Complete Guide For Singaporeans Preparing For Their First Child
Becoming a parent for the first time is one of the greatest joys in life that money cannot buy. The birth of your child is also the beginning of a multi-decade endeavour that requires you (and your spouse) to bring everything you have to bear – all your patience, wisdom, courage, and financial resources.
In order for you and your bundle of joy to have a great start, it is essential that you prepare your personal finances as best you can before the arrival of your child.
Doing so will also help you mentally adjust to the fact that you will now have a dependent whom you need to always consider when making both large and small decisions.
Here is a compilation of the best DollarsAndSense articles written over the years that will help you in this journey.
Big Picture Budgeting
As a first-time parent, there are many things that you may not realise you need to spend on. Here are articles that help you plan ahead so you can set aside the right amount when the time comes.
Pregnancy and Delivery Costs
According to the Ministry of Health, the average bill size for a normal delivery at a Class A ward in KK Hospital costs about $5,099. If you opt for a private hospital delivery, you should expect to pay much more. To help reduce the cash you need to fork out, you can tap on your Medisave monies. Alternatively, you can opt for lower class wards, which would lower your bill.
Costs Of Raising Your Newborn Baby
With the joyous arrival of your baby comes new areas of expenses each month. You should anticipate these additional costs into your monthly expenditure, and also ensure the amount in your emergency savings is adjusted accordingly.
Unexpected medical complications could occur during pregnancy and after delivery, requiring mother and/or child to undergo additional medical procedures or check-ups. Without insurance, you might find the funds you carefully set aside insufficient.
Unexpected complications can occur during pregnancy. Some of these complications may lead to extra healthcare costs incurred during pregnancy.
Insurance For Your Child
These should include medical protection, in the event your child falls ill and require hospitalisation and possibly critical illness protection, to provide coverage for various types of critical illnesses.
Adjusting Your Own Life Insurance
For the next two decades or so, your child is going to be financially dependent on you. This means it’s timely for you to review your current insurance coverage to ensure that you have sufficient life insurance payout to cover your child’s future expenses in the event that you are no longer around.
The only people who are happier than you and your family about the arrival of your child is the government. Thanks to your contributions towards nation-building, you should fully maximise your baby bonus gift and child development account benefits.
Bread And Butter (And Diapers)
Caring for a baby can be expensive. Formula milk, diapers, baby care products, clothes and toys are all going to be things you need to buy regularly.
You may need to prioritise how you spend and allocate your money each month and give up some personal luxuries such annual holidays, periodic staycations and perhaps cut back on entertainment and shopping expenses. Besides, your baby will probably take up much of your free time.
Unless either you or your spouse is not working, you would need to make arrangements for infant care support once the maternity leave period is over. A few common options include sending your baby to infant care, engaging a full-time nanny, hiring a domestic helper or getting your parents to help. Regardless of your decision, all of the options will cost you additional money.
If you get your parents to help, you could give them them an allowance of a few hundred dollars each month as appreciation for their assistance. If you opt for a full-time nanny, or a domestic helper, this can easily amount to $1,000 to $2,000 each month.
For the Future
It’s easy to put off planning for expenses that are only going to be required years down the road. However, given the escalating costs of tertiary education in Singapore, this is no longer an expense that you can expect to comfortably afford without prior planning.
The best way to ensure that you can afford the future education needs of your child is to start investing early and regularly. Long-term savings plan can help your savings grow through a combination of both guaranteed and non-guaranteed returns.
Review Your Will
While Singapore has an Intestate Succession Act, you should consider adjusting your will once you have a child to ensure that they will be taken care of in the event you and/or your spouse pass on. This means you may have to review the beneficiaries on any insurance policies you own. You may also have to adjust any CPF nominations you previously made if you want to include your child.
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