How to Prepare Financially for a Baby

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Having a baby is a game changer and a huge financial commitment. A baby will give you a run for your money if you are not careful. So, here is how to prepare financially for a baby through these practical tips to get ahead of the game and prepare for your baby.

Pre-pregnancy Planning

Pre-pregnancy is the phase before conceiving. It is the time where you put together your pre-conception diet, get your exercise done and watch your general health as you anticipate smooth pregnancy and a healthy baby, preparing financially for the baby should also be at the top of your do’s.

Here are some of the things you’ll need discuss with your partner and do:

Medical Cover

The first and most crucial thing you got to get ahead of. It is important to understand your medical cover and the costs that are associated with having a baby. Make sure that your medical scheme’s maternity benefits do in fact cover majority of your expenses if not all. If you are not on any medical scheme, then sign up before you fall pregnant. There are some schemes won’t even touch you once you are already pregnant.

Life Insurance

I know that life insurance is not usually at the bottom of the pile of things to do for singles with no dependents or professional working couples. That is why I feel that having a baby should act as a trigger to get your cover in place. Parents/guardians (breadwinner and primary caregiver) need to have life insurance.  It is important to consider what the surviving partner needs, especially when it is the breadwinner.

Make A Will

Now that you are taking this step, you will need a will. I mean life is full of uncertainties and issues like assets and even appointing a testamentary guardian for your children needs to be sorted. I am aware that this is Africa, and children will always be taken care of by family. However, you don’t want them floating around from relative to relative without an anchor.

Baby & Emergency Fund

Create a baby-fund for miscellaneous baby and mommy expenses. Start saving in a special “baby account” before you have a baby. This will ensure that you have money for unexpected costs. This money will be useful for maternity clothes, additional healthcare costs, and any additional costs the baby brings (including big items such as the pram or baby cot).

Pre-baby Budget

Adjust your budget accordingly in anticipation of the baby. Include all the medical costs that will come by with check-ups and items for the baby. Babies come with plenty of expenses so it is important to a list of necessary items and optional buys. This way, you can have all the necessary items bought before the baby arrives. Financial preparation will always helps to alleviate the stress associated with unexpected issues that may arise along the way.

Childcare

Childcare is a huge decision for parents these days with all that is going on. Many parents have no choice but those who do can plan to either raise children themselves, hire help or take their children to daycare facilities. All these options will affect your financially – some more dramatically. However, researching your options and having this discussion ahead of time will allow you to prepare for the financial change and minimize any related stress.

First Trimester

The first trimester of pregnancy essentially covers between 1-13 weeks, or the first three calendar months of the pregnancy.

Antenatal Services

The health of you and your unborn baby is of utmost importance.  Therefore, as you start out on this journey, you’ll need to find a great clinic with a competitively priced gynecologist and excellent reputation. Get registered at a good antenatal clinic that offers great services and antenatal classes. Make sure you get your antenatal consultations done religiously.

Second Trimester

The span of the second-trimester spans between 13 -27 weeks of pregnancy. This time is known as the honeymoon phase as nausea has subsided, emotions even out and hence it is the best time to get some of your finances in order.

Financial Plan Review

At this stage, your morning sickness has passed and you can use this trimester to review your long-term financial plans. Having a baby growing in your tummy can really clarify and put things into perspective. You can start rethinking the decision you made such as your will, guardian choices, estate planning, life cover size, emergency fund or even starting an education fund.

Employee Maternity Benefits

By now everyone probably knows that you are expectant and therefore it is the best time to meet your HR manager. You HR manager can apprise you of your maternity benefits. You may be legally entitled to three months of maternity leave, but this could be unpaid.

Third Trimester

The third-trimester spans between 29 -40 weeks of pregnancy. Everybody is swooning at how pretty you look and emotions are high in anticipation of the baby.

Here are some things you need to do at this time:

Baby Shower

I love baby showers. They make me happy and delighted. For me, it is a time to take down notes on mum’s wisdom. However, for you, planning to be expectant it is the time to start whispering to your besties that you’d like to set up a registry for your baby shower. You don’t want to end-up with  20 teddies and no diapers!

Post- Delivery Budget

Recurring costs of childcare, nannies, diapers, milk, formula and other food items will change your household expenses completely. Plan for these things now to avoid being caught off guard.

Pick A Pediatrician

Within the first week of birth, your baby will need to have a doctors appointment. Talk to family and friends for recommendations of a great pediatrician. Choose a pedestrian that is within your insurance network. Ask the clinic where they are situated or call your insurance company to verify that they are within your network.

Post Natal

Baby’s Health Insurance

Add your newborn baby to your existing health insurance policy. It is better to do it sooner rather than later as you do not want to be caught up with a sick baby and no coverage.

Education Fund

Good quality education can be quite expensive. Making it manageable by starting early is the only way to go. It may seem premature to talk about college before your baby is born but when you think about the costs, you will be grateful you started early. Therefore, having this discussion with your spouse and planning ahead of time is the key to being able to give your children the best in terms of education.

In the End…

The amount of money needed to raise a baby can be intimidating when you actually crunch those numbers but it is not difficult to prepare for it. It just takes some organization, forward thinking and careful financial planning for a baby. Overall, it means that you will spend less on unnecessary things and save wisely. By planning ahead and you’ll make financial planning for new parents look like a breeze and enjoy the ride as a new parenting.

If you enjoyed this, you might also enjoy these posts on financial planning, kids and money:

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Irene Makanga
Irene has an MBA in Finance and is an avid businesswoman, passionate about financial literacy.

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