The costs of having a baby in 2023 – and how to better prepare your finances
Welcoming a baby into the world can be a wonderful and joyous experience. The new arrival can sometimes bring a more profound sense of purpose and, inevitably, a lot of extra bills.
In light of this, the financial education platform JustMoney spoke with industry experts to determine the significant expenses parents could expect when having a baby in 2023.
“Many couples discover that the cost of caring for a baby is much higher than they expected,” said the marketing manager of JustMoney, Shafeeka Anthony.
“Informing yourself about the financial implications before you fall pregnant can help you differentiate between expenses that you can’t avoid and products and services that are well marketed but don’t really need,” she added.
Baby basics
According to MiWayLife customer experience head Madikana Kekana, first-time parents in South Africa spend, on average, around R100,000 a year to raise a child.
She also noted that a nursery can cost R5,000 or more for furniture, a baby-changing station, and related equipment.
Managing director of Dis-Chem, which owns Baby City, Saul Salzman, added that parents should also expect to spend at least R10,000 for the new arrival essentials.
These include a receiving blanket, clothing, nappies and a diaper bag, wipes, bottles, pacifiers, formula or a breast pump, a cot and bedding, a pram and a travel seat.
Salzman said that parents needing to return to work and require the support of a nanny, au pair, or crèche could expect additional bills of R33,500 to R70,000 a year.
School fees
Although parents only have to consider paying school fees several years after the baby’s first steps and spoken words, it is still an important financial aspect of raising a child.
According to Old Mutual, many parents are not prioritising saving for their child’s education.
This is concerning, considering that long-term education costs outstrip salary inflation and outpace the Consumer Price Index (CPI) by 2.5% and 3% annually, said Old Mutual.
To help parents save for their child’s education, Old Mutual calculated the cost of one year of education in 2023 and for the next 15 years.
“If your child starts from Grade 1 in 2023, you can expect to pay on average between R651,313 and R1,901,549, for public or private education, respectively, over their school career,” said Marius Pretorius, head of marketing: retail savings and income solutions at Old Mutual Personal Finance.
| Level and type of education | 2023 | 2030 | 2035 | 2038 |
|---|---|---|---|---|
| Public primary school | R24 500 | R41 900 | R61 500 | R77 500 |
| Public high school | R36 100 | R61 900 | R90 900 | R114 500 |
| Private primary school | R71 500 | R122 600 | R180 100 | R226 800 |
| Private high school | R105 100 | R180 100 | R264 700 | R333 400 |
| University | R55 900 | R95 700 | R140 700 | R177 1200 |
Note: Costs are in rands and based on education inflation of 8% per year. The amounts are rounded to the nearest hundred. The primary school costs are for Grades 1 to 7 and exclude pre-primary. University costs are for one year of an undergraduate degree.
Tips to help you plan for your baby
These statistics can be daunting for any prospective parent, but careful planning can help you can save money.
JustMoney offers the following general advice relating to a new baby:
- Prepare a baby budget – List all of the services and products you will need and start planning how best to source them at a reasonable price. Check where you can cut back on expenses.
- Put together an online registry (wishlist) – Friends and family can contribute any amount they wish towards a gift, and you’ll receive things you actually need.
- Use your support networks – Ask family members for help with babysitting and cooking. Prepare baby food and household meals in bulk and freeze them.
- Buy multi-purpose items – Look for multi-use items, such as a changing table that doubles as a storage unit. Consider buying quality second-hand items such as strollers and gently used baby clothing.
- Buy nappies in bulk – Buying them in large quantities is cheaper than weekly.
- Don’t overspend on clothes – Babies outgrow cute outfits within a few months, and baby shoes are unnecessary. Buy clothes on sale. For example, at the end of winter, buy half-price clothing for the following winter in the appropriate larger size. Many outlets offer affordable, quality, second-hand baby and toddler clothing.
- Get life cover – This insurance is of great value as it provides financial support for your family and could cover your outstanding debts if you die.
“Don’t get hooked by clever marketing and believe every appliance or educational toy is necessary for your baby’s development.
“Focus on the fundamentals, such as good nutrition and space and time to play,” said Anthony.
“When you invest in insurance and other financial products, do your homework first, shop around, read the fine print, and only deal with established, reputable brands,” she added.
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