Welcoming a new baby into the family is hugely exciting. However, it also requires a substantial financial outlay, especially over the first 12 to 18 months. Even with the help of family and friends, parents often need to take short-term loans to cover the initial costs.
The real costs of having a baby in South Africa
If you opt to give birth at a private hospital, you can count on being charged close on R20,000 for a natural birth or R26,000 if you have a caesarian, assuming there aren’t any complications. That excludes gynaecologist, anaesthetist and paediatrician fees.
Once he or she is born, a baby needs certain clothing, equipment and accessories. One-off items like a cot, pram, car-seat, high-chair and baby bath can set you back a good whack. Add in the costs of smaller appliances such as a baby’s monitor and humidifier, and bedding, dummies, bottles and baby clothes, and you’re in for at least R15,000 to R20,000 in initial costs.
Don’t forget monthly expenses either. You’ll have to find R2,500 to R3,000 per month to pay for nappies, wet wipes, toiletries and vaccinations. The cost of a nanny or daycare can easily add another R4,000 to R6,000 to monthly costs.
If you don’t have medical aid or your medical aid doesn’t cover specialist consultations in full, you’ll also be liable for post-natal visits to a GP or paediatrician.
Some ways to reduce baby-related costs
As a first-time parent to be, it’s tricky to separate needs from wants. The truth is that a baby doesn’t require a whole lot, beyond regular changing and feeding, somewhere clean and dry to sleep and plenty of love and care.
Don’t be tricked into believing that all babies need expensive high chairs, bassinets, specialised furniture or even a baby bath (a plastic wash basin does just as well).
Speak to other parents, read up online and use your own common sense – and then focus spending on items that you’ll really need or find valuable. Also let family and friends know what you’d like to receive as gifts.
Also, don’t discount the possibility of second-hand equipment and baby clothes. Babies outgrow items quickly and often attract duplicated gifts, so there’s good potential for second-hand items that have barely or even never been used.
Preparing for baby-related expenses: top tips for financial security
If you’re already in debt and expecting a new addition to your family, the thought of the extra costs involved can be especially intimidating. However, there are steps you can take to reduce debt and build up a needed cash reserve in the months before a baby arrives.
Regardless of any debt you currently face, prioritise putting aside a good lump of cash each month.
You might make some quick, significant cuts to your monthly expenses by, for example, scaling down to a cheaper DSTV package, negotiating a lower cell phone contract or swopping providers, moving to a bank with lower fees, stopping a gym membership or trading in your current vehicle for a cheaper model.
Where possible, continue paying off debts, focusing first on those charging the highest interest rates.
What to consider when applying for a loan
Parents to be or family members helping support them may opt to take loans to fund medical and other baby-related expenses.
Before you apply for a loan, it’s important to consider:
- your eligibility – do you have the kind of credit history required to get a loan from a bank?
- risk – what happens if you can’t pay back the loan? Will you be handed over to collections, black-listed at credit bureaux, get a judgement against you or even risk having your family’s assets seized?
- credit rating – will the loan affect your credit score, making it more difficult to borrow money in the future?
- interest rate – is the rate of interest on the loan affordable, are there hidden fees, and is there an early settlement penalty?
- terms – how long do you have to pay back the money, and can you extend the loan term, if required?
Asset-based loans from lamna
You provide an asset of value. We make a loan offer based on the asset’s value and, if you decide to proceed with the loan offer, we keep the asset in a secure, storage facility. Once you pay back the loan and agreed interest, the asset is returned to you.
Some advantages of the loans we offer:
- our interest rates are competitive and comply with NCR guidelines
- we don’t charge hidden fees or early settlement penalties
- we don’t do credit checks or share your details with credit bureaux or other third parties
- your assets are valued by independent appraisers
- loan applications are processed while you wait
- funds are transferred to your account via EFT, typically on the same day you apply.
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