07 May Mother’s Day: Financial planning tips for new working moms
Are you celebrating being a mom, for the first time, on Mother’s Day this Sunday (10 May)? Congratulations! Parenthood is the most elating and joyful experience and a great blessing, despite the many challenges of lockdown at present.
As a new mother you have plenty to adjust to, but while you are on maternity leave, it makes sense to review your personal finances. Taking the time to ensure that you and your newborn are adequately provided for, will give you some peace of mind while you are adapting to sleepless nights and many new responsibilities.
Firstly, check that you and your partner are already receiving all the benefits to which you are entitled. Some companies offer lengthy paid maternity leave, flexible working hours and other perks in order to recruit and keep outstanding staff.
If your circumstances are different, then according to South African labour law, mothers are entitled to four months of unpaid maternity leave. If you have been a UIF contributor, you are eligible to claim for a maternity benefit of up to 58% of your remuneration, depending on how much you have been earning. Also, the parental leave period increased this year from three days to ten days, so your partner may be able to spend more time with the baby. Given the current lockdown conditions, check online at https://www.ufiling.co.za/uif/maternity-benefits regarding the UIF documents and forms you need to submit.
Sarah Nicholson, Commercial Manager of personal finance website Justmoney, and herself the mother of two boys, suggests a handy checklist that you should run through after welcoming your little bundle of joy into your home.
Draw up or amend your will: This may not be a pleasant topic, but it is one of the most important things that each parent needs to attend to. You will need to specify who will inherit your estate and how you would like your assets to be allocated. You also need to choose an executor, who will make sure that your wishes are carried out.
Choosing a guardian for your child is another major consideration, as you will naturally want someone who will be able to raise your child in a way that you would approve of. This means taking into account their values, parenting style, and whether they have sufficient money and physical stamina to do so.
Update insurance: Again, this may be an uncomfortable subject, but it is even worse to think about not being able to care for your child and leaving your partner with the financial burden of doing so on their own. Both parents need insurance, because even if one is a stay-at-home parent, paying for someone else to take care of childcare, housekeeping, and administration certainly adds up. There are various types of life products available, from some that pay out a lump sum if a parent dies, to an income protection plan that covers you if you are disabled and unable to work.
To get a life cover quote, https://www.justmoney.co.za/insurance/life-cover/
To get a disability cover quote: https://www.justmoney.co.za/insurance/disability-cover/
Save for education: Given that you will be putting away money for the long term, consider various savings and investment options. You will want a package that beats inflation; does not incur high costs; takes your tax situation into account; and probably allows access to the funds should you need them.
For a comprehensive Justmoney article on what a tertiary education costs, and various saving and investment options, read here.
Maximise medical aid: Check your policy, taking time to understand the rules and benefits, which may have changed since you first signed up. There could be a baby programme, post-birth benefits, and product discounts.
Gear up for less: While nothing is cuter than designer babywear, resist the temptation to indulge in garments that your little angel will soon outgrow. Gently used babywear, toys, prams, and car seats can be sourced online or through social media groups.
“There is so much pressure to be a ‘good’ parent,” says Nicholson. “You have probably been inundated with offers for everything from a state-of-the-art baby monitor with room temperature tracking, to an educational toy guaranteed to stimulate your child’s brain development. Aim to buy the basics initially, and then purchase only what you need, as you need it. “With lockdown, many people have realised how much they have saved without eating out and ordering in. Try to keep up these new habits. Saving even a small amount every month will add up to a tidy sum.”
You can also check out the ‘Deals’ tab on Justmoney here. Listings currently include a baby shop offering up to 75% discounts while stocks last; earning back up to 30% of your spend in cash when you shop for health and beauty products at a pharmaceutical chain; and a free subscription to an online platform where children can learn anything from drawing to cooking.
Established 10 years ago, Justmoney provides busy and digitally-savvy South Africans with easy online access to financial information, money management tools, products and services. It partners with trusted financial brands and allows one to make informed decisions easily, safely and conveniently.