Preceding the arrival of a newborn, there is a powerful wave of change and excitement in the air. A baby isn’t called a “little bundle of joy” for nothing, and naturally, parents and family members would be fussing around to ensure that conditions are at the optimum for the smoothest delivery of this little V.I.P. This might include shopping for infant clothing, baby cots, going for routine visits at the gynecologist’s or arguing over whether “Linda” or “Leenda” fits better as a name. Just as the joy and excitement of having a baby do not start nor stop at delivery, it is never too early to embark on important financial planning for a family and their child from birth and beyond. 

Government Perks

It is fortunate that from this jubilee year on, the government is offering more treats for parents and their newborns. Under the Baby Bonus Scheme, cash gifts will be increased and be given to every child, instead of just the first four children. Bigger numbers in grants will also be seen in the Medisave accounts that are automatically setup for newborns, ensuring that their MediShield Life premiums are covered until they turn 21 and that other healthcare expenses, such as common vaccinations, will be paid for. If you are a father, you may get one extra week of paternity leave paid by the government, should your employers opt in. This way, you may worry less about winning bread for that little freshly baked bun out of the oven, and dedicate time and care for the family. These enhancements will all take effect from 1st January 2015 onwards, such that all SG50 babies can enjoy them.¹ Good time to be an #SG50 baby!

Pre-Natal Financial Protection

In all seriousness, apart from government goodies bagged to anticipate the arrival of a newborn, parents should also pay attention to pre-natal insurance and how it can protect both mother and child, right from the very beginning. In 2010, it was reported that 9,000 babies were hospitalized for congenital and neonatal conditions, while some 700 bills came up to more than $5,000.² Certain insurance plans are crafted to shield families for such unforeseen, yet real complications. Mothers are covered for events such as stillbirth, eclampsia and hospitalisation related to pregnancy complications, amongst other conditions. As for newborns, they are covered for congenital illnesses, premature birth requiring ICU care, Hand, Foot and Mouth Disease-related hospitalisation and ICU/HDU admission. Insurance plans to cover conception through IVF are now also available. Moreover, the policy cover can be transferred from mother to child so that he or she can receive whole life coverage, as well as savings for future education.³

Education Planning

Speaking of which, it is never too early to plan for a child’s education. University is notorious for its cost, yet it remains as a critical consideration in the welfare of a child’s future. Take a look at the statistics, and you will see that 80% of Singaporean households set aside 14% of their monthly household income for their children’s education fund.⁴ This would not seem at all unrealistic if you consider that a typical 4-year degree in Singapore costs about S$116,200, while one overseas may cost 2-3 times as much.⁵  All this is also keeping in mind that plans and savings need to be put in place for pre-university education such as pre-school, primary school, secondary school and polytechnic. Have we also mentioned tuition classes, which parents could potentially spend thousands of dollars on?⁶ Do not forget that to properly execute any financial plan, we also need to account for inflation.

With so much being said, it seems that the demands of finances with expecting a new member in the family can be daunting and planning for it may be an arduous one, which is all the more reason to start as early as possible. Professional advice and services are readily available today to kick start your plans but the biggest enemy to securing your family’s future is procrastination. At the end of the day, all efforts would be well worth it, as nothing beats the boundless bliss and satisfaction of seeing your child protected, safe, and leading a happy and healthy life.

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<sup>Sources:
¹ “More support for new parents to boost S’pore’s fertility efforts”, TodayOnline, 23 August 2015. 
² “Caring for babies with birth defects”, The Straits Times, 15 October 2012
³ AIA Family First Baby insurance plan, AIA, 2014
⁴ Consumer Purchasing Priorities survey, Mastercard, 2013
⁵ The Straits Times, 30 March 2013 & 19 May 2013
⁶ “Parent pays nearly $6,000 a month in tuition fees”, AsiaOne, 6 March 2012

This post was first published on Centsibility SG blog and has been reposted on Executive Lifestyle with the permission of the author.</sup>

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