Planning a family? Congratulations! Having a baby is one of life’s meaningful decisions. It’s also one of the most expensive, from hospital bills to baby gear to extra nappies, your finances can feel the pressure quickly. If you or your partner is planning on taking maternity leave, it’s important to prepare your household budget for the time when there will be a drop in your household income. 

In South Africa, most women rely on UIF (Unemployment Insurance Fund) benefits during their maternity leave. If you haven’t explored what this is yet, essentially, UIF pays out a portion of your regular income. This is only the case if you qualify to receive UIF, and if you do, you should note that the application and payout process can be slow.  

Here’s how to get financially ready so you can focus on your new arrival without unnecessary stress. 

Step 1: Your Rights And Benefits 

Under South African law, you’re entitled to four months of unpaid maternity leave. Make sure you know what this means so that you don’t feel blindsided. You see, your employer may request that you return to work before the four months are up – which they can ask, but you don’t have to agree to. Your job, under the law, is safe even if you don’t comply with these kinds of requests.  

Additionally, just because the law stipulates that this leave is unpaid, doesn’t mean that this is always the case. Whether you’re paid during this time depends on your employment contract and company policy. If your employer does not offer full maternity benefits, you will likely need to apply for UIF maternity benefits.  

These benefits pay between 38% – 58% of your salary (depending on how much you earn). Just make sure that your UIF contributions are up to date and start the application as soon as your leave begins – it can take several weeks to get your first payment. 

Step 2: Calculate Your Monthly Shortfall 

Having completed step 1, you will have a better idea of how much income will be coming in during maternity leave. Knowing this figure allows you to take the next step – calculating the shortfall between that and your regular monthly expenses. This gives you a clear target to save towards in the months leading up to your due date.  

Don’t forget to account for once-off costs like baby items and hospital co-payments. 

Step 3: Start A ‘Maternity Buffer’ Savings Fund 

A lot of people have an “all or nothing approach to life”, but in reality, even a few hundred rand saved per month can make a big difference. What we would say is that you should aim to build a dedicated emergency or maternity fund that you only use to pay for medical bills not covered by your medical aid, a few extra months of nappies and formula, and even household expenses if your income is delayed. 

The biggest tip when tackling this step is to automate the savings transfer each month so that you can stay consistent. 

Step 4: Cut Non-Essentials Now 

Before the baby arrives, take the time to cancel or pause non-essential expenses, like those unused subscriptions, takeaways, entertainment, etc. Instead of just cutting these expenses, redirect those funds toward your maternity buffer.  

Step 5: Plan Ahead For The End 

Unfortunately, childcare costs are known to be on the steep side in South Africa. That’s why it’s better to start researching your options early. Will you be using daycare, a nanny, or a family member? Factor these costs into your future monthly budget. You may also want to stagger your return to work with saved leave days or explore remote work or flexi-time options with your employer. 

Feeling Informed? 

We trust that this information will help you stay one step ahead. 

If you’re looking for more practical advice, budget-friendly ideas, and planning tools then please take a few minutes to explore AA Inform.