With the arrival of a new family member most parents (especially those expecting their first child) become worried about their finances. There’s a long list of purchases to be made in the upcoming months, not to mention the additional regular monthly expenses. This sort of financial pressure opens one up to the temptation of entering into credit agreements.
Yet, South Africa is in a notoriously bad position as regards personal finances strain, with 72% of South African households (both those with and those without children) finding themselves in a bad debt cycle, according to the latest Momentum/Unisa SA Household Financial Wellness Index.
Here are some tips to help you manage your finances, allowing you to enjoy your baby’s first years without falling into debt.
Draw up a budget
Only 8% of South African households have drawn up a budget or plan to do so, according to the Household Financial Wellness Index mentioned above.
Ensuring that your spending is under control is your best tool to avoid debt. Start planning before your baby arrives to make sure you’re in this habit. Drawing up a budget is as simple as writing down all your monthly expenses in a book, or even signing up for an app that monitors your spending, like 22seven. When you have identified what you are spending your money on, it’s easy to work out where you could cut back.
Plan your celebrations
With your tiny “cuddle bunny”, come many occasions to celebrate. Organising and planning what you receive at these events will help massively in the long run. Ask that guests check out your gift registry, and include items on it that are suitable for bulk purchases, like nappies. Stocking up on diapers also means you need to consider how quickly your new child will grow. Ask for various sizes (in the case of nappies). Stockpiling on items like these is planning for savings in the future.
Go 2nd hand where you can
In the first month your baby will grow on average between 2.5cm to 3.8cm. Buying brand new clothes is a financial waste when you consider that these items can cost a pretty penny. Rather purchase 2nd hand, as the items will cost a fraction of clothes straight off the hanger. Shortcuts like this guarantee a curb on your spending and help save for your future.
When you just need it now, rather rent it
There are some items that you wouldn’t expect as a gift, or may not want to purchase 2nd hand – strollers, baby car seats and cots. These baby products can quickly add up to thousands of Rands. But instead of reaching for the credit card, why not consider renting-to-own them?
Companies like Teljoy offer rent-to-own contracts which are great as they don’t lock you into debt. Monthly repayments are fixed for the duration of the contract, delivery, repairs and maintenance won’t cost you extra since they are included in the agreement, and you have the option of owning the product after the agreement is concluded. Who knows, when the pram becomes yours, you may be expecting another child!
So, if that new bundle of joy is soon to arrive, start planning your budget and use these tips to ensure that it’s smiles and giggles all the way – for all of you!