Start your parenthood journey on a financially sound foot by taking these financial steps:
Maybe you and your partner have just welcomed your newborn into the world or are thinking of starting a family. The emotional rewards of having your own family is indeed priceless. However, the financial load of child raising isn’t light. Here are 4 financial habits to adopt to help you stay on the right track.
Step 1. Establish two financial safety nets with 3 to 6 months worth of your current income
If you’re planning ahead to expand the number of occupants in your family home, make sure that a SOS family fund is also in the works. If you haven’t even started stashing money away, put away at least 20% of your monthly income and other income additions into it. So yes, don’t spend away your yearly bonus; they count, too!
This financial safety net should help you and your partner cover expenses and tide your family over in the event of unforeseen events, such as sudden change in surgery plans and expenses for pregnancy complications. The two of you should also work towards building a second back-up fund with another three to six months worth of your income to cushion the impact of child-related emergencies.
Step 2. Contribute regularly to your child’s Child Development Account
Under the Baby Bonus scheme, the government will match dollar-for-dollar your contributions to a special co-savings scheme that is opened when your child is born, known as the Child Development Account (CDA). CDA savings can be used to pay for your child’s educational and healthcare expenses.
You don’t have to dump all your available funds in there at one go either. You can take up to 12 years to contribute to the CDA. Note that these deposits will be matched up to S$6,000 for your first and second child and this amount will be increased if you have more children.
Step 3. Pick a Child Development Account bank that suits your family’s lifestyle
It’s fantastic to know you’ve got this support to relieve some of the financial stress of childrearing, but you can also go some way in saving money when you make a decision which bank to open the CDA with. There are 3 CDA banks in Singapore that grant different discounts when you sign up with them. At this time, the three banks are OCBC Bank, POSB/DBS and UOB Bank.
Take a look at which merchant discounts fit your family lifestyle or what you are planning for your child. For example, OCBC offers a Baby Bonus card that allows you to enjoy discounts on activities related to education, such as 50% off preschool materials and 10% off lesson fees when you enroll your kid in Chinese enrichment programmes at the Confucius Institute at NTU. Or with the POSB Baby Bonus NETS Card that comes with the POSB Smiley CDA account, you can get discounted beauty and massage treatment packages to take the edge off as a frazzled new parent.
Step 4. Invest in annual passes and membership cards to save money on family activities
As your child grows older, it’s inevitable that you and your partner will be spending some money on family treats and entertainment too. Purchasing the right cards and passes can save you money on these activities, especially if you’re likely to make return trips to beloved attractions and enjoy their comfortable amenities.
One that is worth the initial purchase is the RWS Universal Studios annual membership. Your child will get to expend his or her boundless energy going on rides and rejoicing in performances there and will probably clamour to return soon enough. As a member, you will get 10% off in-park retail and F&B outlets, all the cheaper to feed hungry children and tired partners. Other benefits include getting $5 off stroller rental, discounts for Universal Studios Singapore events and priority entry to attractions.
The Singapore Zoo also ranks highly for family entertainment. No child tires of animals and a zoo trip provides an opportunity for your child to learn more about the biodiversity in the world around him or her and the importance of conservation. If you foresee repeat trips to the zoo, it’s value-for-money to get a family membership and be Friends of the Singapore Zoo to enjoy benefits such as complimentary tram rides on weekdays and 10% discounts at several F&B outlets at all Wildlife Reserves Singapore parks.
This article first appeared on BankBazaar.sg.
BankBazaar.sg is a leading online marketplace in Singapore that helps consumers compare and apply for a credit card, personal loan, home loan, car loan and insurance.