Becoming a parent is one of the most rewarding experiences anyone can have. For many couples, having children is a crucially important part of family life and a milestone in the marriage or relationship.
With the great excitement that comes with expecting a baby, it’s also important to consider the financial changes that will need to take place in the household once a new member of the family is born. Here are some important facts to bear in mind:
Children Cost Money
This may sound like an obvious statement, but many first-time parents find it difficult to believe just how expensive it is to raise children these days. From the cost of nappies, prams, feeding formula and a wardrobe of adorable baby clothes to the long-term savings that are necessary to ensure your child enjoys a good education, having children involves some careful financial planning.
Additional Household Costs
Your baby is a third member of the household and just like you, your new son or daughter will require clothing, food, personal items, and entertainment. Many new parents underestimate the cost of these items, but a baby’s monthly expenses can run into thousands of rand per month, and this amount needs to be budgeted for.
How to Balance Your Household Budget
Ideally, you should start saving an extra amount each month long before your baby is born. This will allow you to absorb the added costs involved in raising a child. It’s wise to set up a room in your home as a playroom before your baby is born, buying as many items as possible beforehand. You may also need to cut back on expenses like eating out, holidays, and other items which you took for granted before your child arrives – this is especially important if one parent is giving up work for a few months or years after the baby is born.
Paying For the Future
From the time your child is born, you should be contributing to an education fund on a monthly basis. Depending on what type of education you’d like your child to have one day (a private high school or tertiary education), you may need to adjust your contributions as time goes by.
If you need any assistance in planning the financial aspect of having a baby, speak to your financial advisor today.