By: Citadel Advisory Partner Anelisa MtiAs newly expectant parents, the months preceding the arrival of a child are both incredibly exciting and busy. And between preparing your child’s room and stocking up on toys, clothes and nappies, it can be difficult to turn your mind back to the question of ensuring that you are financially prepared for the new addition to your family.However, Citadel Advisory Partner Anelisa Mti notes that if you want to avoid being caught out by any hidden surprises or expenses down the road, the sooner you adjust your budget and update your financial plan, the better.“Many new parents underestimate the hidden costs of having children, and without making room in your budget as early as possible, you could risk falling into debt or unintentionally impacting your financial future,” she cautions.“The good news, however, is that by implementing the right steps and saving as early as possible, you and your family will be able to enjoy a far brighter and more secure financial future.”With this in mind, she offers a brief checklist with five basic points for you to consider as part of your financial planning:

1. New living expenses

Perhaps the most obvious point on the checklist, new parents will be aware of the many hidden lifestyle costs of a child, ranging from once-off purchases such as baby furniture, prams and car-seats, to ongoing expenses such as food, clothing and sanitary items.Begin the process of re-balancing your budget by re-examining your current living expenses and looking for areas to cut back, whether these be your own new clothing purchases, nights out at restaurants, holidays or even possibly your grocery bill.

2. Medical expenses

It is important to examine your medical aid policy carefully to check what is covered both before and after the birth of your child.“Many of my colleagues have highlighted, for example, the unexpected expense of new types of prenatal scans and extra gynaecologist visits for high-risk pregnancies, which may not be covered by your medical aid,” says Mti.It is also important to remember that you will need to add your child to your medical aid plan once they are born. You could further consider purchasing gap cover to protect against any additional medical expenses.

3. Education

One of the biggest expenses attached to having a child is the cost of education, especially as the average cost of education has risen comfortably above inflation for several years.Then there are additional unforeseen costs often attached to schooling such as extra-mural activities and tutors, books, uniforms and school trips – especially if your child is a gifted one, for example in sports or music.It is therefore wise to implement a savings strategy for educational expenses as early as possible, and to consider starting an investment plan, tax-free savings plan or taking out an educational policy.

4. Insurance

Given the many expenses already mentioned, it is vital that you review your long-term insurance policies to ensure that your family is adequately protected against the loss of a parent through critical illness, disability or even death. While this may seem daunting, you will be able to enjoy far greater peace of mind if you ensure that you have provided financially for your child’s future no matter what lies ahead.You may wish, for instance, to adjust your life policy to cover your child’s future living and educational expenses, as well as potentially provide for a caregiver too.

5. Savings

It’s natural to want to give your child the best of everything in life, and with the numerous other demands on your budget, it is easy to make the mistake of neglecting your own savings needs, especially your retirement savings.However, it’s vital that you continue to save towards your own goals – the power of compounding means that there is no substitute for time in the market, and it will not be easy to make up for lost time later.If you are daunted or confused by any of these steps, consult a trusted financial advisor for professional assistance in successfully navigating the process.A financial advisor will be able to help you understand how a child may impact your financial planning, guide you in ensuring your family’s financial protection, and advise you on implementing a successful investment strategy to ensure your family’s financial stability.