New to Parenthood: Financial Planning Tips for First-Time Parents

Welcoming your first baby is an exciting milestone — but it also brings a host of new financial responsibilities. From preparing for maternity leave to saving for education, here’s how to get your finances baby-ready.

Maternity Leave

Once your pregnancy is confirmed, speak to your employer about maternity leave. If you contribute to UIF, you could qualify for up to 121 days of paid leave, covering 38% to 58% of your salary. Keep in mind, you can only apply for UIF benefits once you stop receiving your full salary — so plan for any income gaps in your budget.

Processing times can vary, so gather documents like your ID, UI-19 forms from past employers, medical proof, and bank details early to avoid delays.

Creating a Baby Budget

Babies come with expenses both big and small. From setting up a nursery and baby-proofing your home to purchasing essentials like a pram, car seat, nappies, and clothes, the costs add up fast.

Consider opening a dedicated baby savings account to manage these expenses, prioritising immediate needs and saving for future ones, like child-proofing or upgrading your car.

Medical Aid and Gap Cover

While you can only officially add your baby to medical aid after birth, research your options now. Most medical aids require you to register your newborn within 30 days, but it’s best to do it as soon as possible to ensure cover from day one.

If your plan offers a maternity programme, sign up to access benefits like antenatal visits, scans, and certain baby gear. Also, check what’s needed for hospital admission pre-authorisation and whether midwives or doulas are covered.

Reviewing Life Cover

With a child depending on you, it’s essential to review your life cover. If something happens to either parent, would your family be financially secure? Consider how much income would need replacing, how debts would be paid, and how education would be funded.

Instead of naming your child directly as a life policy beneficiary, consider a testamentary trust to manage any inheritance until they’re old enough to do so themselves.

Start Saving for Education

The earlier you start saving for your child’s education, the better. A well-diversified unit trust offers flexibility, while a Tax-Free Savings Account (TFSA)provides valuable tax benefits. Starting from birth gives your investment up to 18 years to grow.

Childcare Costs

If you’ll be returning to work, factor in childcare expenses. Depending on your area, daycare can range from R3 000 to R7 500 a month, while hiring a nanny can cost between R6 000 and R8 000 monthly. Consider training your nanny in baby care and first aid for added peace of mind.

Update Your Will

Once your baby arrives, update your will to name a guardian and consider setting up a testamentary trust to manage your child’s inheritance. Choose trusted individuals as trustees and have open conversations with them about your wishes.

Planning a Strong Financial Start for Your Family

Parenthood shifts your financial priorities, but with smart planning, from budgeting and insurance reviews to long-term savings you can build a secure foundation for your child’s future. Regularly review your financial plan to keep up with your growing family’s needs.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. For personalised advice tailored to your specific financial situation, please contact us or one of our qualified financial advisers at Corona Financial Services.