First comes love. Then comes marriage. Then comes baby in a baby carriage. We all know the typical order of events, however, these days, couples have to put a lot more thought into having a baby. While your parents, who are desperately wanting a grandchild, may tell you that there’s no perfect time to have a baby and that, if you adjust your lifestyle, you can afford one, the financial implications of having a baby in South Africa are not child’s play…
For South Africans, we face economic difficulties. We need to ensure that we are ready before bringing a new life into the world. We suggest you read our tips below to see whether you’re ready to expand your family.
Run some calculations
Children are very expensive. You’ll need to buy items in preparation for the baby, such as a car seat, pram, cot, bottles, medical aid kit, clothes and more. You’ll also need to make provision for ongoing costs, such as medical aid and healthcare in general, childcare costs, diapers and food thereafter.
So, you need to assess your current budget to see if you can cut costs and save money in preparation for the baby and then afford the ongoing costs. You may need to cut down on eating out, going on holiday and other unnecessary costs to afford a baby.
Also read our 7 financial tips for having a baby in South Africa
Don’t rely on UIF
While maternity leave with the idea of the 121 day UIF maternity benefit may seem like a great time and money buffer for the arrival of your baby, the benefit will only cover a percentage of your salary. This salary cut will have an impact on your finances, especially with the added costs of the baby.
The best thing to do in financial preparation for maternity leave is to practice living on one income. This will help you prepare for what it will be like living on a tight budget, while also enabling you to save money.
Save, save, save
One of the best ways to prepare for a baby is to save up enough money for all the upcoming expenses. This will keep you from getting into more debt. Even if you just save up for the medical expenses that come with having a baby, such as delivery and doctor’s visits, this will relieve a lot of financial pressure.
Start an education fund
One of the biggest expenses parents face is the crippling costs of education. Make sure you can give your child a head start in life by enabling them with a decent education.
Check your debt situation
There is no amount of money in the world that can match the love of a parent. Becoming a parent is a personal choice that will bring you so much joy. However, having a child when you’re in more financially stable situation will potentially increase their quality of life. Another thing to remember is babies can cause you to fall deeper into debt due to the added expenses and smaller income stream during maternity leave. This can lead to a big financial disaster later on in life.
If you are in a lot of debt, perhaps speak to a debt counsellor about your situation before having a baby.