Parenthood is a rewarding yet expensive journey. Join us as we explore what it takes.
The road of parenthood is paved with laughter, lots of love, hard work and challenges. In many ways, choosing to raise a child is one of the most momentous decisions you have to make in your lifetime.
The Total Fertility Rate (TFR) in Singapore, however, was 1.14 in 2019, according to SingStat, among the lowest worldwide. Could financial concerns be putting newlyweds off parenthood? We examine some of the costs involved to help you plan, manage and build your finances for your parenting experience ahead.
Let’s start with the pregnancy phase. Regular prenatal check-ups are important to ensure both mother and foetus are healthy. It also enables gynaecologists to detect possible complications as you chart the growth of your little one. According to financial literacy guide Money Kinetics, on average, a trip to the gynae will cost you from S$150 to S$350 per visit, depending on the trimester.
Expecting mums and dads are likely to attend prenatal classes too. To give you an idea, a childbirth preparation course at one of Singapore’s leading centres starts from S$550 per couple. Factor in the health checks, classes, dietary supplements and prenatal care, these can easily chalk up to S$3,000 or more over a year.
The next step, of course, is childbirth. A caesarean delivery (C-section) at a hospital in Singapore costs almost twice as much as normal birth. For instance, a normal delivery at a public hospital (A-class ward) costs up to S$6,000, while a C-section may reach up to S$10,000, according to Money Kinetics. Prices will vary between public and private hospitals as well.
As your little one grows, planning for their day care or preschool needs is probably next on the cards. The reality is, preschools don’t come cheap. According to the Early Childhood Development Agency, you can expect to pay up to S$800 per month for full-day childcare and S$1,400 for full-day infant care at government-supported centres.
The good news is our primary and secondary school fees are subsidised for Singapore citizens. Primary school fees cost an average of S$13 per month and S$25 for secondary schools. International schools, on the other hand, cost exponentially more. The annual tuition fee for elementary-level children ranges from $17,000 (+GST) at Invictus International School to $37,594 at Stamford American International School.
As your child enters the primary school years, enrichment classes such as music lessons to martial arts or tuition become another financial consideration. You may want to invest in beginner ballet lessons, which start at $97 a month at one popular dance academy. If tuition is important, a single session at one leading centre starts at $92. Research by Value Champion found the monthly cost for a subject such as music, sports and dance at private enrichment centres clocks in at S$130 on average. This amounts to almost S$1,600 per year.
Once your child reaches tertiary level, their preferred pre-university institute will make a difference. The annual fees for citizens are as follows: junior college (S$400), Institute of Technical Education (S$625) and polytechnic (S$3,000) respectively for citizens. Next comes the big one — university fees. The annual tuition fee alone at NUS can scale up to S$29,000, depending on your child’s major. An overseas education often costs considerably more, plus living expenses do snowball.
Education and enrichment is a significant consideration, but make room for the good times. Recreational costs can be substantial, however, such as your family’s yearly getaway. A package tour to Central Europe can set you back about S$10,000 for a family of three. For big days out closer to home, an annual pass to Universal Studios Singapore for two adults and two kids is $732.
All things considered, raising a child to adulthood can ring up a six-figure sum. With that in mind, how do you balance your financial goals while securing your child’s future? Lena Teoh, Chief Investment Officer at Prudential, chimes in with some insightful advice for new parents and it starts with planning for the future.
“It is important for new parents to plan their finances before their little one arrives. Many procrastinate on the need to plan early and the longer one waits, the more difficult it is to achieve one’s goals. Start putting some serious thought behind your family’s financial and insurance plans in advance. This will give you time and space to focus on more important things — like enjoying time with your newborn or children.”
Besides saving for the future, it is critical for new parents to assess their monthly expenditure — this is the first step, and perhaps most effective of money saving tips. Having a child in the equation means your living and household expenses will escalate dramatically.
“Being new at parenting is a big responsibility, financially and otherwise. Controlling your budget and understanding where your money goes enables you to prioritise, eliminate or reduce unnecessary expenses and focus on what is important. Every ongoing obligation that you can eliminate will help free up more money each month for you and your family,” says Teoh.
Compensating for life’s curve balls is another vital consideration. “Unexpected expenses such as a car repairs or medical bills can strain anyone’s finances. A financial plan puts you in control so you stay on track regardless of what life throws at you. Save and invest in financial solutions tailored to meet your objectives,” she adds.
For the uninitiated, investing can be a daunting prospect given the risks and wide variety of assets involved, such as cash, bonds, equities, unit trusts and so forth. This begs the question — where do you go from here?
“Beginners can start with simple investments, then expand on your portfolio incrementally by taking on greater or lesser risk depending on your investment goals. It is possible to undertake the basics of financial planning on your own. That said, the benefits of receiving advice from a qualified and trusted financial consultant outweighs the former significantly. You can be confident that a personalised plan will be developed to cater for your present circumstances,” Teoh advises.
Tags: Retirement, Health, Wealth
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