For new parents, the prospect of having a baby can be an all-consuming thought and an eternal source of joy. Not only do babies provide a physical proof of their parents love and devotion of each other, they are a source of happiness for the whole family as well.
Prospective parents soon begin to realise what an expensive business raising a baby. From medical bills to baby-proofing the house to buying several baby essentials, new parents are constantly
learning to adjust to this new stream of expenditure. Before the baby arrives, an average Singaporean parents spends at least S$16,000 on antenatal care and hospital delivery expenditure alone.
Of course, all of these expenses are borne with joy and excitement. However, new parents are often caught off guard by the expenses that keep cropping up once they have welcomed their baby into their home. This is especially true in Singapore where medical bills and childcare costs comes at a higher cost, both recurring and one-time.
Singaporean parents must be vigilant in managing their finances if they want to avoid going to the money lender. They can use their Medisave account, which allows for S$900 withdrawal for pre delivery medical expenses to off-set some of their expenses. However, the expenses incurred are in excess of the allowance made by the Medisave Maternity Package and out-of-pocket expenses start taking their toil even before the baby is born.
Here are a few expenditures that new or expecting parents need to prepare themselves.
1. Repeat Buying of Baby Essentials
First-time parents are not prepared for how much they would end up spending on baby paraphernalia. Children are fussy creatures and it is likely that this fussiness will force parents to make
multiple purchases of the same products. For example, your baby may not like the bottle that you bought and you are forced to buy more than one to figure out the one that suits best. Moreover, an average baby goes through more than 2,700 diapers. At an average of S$0.25, this amounts to S$675 dollars per year for diapers alone.
Furthermore, new parents are often inexperienced buyers. This means that they sometimes splurge on times without fully realising the mountain of expenditure lying in their future. To avoid this scenario, new parents are advised to make a list of essential items and buy them before spending any money on luxury items.
2. Medical Expenditure
Most parents are prepared for prenatal care and delivery expenses, what they aren’t prepared for are all the medical expenses after the baby is born. Not only do babies need to be seen by the paediatrician a week after leaving the hospital, this visit is followed by regular check-ups, and vaccination shots.
Furthermore, babies and young children tend to get sick easily as their immune system is still developing. These new costs tend to pile up especially if parents are not prepared. For new parents, it is advisable to have a game plan to tackle medical expenses. Under the First Step Grant, Singaporean parents get an upfront payment of S$3,000 and this money can be put to good
use. Moreover, it is also advisable that new parents seek guidance from other recent parents who can give them tips based on their experience in dealing with these expenses.
3. Day Care
Maternity leave varies between 12 to 16 weeks in Singapore depending on the nationality of your baby. This means that, unless young Singaporean parents have willing grandparents to take care of their new child, day care charges would add to rising list of expenses.
Child care is a big ticket unexpected expenses. This is because new parents do not realise how prohibitive day care can be. In Singapore, day care can range from S$300 to over S$2,000 per month
depending upon location or half- or full-day care and these does not include registration charges. Day care is an unavoidable expense and the best strategy is to start planning for this expense even as soon as during the pregnancy. Parents can look into infant and childcare subsidies provided by the government. Visit a childcare centre or www.childcarelink.gov.sg to learn more the options available.
4. Traveling with the Baby
Travelling with a baby is a stressful business. Not only does it require more energy than new parent have to spend, it also requires that parents travel with everything their baby can possibly
need. Expecting parents often have this vague idea that traveling with a baby consists of buying a baby car seat and they are done.
From going to the movies to travelling by air, babies carry their own ticket prices. Parents need to be prepared for extra expenses like purchasing a ticket on full price for a two year old even when the two year old is unlikely to use the seat for long.
So how do new parents get the most out of their money? Here are a few tips for new parents:
1. Family that eats together stays together
Consider dinning out and takeout to be a thing of the past, or of less frequency. Make a budget and share home-cooked meals to save big on dinning out. Use the leftovers to prepare lunch and increase your savings even more.
2. Save your shopping sprees for sales
Whether they are garage sales or the regular kind, consider limiting shopping for big items to only the time when the sales are on. Moreover, you can earn extra money by holding a garage sale,
clean out the clutter in your house, and make room for the baby all in on go. Consider using an online website to sell your stuff for a minimum of hassle and a wider audience.
3. Take your government to the cleaners
Under the Baby Bonus Scheme, the government matches, up to a limit, the deposits made by the parents in Child Development Account. The account offers a 2 percent annual interest for five years with no minimum amount requirement. Moreover, the savings on this account allows you to take care of your baby’s expenses as well as entitle you to special privileges at over 30 merchants.
4. Always be on the lookout for savings
Always hunt for bargains no matter what shape come in. Collect coupons and special discounted items as babies need everything from bottles to blankets. Buy One, Get One Free offers can be a
lifesaver for new parents and allow you to stock up on essentials. Find the right financial advice from Credit Hub Capital