Sjoe, babies are expensive
Eish! Babies are expensive - how do we budget for a child?
People say that if we knew how much having a child is going to cost we would all think twice about having children. However, you should measure your child in joy, not in money. Having a child might be expensive but it is a priceless experience!
You want to give your child the best you can. You want to make sure that your child is well taken care of and receives a good education. Therefore, you should be aware of all the expenses you can expect and start planning now!
Get your finances in order.
Here are some tips to help you to get clearer on the extra costs and their financial impact once you have a child.
Draw up a table with two columns. On the left hand side write ‘Life before Baby’ fill in all your current expenses and add up the total. On the right hand side write‘Life after Baby’and fill in all your current expenses plus all the new expenses that you will incur for the baby.
Look at the difference in the total. That will give you an idea of what your new financial reality will be. Can you afford that? Do you need to make changes to your current spending? Do you still have time to start saving before your child is born?
What should you include in your baby budget?
A child costs quite a lot in their first two years of life. Some of the most expensive items can be nappies and formula. You also need to include barrier cream and toiletries, baby food, child care, medical expenses and clothes.
Don’t forget the baby gear like a cot, a car seat, pram and toys. And don’t forget to start saving for your child’s education.
You want a happy and healthy baby so it is not a good idea to save on formula, food or nappies. Rather save on gear and toys. Babies don’t care if they have expensive toys or not.
What else do you need to keep in mind?
- Do you know how much of the costs of the actual birth is going to be covered by Medical Aid and how much you will be liable for? Do you know when you should add your baby to your Medical Aid?
- If you qualify for maternity leave, do you know how much of your salary you will receive during that time?
- If you decided to be a ‘stay-at-home-mom’, what is the impact on your household income?
- Do you know the costs of childcare centers and baby sitters in your area?
- Do you know how much the medical or clinic expenses are?
Tips to save:
It is not impossible to save on some of the costs of a baby it just needs a bit of planning and an awareness that if you are financially responsible it benefits your child in the long run.
You can save on formula if you breastfeed. Some people prefer to use cotton diapers and not buy nappies. You can also prepare your own baby food. You can buy second hand or cheaper baby gear and you can save on clothing by having two or three beautiful sets for going out and some cheaper clothes for when you are at home.
Think about these questions:
- What would you do differently if you had another child?
- What are you hoping to teach your child about money?