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Learning how to calculate and adjust your family budget is the first step in becoming money-savvy parents. Assuming your income remains constant, you will need to learn how to reallocate resources away from personal expenses, and towards baby expenses.

Below is a step-by-step approach to help get you started:


Step 1: Create a budget


Start by drafting an excel sheet to track your family income and expenses. Be realistic about it and if possible, gather your bills, receipts, bank statements, loan installments and so on to get a clearer picture of how much you spend every month.


For items that are paid on a yearly or quarterly basis (e.g. insurance premiums), you can split the amount into a monthly figure for ease of calculation.


Step 2: Get out of debt


If you are in the habit of owing credit card bills, you should start paying them in full every month instead of allowing the interest to accumulate. Start by setting realistic goals to manage your debt and allocating a sum of money every month to meet outstanding payments.


Step 3: Lower your taxes


Take advantage of tax relief and rebates that you are entitled to as parents.


For example, first-time parents can claim baby bonuses of $4,000 cash and up to $6,000 in co-savings for the baby. What this means is that the government will match dollar-for-dollar the amount of savings parents contribute to the child’s Child Development Account (CDA). First-time mums can also claim 15% tax relief off their earned income.


Visit www.family.gov.sg/MnP to find out more about the financial help schemes for parents.


Step 4: Plan for emergencies


Start putting money into a family emergency fund to deal with crises and unexpected expenses. This can be in the form of insurance policies to help protect your family should something happen to you or your spouse.


Step 5: Control spending


Identify where the bulk of your income goes to. Is it shopping, dining out, or going to the movies? Take for example, if dining out is costing you too much; you should consider cooking at home or dining at cheaper places, such as coffee shops and food centres.


Ask yourself if these expenses are truly necessary - can they be eliminated or reduced? You don’t have to deprive yourself of your favourite buys, but if you can do without it, or make do with a cheaper option, you may want to reconsider your purchase.

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