Plan To Prosper

Proper financial planning is the key to financial security when your family starts to grow.

- Riëtte Grobler

IT IS ENRICHING to have children, but don’t be fooled – it’s expensive as well.

Planning ahead and having a sound financial plan can save you a lot of unnecessary expense and stress in the future, says Jonathan Brummer from SmugMoney, a financial planning service.

“Having a baby is a big step and prospective parents should ideally sort out their money affairs before the pregnancy,” says Jonathan.

TAKE 5

A new baby means new expenses; some immediate and some as the child grows older, say Charné van der Walt from Lemons into Lemonade financial planners.

Charné says prospective parents should pay attention to these five aspects of financial planning:

1. Monthly budget changes. With a child in the house the family’s monthly budget will change. If you plan to have a baby far in advance, you have some extra time to save in order to cover some of these expenses, but certainly reconsider your budget as soon as you can if the pregnancy has been a surprise. Take everything into account that will have an effect on your income. New expenses include paying more for your medical aid as you will have an extra member.

2. Build an emergency fund. This can be an amount equal to three months of income (after tax and deductions). Otherwise set a goal that your emergency fund should cover at least six months’ worth of minimum costs.