Preparing Financially for Your Child’s Birth
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Preparing Financially for Your Child’s Birth

By Lee Hancox, 9 December 2021

The arrival of your first bundle of joy is one of the most exciting times in your life. But as well as dreaming of nurseries, booties and teddies, it is vital that parents spend time getting prepared financially – because this life stage can have a huge impact on your family budget.

Lee Hancox, Head of Channel and Segment Marketing at Sanlam, says parents should draw up and stick to a holistic financial plan as soon as they know they are expecting. “There are so many financial unknowns and you cannot anticipate all costs, but drawing up a well-considered financial plan is the first and most important step towards ensuring your peace of mind.”

She says the plan needs to address a series of critical events and must be drawn up in consultation with your partner, employer, medical aid provider and financial adviser. Here some experts offer tips on preparing financially (and more generally) for your baby.

1. Before Falling Pregnant

  • Before falling pregnant, couples have to ensure they have the right level of medical aid to ensure the type of care they expect during pregnancy, labour and after birth. Some medical aid practitioners charge up to 400% of the costs covered by medical aid. Remember, waiting periods generally apply to medical aids and gap covers, therefore it is essential you have this in place before you start thinking about falling pregnant.
  • Doctors often recommend that women take folate for at least three months before falling pregnant, so be sure to budget R80 – R150 per month for these

2. Pregnancy

First Trimester

Women often underestimate the enormous impact pregnancy will have on their physical and emotional wellbeing. During your first visit to the doctor, you are likely to undergo tests to monitor your health and the growth of the baby. These tests, which may be costly (expect to pay anything up to R2500) include those for blood pressure, blood glucose and German measles, as well as your first sonar scan. Some are not covered by basic medical aid plans so need to be accounted for. Your doctor may be able to give you a list of all the consultations and assessments that will be required for the duration of your pregnancy as well as the associated costs.

Checklist

  • Find a gynaecologist you are comfortable with and make sure they are competitively priced
  • Depending on the service provider, antenatal consultations could easily cost up to R2 500 for key appointments, while those in between could cost up to R850
  • Become familiar with your medical aid’s maternity benefits
  • Start saving for big items, a new pram and baby cot can cost between R500 and R10 000 each! You may even consider starting to scout for well-cared-for second-hand items.
  • During this trimester, your doctor may recommend that you start taking additional supplements, such as omega 3, calcium and a multivitamin. There are products specifically designed for pregnancy which can cost up to R300 for a month’s supply.

Second Trimester

“During the second trimester, you will have moved past the morning sickness phase and, hopefully, be feeling great. Use this time to review your long-term financial plans. Specifics you and your partner will need to agree on and discuss with your professional financial adviser are: updating your will, appointing a guardian, adding your child as a dependant on your medical aid and retirement fund, revisiting your estate planning, increasing your life cover and emergency fund, and starting an education fund,” says Hancox.

“In this trimester, you can opt for additional tests, including those for fetal anomalies like Down’s syndrome. These tests could well fall outside your medical aid limits and will need to be budgeted for; they are likely to cost up to R2 400, although this is dependent on your service provider.

Checklist

  • Stagger your baby purchases, from essentials to ‘nice-to-haves’. You often don’t need as much as you think you do. Ditch the latest trends circulating on Pinterest, Instagram and TikTok, and rather speak to your friends and family to find out what baby products really came in handy for them.
  • Sit down with your HR manager and make sure you fully understand your maternity benefits
  • Prepare to claim for UIF. Depending on your company’s policy, you can expect to receive only a portion of your gross salary for a maximum of four months (there are agencies that can help with the admin for your UIF).

Third Trimester

During this period, your budget will need to take into account your maternity leave, your living needs, savings, insurance, medical aid, and essentials needed for the baby. You should also consider your birth plan, including where and how you wish to give birth.

Checklist

  • Attend antenatal classes. The prices of these vary, and can cost up to R1 200, depending on which service provider you’re using. Some medical aid plans allow you to claim some of these expenses back.
  • Finalise your birth plan
  • After your baby shower (digital or drive-by baby showers in a COVID world could save costs too), shop for essentials but do so with a budget in mind to avoid being swayed too much by emotion (you’ll find yourself believing only the very best will do for your poppet)
  • Keep receipts for all purchases – you can exchange items like nappies for a bigger size if your baby outgrows them
  • Book the birth with your desired hospital
  • Find out from your medical aid how long you’ll be able to stay in the hospital and what is included and excluded by your plan. For example, if you wish to upgrade to a private room, check with your medical aid if they will cover this upgrade, or if you will be required to cover the difference by paying out of pocket.

3. Birth

You are now finally ready to welcome the new addition to your family. However, you can only plan for the birth of your child up to a point – there are numerous factors which could impact your particular experience as well as your finances. These include your and your baby’s health as well as the circumstances of the birth.

Checklist

  • Ensure that your birth plan is clear to your gynaecologist, the hospital and your partner. Remember, things may not go as planned, so think about the various scenarios and their financial implications. A caesarean, for example, would tend to cost more than a “normal” birth. This is particularly important to keep in mind where specific service providers, such as a gynaecologist, anaesthetist or paediatrician charge more than medical aid rates.
  • If you don’t have medical aid, you will need to save up at least R25 000 for a caesarean and R20 000 for a natural birth at a private hospital, depending on the hospital. But don’t forget to take into consideration any additional costs. If your baby needs extra care in the hospital, such as jaundice treatment, it can really add up.
  • Keep your baby bag simple – the baby will be in hospital gear the whole time anyway

4. Your Baby Has Arrived

At last, you’re safely home with your baby. Depending on your financial plan, you may have budgeted for additional help at home. However, this period remains a physically and emotionally taxing period and requires a fair amount of planning and resources.

You may also be affected by what is known as the “baby blues”. All mothers process the experience of childbirth differently. There may be latent feelings of trauma which, exacerbated by exhaustion, could manifest after the birth. This may indicate post-partum depression, which needs to be addressed by your doctor immediately.

Checklist

  • Monitor your physical and emotional wellbeing for signs of post-partum depression
  • Ensure you have enough help during the first weeks
  • Start reviewing childcare options, you could pay over R3 500 for a home-based nanny and over R2 200 for daycare monthly

“It is easy to assume that after the baby is born, you will be the same person you were at the start of this journey. However, the reality is that you have changed, and so have your circumstances. Careful financial planning for every step of the way will allow you to enjoy this special time the way it is supposed to be,” concludes Hancox.


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