Congratulations! You’re about to embark on one of life’s most incredible adventures: starting a family. While the journey is exciting, it also comes with its fair share of financial considerations.

From preparing for maternity leave to managing birth costs, here’s a guide to help new moms easily navigate their financial planning.

Before you get pregnant

If you have the luxury of reviewing your financial portfolio before falling pregnant, here are some items to consider:

  • Medical aid and gap cover: There will be exclusions if you join once you are pregnant. It is best to join these schemes early to avoid exclusions and waiting periods.
  • Savings: Consider a tax-free savings or unit trust you can call on if you need to during pregnancy or postpartum. If you don’t need to disinvest, then you have already started your little one’s education policy!

Budget for maternity leave: Know your rights and options

Maternity leave is crucial for new moms but requires careful financial planning. In South Africa, you’re entitled to four months of maternity leave under the Basic Conditions of Employment Act. Here’s how to prepare:

  • Check your employer’s policy: Some employers offer paid maternity leave, while others may provide unpaid leave or a combination. Make sure you understand your company’s policy and any additional benefits provided.
  • Apply for UIF benefits: The Unemployment Insurance Fund (UIF) provides maternity benefits for eligible employees. You must apply for UIF maternity leave benefits through the Department of Employment and Labour. You must have paid UIF contributions and submit the required documentation to qualify.
  • Save in advance: Set aside funds well before your maternity leave begins. Aim to build a financial cushion covering at least two to three months of expenses to ensure you’re prepared for delays or unexpected costs.

Prepare for birth costs: Plan for the unexpected

Birth costs can vary significantly depending on whether you choose a public or private healthcare provider. Here’s what you need to consider:

  • Public vs private healthcare: Public hospitals in South Africa provide maternity care at little to no cost, but there may be longer wait times and less personalised care. Private hospitals offer a higher level of care but have a higher price tag. Research and compare costs based on your preferences and financial situation.
  • Medical aid coverage: If you have medical aid, check your plan to understand what’s covered and any out-of-pocket expenses you might incur. Make sure to get pre-authorisation for any planned procedures and confirm that your healthcare provider is in-network to avoid unexpected costs. Many medical aids have great value adds, like postnatal home visits or even paying for your vitamins.
  • Gap cover: This can be a helpful way to pay for some of what medical aid doesn’t cover. Check your policy, though; most gap cover schemes have a maximum amount for maternity costs.
  • Additional costs: Remember to budget for prenatal visits, ultrasounds, and potential complications. It’s wise to set aside an emergency fund specifically for these expenses.

Create a baby budget: Plan for the little one’s needs

Once your baby arrives, your financial landscape will shift. Here’s how to prepare:

  • List essential expenses: Baby-related expenses include nappies, clothes, and medical care. Create a detailed list of anticipated costs and include them in your monthly budget.
  • Consider baby gear: While buying everything new is tempting, consider purchasing second-hand items or asking for baby gear as gifts. Items like cots, prams, and changing tables can be costly, so finding budget-friendly options can help manage expenses. Facebook Marketplace or moms’ groups are helpful resources.
  • Plan for childcare: If you plan to return to work, consider the cost of childcare. Research local daycare centres, nannies, or family support options and factor these expenses into your budget.

Review your financial safety net: Update your insurance and savings

Starting a family is an excellent time to review your financial safety net:

  • Manage debt: If you have existing debt, consider how it will impact your financial situation during maternity leave and beyond. Creating a plan to manage and reduce debt can help alleviate financial stress.
  • Update your will and beneficiaries: As a new parent, it’s important to ensure your will reflects your current family situation and that your beneficiaries are up to date. This can help protect your family’s financial future in the event of unforeseen circumstances.
  • Emergency fund: Maintain a healthy emergency fund to cover any unexpected costs that may arise. Aim for at least three to six months of living expenses to provide a buffer for unforeseen circumstances.

Seek professional advice: Consult a financial planner

Navigating financial planning during pregnancy can be overwhelming. It’s important to remember that you’re not alone. Consider consulting with a financial planner who can provide personalised advice based on your specific needs and goals. They can help you create a budget, plan for future expenses, and ensure your financial strategy aligns with your family plans. Their expertise can provide you with the reassurance and support you need during this time.

Final thoughts

Starting a family is a joyous occasion filled with love, laughter, and the promise of a bright future. However, it also comes with financial responsibilities that require careful planning. By budgeting for maternity leave, preparing for birth costs, creating a baby budget, and reviewing your financial safety net, you’ll be better equipped to handle the economic aspects of motherhood.

Embrace this journey with excitement and optimism, knowing that you’re prepared for the financial road ahead.

With these steps in place, you can focus on enjoying the early moments with your new baby while feeling confident that you’ve prepared for the financial journey ahead.

Remember, there’s a wealth of support and resources available to you as you navigate your financial planning. Congratulations again, and here’s to a future filled with love, laughter, and financial security!

 

Article credit Starting a family: Financial planning for new and prospective moms – Moneyweb