Having children isn’t just an emotional bond, you’re committed financially too. From healthcare to education, it is your responsibility to provide for them until they are old enough to financially care for themselves. With that said, let’s take a look at how much a child might cost you in Singapore.
In summary, SmartParents has given a quick breakdown on how much you might need at the different ages of raising a child in Singapore:
Pregnancy: At least $8,000
Age 0 to 2: At least $60,000
Age 3 to 6: At least $40,000
Age 7 to 12: At least $70,000
Age 13 to 16: At least $70,000
Age 17 to 19: At least $16,000 (JC) or $35,000 (poly)
Age 19 to 22: At least $40,940 (private) or $118,000 (local university) or $232,000 (overseas university)
That’s a whooping total of $670,000!
3 Rules To Manage Cost of Raising Children
We don’t claim to be experts at parenting, but we do have some tips to share on how you can manage the cost of raising children – here they are!
Start Saving – Today
While this rule might apply to many financial goals, it’s even more so important when you’re planning to start a family. If you and your partner have decided to bring in an addition to the family, it’s good to cut back on lavish expenses, spend less than you earn and even consider opening up a new joint account just for the kids’ expenses.
Children will cost more as they grow older, so you might want to look into medium-term investments that you can cash out as your child grows older and your expenses increase.
Getting Insured From The Start
One of the biggest financial setbacks you could face are healthcare bills. As it is, a normal delivery already will cost at least $8,000. However, complications might arise and that would significantly increase the cost. Of course your health is the greatest priority, but you wouldn’t want to jolted back to reality when the hospital bills come. Government subsidies will help cover parts of the cost but worse cases might see you footing the bills with your own pocket money.
Consider getting prenatal insurance which could help mitigate some of the financial risks of a complicated pregnancy or delivery. Some policies offer a one-time payout in the event of pregnancy complications while some also cover the baby for congenital diseases.
Don’t Compromise Your Retirement
Many new parents make the common mistake of compromising their retirement plans as their children grow up. Whether it’s for their tertiary education or paying for the wedding, you should prioritise your retirement. After all, the last thing you want to do as a parent is seek financial support from your children who may just be stepping into the real world with big ticket purchases of their own.
If you’re worried about your children’s education, consider an endowment plan that works as both a savings and insurance plan. In this case, you may put some money towards their education or future needs and get yourself covered at the same time.
Alternatively, you might seek the help of a financial advisor (try our SmartSearch tool!) to help build a financial plan that meets all your goals.
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