Good advice for new moms

To say it costs a fortune to raise a child is an understatement. Here are my three suggestions.

The good news is you have a few months to save and prepare.

One of the first things to do is set up a dedicated savings account and call it your baby fund. Set aside a fixed amount each payday for expenses.

Get creative to put extra money in the account, like redirecting cash rewards from a cash-back credit card. You’ll also find that as your lifestyle changes, it’ll provide a few extra rands.

One of the greatest immediate costs will be pre-natal care and delivery. Sweat the details of your medical aid. With the help of your insurance company and doctor, ask for a full estimate of costs to you for prenatal care, tests and delivery.

Importantly, ensure, preferably in writing, that your doctor’s in network with your insurance. This limits the price you’ll be responsible for. Also ensure the doctor’s billing department sends tests to labs within your insurance provider’s network.

At the very least you’ll need an obstetrician, ultrasounds and a maternity ward. Budget for these.

Get life insurance. Most financial experts suggest 8-10 times your annual salary to cover baby’s expenses if you die. You’ll also need to insure against the possibility of an injury that could keep you from working.

Some people receive short- and long-term disability insurance through their employer: determine if that amount would be enough to get you through several months of being out of work if something happened.

A medical exam is required for term life insurance and most whole life insurance policies, so health concerns brought on by your pregnancy, like increased weight or high cholesterol, could affect your rates.

Instead of thinking of it as an unplanned pregnancy, think of it as a gift.

Mduduzi Luthuli is an investment manager at Luthuli Capital