You wait anxiously for the pregnancy test to hand down its verdict.
Two very faint lines start emerging from the display, and in that moment you realise life as you know it is going to change forever.
Jury’s out – You’re pregnant.
The toilet cistern seems to be in on the breaking news as it catches your body weight. Your thoughts immediately turn to money. They shouldn’t, but they do!
How are we going to afford this?
Life is full of surprises, and the biggest surprise of them all is a pregnancy you weren’t expecting.
If your personal finances are already stretched, what should be a joyous time in your life can fast feel like a “major stress”.
Now, while you can’t plan for an unplanned pregnancy, there are 3 financial planning pillars you should have standing upright.
The reason why you need to have your proverbial “house in order” is because when the stork arrives in 9-months from now, you will be expecting a basket with either a pink or blue blanket wrapped around an 18-year commitment & you will be glad you had a solid financial planning foundation to build off of.
Your pregnancy money woes can literally be broken down into:
- Medical costs
- Other costs
- Securing an income during and after your pregnancy
- Make sure you belong to a Medical Scheme
You can’t join a Medical Scheme the day you find out you are pregnant!
Well, you can join when you discover you are pregnant, because a Medical Scheme cannot refuse anyone cover, but they aren’t going to pay for any costs associated with your pregnancy.
Consider for a second how many medical expenses you are likely to rack up during your pregnancy? Gynae visits, scans and blood tests. Couple that with the cost of delivering the baby in a private hospital, and the numbers start adding up into tens of thousands of Rand.
Do you have that type of money lying around?
It’s safe to say that the major costs associated with your pregnancy are going to be directly related to medical expenses.
If you are on a medical aid before falling pregnant, then 70% of your financial stress will be alleviated.
- Make sure you have some money stashed away
How much does it cost to have a baby?
Let’s park the medical expenses for a moment because we’ve assumed that you are on a medical aid. You still need nursery furniture, a pram, nappies, clothes and too many other items to mention in one blog post. If you don’t have any money stashed away for a rainy day, or in this case a “baby day”, then what are your options?
You only have one option – Borrow the money 🙁
Most of us live from one pay cheque to another, which leaves us in a precarious position if something unexpected happens, right? An unplanned pregnancy is a perfect example of the type of curveball life can throw at us. Without an “emergency fund” built up, credit is the only option we have.
If you are already feeling stretched, imagine how anxious you are going to be if you have to take out a personal loan for R30 000.
The rule of thumb is that you should have at least 6 x your take home salary (after tax) saved for a rainy day. That’s easier said than done.
How do you build up an emergency fund?
It all starts with budgeting. We all use the excuse that we don’t have enough money left over every month to start saving, but if you budget correctly and you are ruthless with your spending, you will be surprised at how quickly you can save R10 000. Once you have R10 000 saved, the emphasis is to get to R20 000 and so you move on.
Your unexpected pregnancy money jitters aren’t going to feel that serious if you can pull a bank or investment statement and see that you have money for the endless baby stuff you are going to need.
- What are the rules around maternity leave and the benefits at the company you work at?
Let’s assume you have the medical expenses covered because you are on a medical aid plan. Let’s assume that you have enough money to cover all the other baby costs that are going to come up.
What is the other major issue now?
Securing an income during and after your pregnancy.
How many women, reading this blog post, have any idea what their employment contract stipulates in terms of maternity leave and benefits?
- Are you entitled to 4 months maternity leave?
- Is your company obliged to pay you while you are on maternity leave?
Quick fact: Female employees in South Africa have the right to four months maternity leave. By law your employer is not obliged to give you paid maternity leave.
If you have been contributing to UIF, you are eligible for a maternity benefit of up to a maximum amount of 60% of your remuneration, with the benefits paid for a maximum of 121 days.
Make sure that you pop into the Human Resources department at work today, to find out how things are going to play out the day you find out you are pregnant.
Being blessed with a child is the greatest gift of them all. Very often it’s not something we can plan right down to the last detail.
The best we can hope for is that we have our ducks in a row, and when it comes to absorbing the financial impact, we have considered the major costs and how we will continue to secure an income.
Until next time.
The Wise About Life Team