Bringing home a new baby is one of life’s greatest joys. But don’t let this momentous milestone derail the decisions you make about money.

As a new parent, it’s up to you to make the right choices to protect your child’s future, and your own. Avoid potential financial catastrophe by forgoing the following ten money mistakes new parents commonly make.

Mistake #1: Failing to budget

The Asian Parent blog estimates that the average cost of raising a child from infancy to age 21 is roughly SGD $340,000. That’s a big investment!

Child-rearing expenses range from the diapers your infant will wear to the international schools you want to send them to. But unless you understand exactly how much each parent is bringing in financially, you won’t be able to make smart decisions about what you can afford for your child.

Ideally, start this process before your child is born. But if your bundle of joy is here and you don’t yet have a budget, set aside a few hours to write out your average income and expenses. This will tell you how much is left over and how much can be spent on your child.

Mistake #2: Forgoing date nights

If the numbers in the budget you just created don’t look as good as you’d hoped they would, you may feel inclined to cut things like meals out or date nights with your partner in order to save money.

Keep in mind, however, that new babies can put a tremendous strain on your relationship. To raise a happy child, you need to model healthy behaviours as parents. Instead of forgoing quality time spent with your partner entirely, opt for less expensive outings – such as a picnic or a feast at your favourite local eatery.

Mistake #3: Overspending on the first child

As a new parent, it can be difficult to determine which items are necessary to purchase for a child and which ones can be skipped. At the same time, you may be feeling pressure to commemorate every special moment with a party or reward.

If these expenses fit into your budget, go ahead and indulge. But be careful about feeling as if you must spend more on your child than you have available. Instead, look for inexpensive ways to celebrate. The memories you make together are important – not the things you buy.

Mistake #4: Buying everything new

One specific way how new parents often overspend is by purchasing everything new – from their baby’s clothing to the nursery room furniture and more.

In the case of clothing, keep in mind that babies go through sizes quickly, while more active older children can easily turn new garments into rags. Instead of purchasing all new items, shop second-hand or arrange swaps with other families in your area. The money you save can be reinvested into much more important expenditures, such as education.

Mistake #5: Not buying in bulk

Although you can usually save quite a bit by moderating your spending on your first child and shopping second-hand, there are some items you’ll need to buy new (like diapers and baby wipes).

When you can’t get around an expense, try to minimise your costs by buying in bulk. According to, “You know that you will need these items for at least a few months, so if you find deals for these items if you purchase them in bulk, go for it! Check out online deals, advertisements in magazines or warehouse sales for special offers.”

Mistake #6: Not taking advantage of government grants

As part of the Marriage and Parenthood Package, new families may be eligible for the Baby Bonus grant, which includes, “a cash gift, CDA First Step grant and Government matching to savings in the child’s CDA.”

Because the program requires that families apply for the grant, many skip the process, forgoing free resources made available by the government. However, failing to claim the money that’s rightfully yours is a mistake. Instead, take advantage of provisions that allow you to apply up to two months before your child’s estimated delivery date.

Mistake #7: Not purchasing appropriate health insurance cover

Your employee health insurance cover may provide for some of your child’s medical expenses, but it’s important to read the fine print. Although expenses associated with delivery and routine immunisations are commonly covered, you may find that illnesses, broken bones or other issues requiring hospitalisation are not.

The time to learn what is and isn’t covered is not when you’re holding a child who needs medical care. Instead, review your policy ahead of time so that you can purchase the appropriate cover needed to fill any gaps you find.

Mistake #8: Failing to protect their families with life insurance

As you’re reviewing your health insurance cover, take a look at your life insurance policies on hand.

As a new parent, life insurance is critical. What would happen to your child if you were to become disabled or die unexpectedly? Life insurance – whether a term or universal policy – provides your family a measure of comfort in knowing that their financial needs will be taken care of should you be unable to earn an income in the future.

Mistake #9: Not saving for future education

All parents want what’s best for their children. For many families, that means the best possible education, whether in Singapore or at popular international schools.

Regardless of the route you choose, your child’s education will come with expenses. Starting to save as early as possible will take financial questions out of the equation when it comes to selecting the best schools and educational opportunities.

Mistake #10: Jeopardising their own retirement savings

That said, while saving for your child’s education is important, it shouldn’t come at the cost of your own financial future.

It may seem as if your retirement is decades away, and therefore less critical than your child’s immediate education needs. However, keep in mind that it is the power of compounding interest that makes saving early for retirement so powerful. The less money you save while young, the more difficult it will be to accumulate the funds you need to cover your expenses in your later years.

Remember, there are many vehicles to help pay for education, such as grants or scholarships. But if you enter your retirement years unable to work, there will be far fewer sources of income you can tap to meet your financial needs.

Planning a Financially Smart Future for Your Growing Family

This list isn’t comprehensive. Avoiding these mistakes is important, but as a new parent, you’re apt to make plenty of others along the way as you learn how to stay financially smart while balancing the new demands of parenthood.

Don’t beat yourself up over any perceived financial failures. Instead, recommit to smart spending that focuses on sticking to a budget and protecting your family with proper insurance and savings.