Savings and finances: An important part of your parenting checklist

Baby Yum Yum - Savings and finances An important part of your parenting checklist
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The books, the stories and the antenatal classes never quite prepare us for what parenthood entails.

We can learn how to bath an infant or swaddle a baby, but no one really tells us what to do if you get soap in your baby’s eye, or if your baby absolutely cannot stand water, or if your infant hates being swaddled – but you still need a solution.

They can prepare us for so much – the rest we learn, seek help for, or just wing.

One area that I believe doesn’t get addressed sufficiently – or at all, really – is what to do financially when a kid is added to your mix. The most information I’ve really gotten is look out for nappy specials at your supermarket to help you save.

Why did no one tell me to relook my insurance or consider that a good school will cost all the money each month? And that you won’t really be able to have nice things until your child is out of a school uniform? Why didn’t they advise me on drawing up another will as soon as my daughter was born, something I’ve only just done 22 months late?

I’m not going to play financial advisor here because, well, have you seen how much I spend on sneakers instead of saving? I did, however, ask two better-equipped and financially savvy guys, Kosie Jansen van Rensburg and Jowyk Muller from Hero Life.

“If you can spare any additional money early in your child’s life, it will only make your life so much easier later on.”

Kosie and Jowyk say that the four most important financial basics that every parent can start ticking off now are:

  • Defining your financial goals and what you want for your kids
  • Starting to save for your goals as soon as you can
  • Getting life insurance to protect your goals and family
  • Getting your wills sorted out as soon as possible (you can do this through your bank)

They say that a parent’s goal should be to get their kids financially independent one day and that a good starting point is a great education.

School costs vary significantly, as does a family’s income. The trick, they say, is to determine early on what type of education you want your kids to have so that you know what your financial commitments are, and then start to save accordingly to achieve these objectives.

According to their research, parents will fork out around R1.2m in today’s terms to get a child to financial independence with a three-year university degree if they go to a government school.

For a child going to a private school, the figure is a little more than double, estimated at about R2.5m in today’s money terms.

Most people pay for most of that from their future income and don’t necessarily save all the money upfront.

It’s therefore, a good idea for most parents to start saving at least for a university fund and, if you can spare any additional money early in your child’s life, it will only make your life so much easier later on.

Kosie and Jowyk say that if you start saving about R1 500 per month immediately in a good balanced fund, and increase that amount every year by about 8%, you should have enough money for that three-year degree by the time your child goes to university.

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