There’s no doubt, babies are a celebration. But parents will also tell you there’s no escaping the many expenses that come with that little bundle. It can be overwhelming!
If you’re lucky enough to have a baby shower and generous friends and family, you just might have clothes, blankets, toys and toiletries to help you along in those first few weeks. All these items can add up – and it’s just the beginning! Let’s not forget medical costs, nappies, car seats and also a possible reduction in income due to maternity leave.
There’s no doubt, parenting comes with financial considerations and responsibilities. We’ve put together these seven practical tips to help you find your way:
- Have a medical aid or hospital plan
If possible, ensure you have some form of medical aid plan – this will ensure that your medical expenses don’t become a financial burden. The last thing that you want to do is pay for the medical bills with your credit card as this will completely over extend your budget.
- Buy in Bulk
When it comes to nappies, dummies, bottles and creams, ensure that you buy in bulk as buying these items in bulk is far cheaper than buying them in small amounts.
- Save, Save, Save
Before your little one arrives, the best thing to do is to save, save, save! Yes, a loan will certainly offer some relief if you happen to reach a tight spot, but saving money will ensure that you have the extra pennies to deal with any unexpected expenses. Check out African Bank’s Tax Free Investment account
- Make a budget and track spending
If your housing and other costs have increased owing to your growing family size, make a new monthly budget that reflects those added expenses. If you find you can't stick to the budget on the first or second try, don't give up, simply adjust your budget until you come up with one that works for your family.
- Plot a Future Financial Plan
Primary school, high school, university and everything in between comes at quite a hefty price. When your little one is born, ensure that you open an investment account or unit trust that is sure to grow over the next couple of years. Whether you use this money for school fees, uniforms or one day hand it over to your young adult, a financial safety net is sure to let you rest assured that your child’s future is taken care of.
- Prioritise financial goals
Many new parents feel torn between competing goals, such as saving for college, retirement and a down payment on a house. The best course is to do what you can comfortably afford, which may mean temporarily putting some priorities on the back burner as opposed to stretching yourself too thin.
- Automate your savings and/or debt payments.
Once you've identified your financial goals, you are more likely to make steady progress toward your goals if you set up automatic payments and/or deposits. By automating your savings or debt payments, you are prioritizing your goals and forcing the rest of your life to fit around them.
Having a baby is, without a doubt, a costly endeavour. However, with a little planning and creativity you can save money and start a lifestyle of making your budget stretch.