory Services at Standard Bank Financial Consultancy.
Errol said falling pregnant is usually a time of high emotion, congratulations and excitement about the new addition to the family. However, it should also be a time of very careful financial consideration to ensure that this pivotal time in one’s life isn’t remembered for the financial difficulties involved.
“It probably doesn’t come across as very romantic to start talking about finances when you find out you’re pregnant, but it’s a really serious consideration that you simply have to bear in mind when you’re expecting a new child. Probably the biggest thing to bear in mind is that there are almost always a lot of unexpected expenses that you did not foresee,” Errol said.
Everything from the cost of the birth, which can easily range from R25 000 to R35 000 to complications during delivery and the subsequent medical costs must be considered.
Here are some of Errol’s tips for ensuring the costs of pregnancy don’t catch you by surprise:
• Maternity Leave: Check with your employer to find out the length of your maternity leave and whether any of it will be paid. By law, all employers in South Africa must grant female employees four consecutive months’ maternity leave during pregnancy but they are not obliged to pay you during this time. Check with your employer beforehand to avoid unnecessary contractual disputes.
• Medical Scheme: Make sure you are aware of what is covered by your scheme and what isn’t. The first thing to realise is that it is unlikely a medical aid will take you on and provide cover after you have fallen pregnant. Your medical aid needs to be in place before the pregnancy commences. Medical aid schemes also offer different options, typically ranging from budget to premier, all providing different amounts of cover.
If you’re on a budget option, you might only be allowed to have the birth at a specific hospital network, while certain things like C-sections, home-birth or post-birth consultations with a midwife may not be covered.
• UIF: South African citizens who are on maternity leave can claim unemployment insurance for up to four months, with pay-outs varying, dependent on your gross monthly salary, up to an individually calculated maximum a month. Make sure you have all the appropriate documentation in place beforehand, such as your two most recent payslips, certified copies of your ID, the appropriate application forms as well as bank statements.
• Baby Equipment: Having raising five children, Errol spoke from experience when he said that people always over-spend on the first child while the last child has to make do with hand-me-downs.
“When you’re expecting your first child, you want the best pram, the cutest baby clothes and the best cot you can afford. But I can tell you that when the fifth child comes around you’re quite happy to put your baby in a second-hand pram.”
Errol advised dividing your baby gear into essentials versus nice-to-haves. For example, a quality car seat with the necessary safety rating is an essential item that one shouldn’t skimp on. However, when it comes to prams you can usually make do with a more affordable option.
• Plan Ahead: As with any financial plan, ensuring that you start saving well in advance of the actual event can pay huge dividends. Start putting away money long before the actual pregnancy commences and start buying supplies such as disposable nappies in bulk long before the birth. Avoid over-spending on things like the baby shower and cut down on other unnecessary expenditure, like going out to restaurants, in order to save for what really matters, your new-born.
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