We've given you three checklists: one for the early days when it feels like you've all the time in the world, one for three months before the due date, and another for your little one's first birthday.
The early days (18 months to 6 months before the expected date)
It’s exciting to plan how you can start your family - while you have some time, go through the this basic checklist to assess your financial stability. If you deal with any problems now, it'll be less stressful later in the pregnancy. You should have a clear idea that:
- You are financially stable with a regular income.
- You have a plan to be comfortable in a home, whether it’s a rental or your own home - a pregnancy will be less stressful if you know you’ll have a roof over yours and your little one’s head.
- You have discussed the finances with your partner or anyone else that might give you support - you might want to find out if one of you gets parental leave, and if not, who will cover the bills during the first few months.
- You have medical aid and an understanding of what your medical costs are likely to be.
- You will have the support you need in terms of childcare and emotional help after those sleepless nights.
If you can’t check all of these off - the important thing is not to panic. Ask your family or community for information on how you can best prepare yourself.
Your financial checklist:
- Get your baby budget planned - you should set up two budgets: one for the initial items that are often quite expensive (car seat, stroller, etc), and another for your monthly costs (for example, nappies, bottles and so on). If you need help with some items, ask other parents for advice, whether in real-life or through social media groups. There are often many hand-me-downs and preowned items available in a community. You can also save money by investing in the essentials (like the best car seat possible), and then considering doing without that expensive wall mural or latest bathing accessory!
- Create an emergency savings account - this is a small amount that you put aside each month. Keep it in an account that you can easily draw in if there’s an emergency, like an unexpected medical bill in the next few months.
- Make sure that you have some income protection insurance. Income protection insurance is a type of life insurance that pays out a monthly amount if you get very sick or disabled so that you can no longer earn an income. This is very important because if disaster strikes at the time of the birth, the last thing you want to have to worry about is the impact of not having an income.
- Start researching life insurance that will make sure that your baby will be provided for if you die. Note that if you already have other dependents, you should have a death benefit in place already.
- Write a will or change the one that you have now so that it takes account of the new arrival - this will ensure that the baby is provided for if anything happens to you or your partner.
- Put together a long-term plan to pay for education - while school still seems far away, it’ll be far easier if you start putting away a small amount each month than if you try to find the money the year before it starts.
Three months or less before the baby is expected
Now the fun starts - it’s time to buy the larger essential items, like the car seat, cot and stroller and get prepared for the first few months of everyday provisions.
It’s also time to hold your baby shower - a great opportunity to get some support for the new arrival, and some of the essential items!
Finally - take a careful look around your home. Although it’ll be a few months before your baby is mobile, time flies. So have a look at any changes you’ll have to make, for example, putting up safety gates and covering up any exposed plugs or electrical sockets.
Your financial checklist:
Before you start, have another read through this article. If you spot any gaps, now is the time to address them. If you have those points covered, here's your to-do list for this stage:
- Create a detailed baby budget for monthly costs.
- Get the baby shower list done with your list of important items in mind.
- Make sure that your emergency savings budget is accessible in case you need it in the next month or two.
- Make sure your medical aid knows about the new arrival and that they will be added to your medical aid plan.
- Buy life insurance if you don't have it already - and make sure the start date is on or slightly before the new arrival.
- Review your will and make sure that those close to you have access to a copy.
At the first birthday
Well done - it’s a wonderful feeling when your little one turns one year old. You’ve got through many sleepless nights and passed many milestones. Now is time to take stock and make sure that your financial plan is still on track.
Your financial checklist:
It’s now time to review and re-energise your financial plan. You might find that many things have changed, or very little. Ask yourself these questions:
- Do you still have enough in your emergency savings account? Do you need to increase or decrease the amount you put aside each month?
- Will your baby be provided for if you or your partner passes away or loses your income? Are your income protection and life insurance policies up to date with your latest information?
- Have you reviewed your will? Does it still reflect your wishes for how your baby should be taken cared of if you pass away?
- How is your education planning going? Now might be a good time to start an investment that will mature in five years, when your little one starts primary school
- Are you still happy with the medical aid that you have? Are you finding it is covering most of your needs?
There’s certainly a lot to think about, but it’s all manageable. As a financial adviser, I like to meet with my clients to discuss the impact of the new arrival on their finances. That way, new parents can rest assured that they are covered and not have nagging worries about it. If you’re a new parent or expecting to be one, please get in touch.
Let me help you to plan for your new arrival.
