How to budget for a baby

 The costs of having a baby can vary significantly depending on your lifestyle, wants and income, and therefore, having a baby and raising a child is a unique experience for everyone.

As you prepare for a little one, it’s essential to financially plan for both the immediate and ongoing expenses, as well as the financial measures you should put in place to protect their future. Part of that planning process is informing yourself about the expenses coming your way so that you can budget appropriately. Here’s a basic overview of what you can expect as you’re expecting*. 

Starting off

Conservative estimates indicate that it can cost around R10 000 per month in today’s economy to raise a child, which means that over an 18-year period, factoring price increases, you can expect to spend over R2.5 million.

This figure only takes into account the basics and day-to-day essentials, which is why it’s crucial that you start planning for the onslaught of all the expensive extras, such as tertiary education, potentially specialist or developmental care and extra murals.

Bringing your baby home

• Before you spend anything on your baby, you need to take into consideration the prenatal costs, from doctor’s visits to scans, potential tests, vitamins and maternity clothes. A medical aid with a good maternity cover will go a long way in shouldering the costs
• If you’re having the baby in a private hospital, it can cost anything between R25 000 and R45 000 for the delivery and a 3-day hospital stay
• Setting up a space for your baby can also add to your bill. Depending on what you’re looking for in a nursery, you’ll likely buy some furniture (e.g. a changing table and feeding chair) which could cost from R5 000 upwards (or even R5 000 apiece)
• Bathing aids (bath station, towels and cloths), clothing, blankets and toiletries etc. need to be factored in

Financial planning to protect your family

• Nappies will be a continual expense for the first years of a child’s life, and you’ll go through many. Depending on the brand and size, on average, you could be spending from R300 per month on nappies. Plus, you’ll need lots of wipes, which again, based on brand and amount start at about R30.
  Unfortunately, the eco-friendly option isn’t a cheaper option as a reusable nappy can cost anything from R150 per nappy, and you’ll need plenty on rotation, plus the inserts and nappy liners. You also need to factor in the time and cost of keeping up with the laundry.
• Baby’s feeding needs could see you buying bottles, which depending on brand and size could cost anything between R50 and R300 per bottle, plus formula starting at around R70 (depending on your brand and baby’s requirements) and breast pumps (a manual one costs from R250).
• Remember to factor in vaccinations in your budget. You can choose to vaccinate your child at a government clinic or privately. If you do so privately, consider the cost of the vaccine plus the consultation cost; this will differ based on your vaccination schedule.
  Plus, the government only takes care of vaccinations until the age of 1, and there are certain ones they don’t provide, so you’d have to pay for those yourself.
• Baby’s safety and your convenience also come at a cost. A car seat can start at R1 000, and baby strollers/prams can range from R250 upward. Keep in mind that when you opt for the cheaper seat or stroller, they’re often limited in terms of how long you can use them, so you’ll end up having to purchase another one.
  So, do your research about the most economical option that provides the most benefits for the longest time.
   

Financial planning to protect your family

With so many costs associated, where do you start planning for the future of your family financially?

• Have a Will A Will is something everyone should have, but it’s crucial for you, as a parent, to ensure you have a designated guardian of your choice to take care of your child should something happen.
• Have medical aid and gap cover Anything can happen at any time to you or your baby, and being financially covered for the medical costs could be lifesaving. Gap cover also protects you against the financial shortfalls when medical aid doesn’t cover a procedure or specialist.
• Start saving Educating your child is expensive, but you’ve got the advantage of time on your hands. You can start small, but consistently adding to it will see you grow that money and benefiting from compound interest earned over time.

Top tips that save you money

• Buy second hand: Babies grow fast, which means you’ll also outgrow your need for certain items, such as furniture, prams, changing mats, cots, baths, breast pumps and clothes.
• Look out for specials: Know what you need and what each thing costs so that when a good price
• Don’t go overboard: It’s tempting to buy all the cute things, but your baby will only use it for a short while.
• Buy as you go: Buy what you need now or in the future. Even if it’s a good deal, you might never use it, or it might not work for your family’s needs.

*Cost amounts are estimates only and are subject to change. Disclaimer: This article is solely intended for information. It does not constitute financial, tax or investment advice or recommendation. Please speak to a financial advisor or registered financial professional before making any financial decision(s). Standard Bank, its subsidiaries or holding company, or any subsidiary of the holding company and all of its subsidiaries make no warranties or representations (implied or otherwise) as to the accuracy, completeness or fitness for purpose of the information provided in this article or that it is free from errors or omissions.