How new parents spend money differently

Having a child is exciting and expensive. Let’s explore how new parents’ spending priorities are likely to shift.

Life before children

As a couple without children, you might be fairly easy-going with your money. After all, as long as you are diligent about settling your monthly bond or rent, along with petrol, food, and other necessities, you can spoil yourself a little without worrying too much about the financial fallout.

We’re also not averse to being a little financially frivolous. Andrea Desfarges, a PR and marketing specialist with a background in finance, explains that many of us feel justified in making purchases we know don’t make sense, such as an expensive accessory. “These little treats can be a soothing way of compensating ourselves for the challenges we endure as adults.”

The shift in priorities

This changes significantly when you have a child, however. According to Desfarges, spending shifts from entertainment to education, food, housing, and often health-related expenses. In fact, 2023 research by MiWayLife revealed that parents should expect to budget around R100 000 per year per child, giving them far less room for luxury splurges.

Education

Education is one of the biggest concerns for parents. Given the uncertainty around the ability of traditional schooling models to equip our children for a rapidly changing world, it’s not surprising that parents invest a lot in education. Private education can, however, be out of reach for many due to the disparity between the Education Price Index and the Consumer Price Index.

And it’s not just tuition fees, says Desfarges. Extracurricular activities, uniforms, and stationery also demand a large chunk of our budget. “Moreover, it’s important to save for whatever follows high school. In our modern world, this needn’t necessarily be university education; it might be saving capital that can be invested in a start-up.”

Food

Food is another item that’s getting more attention. While you might have had a high food bill before becoming a parent, a big portion may have been on restaurant meals or takeaways. Once your baby starts eating solids, you have another mouth to feed. Often, parents are willing to spend a little more to purchase organic fruit and veggies or free-range meat.

“As children grow older, parents’ lives become busier trying to juggle deadlines with their kids’ activities. Convenience overtakes quality – but it still comes with a price tag. Many parents don’t mind paying a little more for frozen or pre-made meals if it saves them precious hours that could rather be invested in family time,” says Desfarges.

Housing

Housing also becomes a significant expense as you look for a safe and secure environment to raise your child. This might mean moving to a bigger house, a better neighbourhood, or closer to a school, which comes with higher costs.

Health-related expenses

Adding your little one as a dependant on your medical aid or upgrading to a plan offering more comprehensive cover becomes a priority, since your motivation becomes your child’s safety and security.

Adjusting personal spending

Many parents take great care to budget properly for food and plan their meals for the week to cut down on food waste, says Desfarges.

“Although children grow out of their clothes quickly and require a new wardrobe every few months, parents are less likely to update their own cupboards. We get used to spending less on ourselves, instead using that money for essentials our children will need. However, if we spot an item that is likely to last several seasons, saving us money in the long term, we’re happy to pay the higher price that usually accompanies such quality,” she says.

“The change in spending habits brings with it a change in mindset that, hopefully, we will pass down to our children. If they see us thinking carefully about where and how we spend our money, they’ll do the same,” Desfarges concludes.