Cape Town - So you're about to have a baby.
Amid the joy can be some anxiety about how to pay for it all.
And with good reason. It has been estimated that the average middle-income household in South Africa spends about R7 500 per month on raising a child.
The National Credit Regulator reported total consumer credit in South Africa at R1.61-trillion as at March 2015.
With so many offers out there, a credit agreement can be very tempting for first-time parents who are under an enormous amount of financial pressure. But these contracts put you in debt which is then hard to escape.
Here are some tips for new parents to avoid this cycle.
Review your expenses now
Having a child will definitely increase expenses. Making a concerted effort now to cut down on expenses could significantly assist you to manage the extra demands when baby arrives. Looking through your insurance policies is a good first step as we often forget to review them and land up paying more than is necessary. Limiting spending on luxuries can also make a difference. Shop for groceries once a week to avoid impulse purchases.
Draw up a simple budget
Monitoring your expenditure will help gauge the extent to which budget cutting is required. A simple note pad with a list of items you've purchased will be fine to record purchases, or get a spreadsheet going. The key is to be aware of where your money goes.
There are services you can use to review your spending habits as well, but the name of the game is to save.
Be selective with purchases
As a new parent you need to be aware of how quickly your child will outgrow certain items - rather buy second-hand.
Make a list for gifts you need
Signing up to a gift registry or supplying friends with a list of items you need will help in the long run. If they're going to give you clothing ask for a wide range of sizes for different ages, 6-12 months or even 2 - 3 years, rather than only new-born items.
Babies outgrow most clothing in a few weeks or months, so it will help a lot if you have clothes for each step along the way.
Article submitted to IOL