With so many things on your to-do list during pregnancy, how important is it to start planning for your child's future now?
Pregnancy is a time for preparation. Getting the nursery ready, your hospital bags packed, working out your maternity leave – the list is a long one. So thinking about putting your child’s name down at a school, writing a will or opening a financial policy for them may be the last thing on your mind.
However, according to experts, some of these things should be done during pregnancy, while others don’t need to remain at the top of your to-do list.
Considering the stress that the modern-day person is under (especially when pregnant), adding to the pile when you don’t need to will just make your stress levels rise. And that is the last thing you want during pregnancy. So we have broken it down for you: things you should look at doing now and how to go about doing them, and things that you don’t need to bother with just yet.
If you were not on a medical aid scheme when you fell pregnant, or perhaps you were still within a mandatory waiting period, this means that your pregnancy will not be covered if you join a medical aid now.
The reason that South African medical aids do not cover women if they join after they fall pregnant is that in the past when they have done so, women have joined upon finding out they are pregnant, used up all their savings, and would then leave the scheme once the baby was born. The medical aid would then lose money.
But it is still a good idea to join, as your benefits will only exclude pregnancy-related matters, but you will be covered for everything else.
Also, as soon as your baby is born, they will be immediately covered according to the specific plan you are on, without any waiting periods applying. If you are planning on having your baby in a private hospital without medical aid, remember that if your newborn has to go into the neonatal intensive care unit (NICU) for any reason, the medical costs can be extremely high.
If you have joined a medical aid during pregnancy, these costs will be covered.
Shop around for the best medical aid and a plan that suits you and your family. You may feel that a cheaper hospital plan is perfect for you, or perhaps a plan with medical savings (allowing you to go to the GP or paediatrician) will be best.
There are many options out there, so speak to your friends and family to get referrals.
Read: Baby-making breaks the budget
There seems to be a mad rush by parents to get their children into good schools by putting their names on waiting lists. We all want our children to have the best education possible, and having an idea of which schools and high schools you would like them to attend is fine, but you can breathe easy.
The schools that have waiting lists (mostly the private kind) do not accept applicants until the child is actually born. Most schools request the child’s birth certificate for them to be entered onto the waiting list, which of course, you do not have yet.
Once your child is born, and you want to put them into a private school (whether it be pre-school, primary or high school) it is suggested that you investigate the various schools and put your child’s name down. While this may sound ridiculous, the waiting lists can be extensive.
When it comes to government schools, a parent may technically register their child at any public school, if there are vacancies. If you live or work in the area then you have a better chance of getting into the school, but these usually happen only just before your child is ready to go to that school.
You may not need to put your child’s name down for various schools just yet, but this doesn’t mean you can forget about education altogether. The cost of school fees are rising, and to be able to afford fees when the time comes, might mean you have to start saving now.
The costs of public schools are expected to rise by nine percent each year. So in ten years, a public sector school can cost up to R50 000 per annum. Considering the fact that private schools can cost double (if not triple) the amount public schools do, we don’t blame you if you put your calculator down to have a little cry.
Before you start researching home schooling, there is something you can do now that will ensure your child’s best education. There are a variety of financial education plans out there.
Again, it is important to look around before deciding. Most of these plans have a minimum amount that you can pay into it every month. Some let the money be readily available to you if you need it for something else, while others are fixed, and they pay out at a certain time.
Wealth coach Susan Mercer Williams suggests on her website (www.wealthcoaching.co.za) that the simplest and most effective way to save for your children’s education is to use a unit trust. It provides an easy solution to meet the needs of providing for your child’s education.
There is no contract and therefore you can terminate the education savings plan/unit trusts at any time with no costs or penalties to you. You can increase, decrease, stop, start and withdraw your savings.
Most importantly, you can choose a plan that suits your budget. Whether you can put aside R3000 or R500 a month, every bit will count towards your child’s future schooling. Call your bank and ask them what plans they have to offer you, and use these a comparison to any others you may find.
Getting your affairs in order
While this may be a depressing subject, making sure that your child is well looked after should anything happen to you or your partner is important.
Read: Your will and testament
The first step would be to write up a will. Even if you have no viable assets to leave your children, a will stipulates where the money from any funds will go as well as who will look after your child. Financial adviser David Weir says: “Choosing your child’s guardians and sorting out your money in case of a death is no easy matter. I advise clients to choose people that they not only trust to do best by their child, but people that can look after a child both emotionally and financially.”
David explains that life insurance goes hand-in-hand with a will and suggests that if possible, parents should insure themselves for six to eight times their gross annual salary (depending what you can afford in payments each month).
This money can be used to look after your child should anything happen to you or your partner. Always call your bank or life insurance companies for quotes that will suit your lifestyle. A lawyer can draw up a will, or you can buy a pre-written will from stationary shops such as CNA and complete it yourselves.
If you have any tips on how to save for your child's future, send it to firstname.lastname@example.org