Budgeting for baby
HAVING a baby can be the happiest experience; however, not being adequately financially prepared for it can dampen the celebration. As such, proper financial planning is required to ensure that the process goes as seamlessly as possible.
Some women plan years before conceiving, others plan financially just months before, and quite a few start planning only after they’ve conceived. But regardless of how long the planning was, the most important factor is that there is some amount of preparation done.
Financial advisor and mother Dennise Williams says the best way to plan for a child is to put away money in a separate savings account for that child only. This will make the cost of having and taking care of that child easier on the parents.
She says that when planning for a child, the parents must consider the months after confirming the pregnancy, because the cost of going to the clinic and ensuring that all is well with the child will have to be factored in.
The needs of the child after birth are very important as well. The parents must consider how they are going to take care of the child when he/she is born.
Here are some tips provided by Williams.
1. If you are employed, you are entitled to three months’ maternity leave, two of which are paid for. In these three months you can bond with the child and put away some of the money from the salary you will receive while on leave. After the three months, you have to think about what you will do. Are you going to buy formula or are you going to use a breast pump?
2. Buying formula is going to require a good amount of money from your salary. Diapers are another money bleeder. What type of diapers can you afford? How many are you going to buy at any one time? If you are a stay-at-home mom, there is a possibility that you can use nappies (cloth diapers) which will alleviate some of the cost for diapers, Williams said.
3. Williams said that getting a credit card where you get points every time you shop could be a great idea to get back some earnings. On the credit card you could also add diapers and formula, so every time you buy these items you get a reward. She added that buying in bulk is a good idea because there will be enough to last a long time.
4. The trick in planning is to properly proportion what you earn. “If you get paid weekly then you can dedicate like 10 per cent of your pay towards the child,” Williams said. In a situation like this, it is best done before the baby is conceived so that there would be enough saved before the baby is born.
5. If you are planning to buy a crib for the baby, Williams advises that buying a second-hand crib is not a bad idea. Just invest in a new mattress.
6. Williams said opening a university account at a financial institution is good for a parent to do as early as possible.
When that child reaches university age they get an additional grant. That is the advantage of a university account for the baby over a traditional savings account.
7. You also have to think about a day care centre or whom you are going to leave the child with. In cases where you cannot afford a day care centre which may cost up to $5,000 per week, you could consider a family member or a friend at a lower cost.
“The barter system is not a bad one,” said Williams. “You could ask a relative or friend to keep your child and you carry their child to school as a trade-off.”
8. You also have to prepare in the event that your child has a disability. “After you get a diagnosis for your child, the first thing that you should do is go to the Early Stimulation Programme in the Ministry of Labour to get help.”
The programme is free and is there to help children with any type of disability.
