Financial Planning

Having a financial plan to prepare for your first child is important

The arrival of your first child is one of the most exciting times in your life. Therefore, it is vital that parents spend time to prepare financially, because this life stage can have a huge impact on your family budget.

Parents should draw up a holistic financial plan as soon as they know they are expecting a baby. This plan needs to address a series of critical events and must be drawn up in consultation with your partner, employer, medical scheme provider and financial adviser.

Below is a list of some ways to prepare financially (and more generally) for your baby:

financial checklist

Before falling pregnant

Before falling pregnant, couples need to make sure they have the right type of medical scheme to ensure the type of care they expect during pregnancy, labour and after birth. Some medical schemes charge a co-payment if you do not have the right medical scheme option.

financial checklist

During pregnancy

First trimester

Find a gynaecologist with whom you are comfortable and make sure his/her prices are competitive.
Start saving for big items, such as a new pram and cot. 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 and these can cost up to R300 for a month’s supply.

Second trimester

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 product 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 some agencies that may be able to help you with the administration for your UIF.)

Third trimester

Check if you have this option as a benefit of your medical scheme.
COVID has taught us to be creative and adjust. That said, consider having a digital or drive-by baby shower with friends and family who’ll buy you essential baby items.
Keep receipts for all purchases – you can exchange items like unused nappies for a bigger size if your baby outgrows them.
Find out from your medical scheme how long you’ll be able to stay in hospital and what is included and excluded by your plan.

financial checklist

Birth plan

Ensure 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, tends to cost more than a “normal” birth. Considering financial implications is particularly important where specific service providers, such as a gynaecologist, anaesthetist or paediatrician, charges more than medical scheme rates.

If you don’t belong to a medical scheme, you will need to save up a large sum of money to cater for a caesarean or 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 hospital, such as jaundice treatment, this may add to your hospital bill.
Keep your baby bag simple – your baby will be in hospital gear the whole time anyway.

financial checklist

When your baby has arrived

Monitor your physical and emotional well-being for signs of post-partum depression.
Ensure you have enough help during the first weeks.

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 as you’re supposed to. Speak to a financial planner to help guide your important financial decisions.

Sanlam Life is a Licensed Life Insurer, Financial Services and Registered Credit Provider (NCRCP43)