Having a baby versus remaining DINKs (double-income-no-kids) – has it been a dilemma? How do we compare these two choices in life? Can they even be compared? In the past, our parents did not think so hard. Then, it was a natural progression after the wedding to start a family.

Fast forward to the present day. With competing lifestyle and career choices, having a baby may not be a natural milestone after all. Couples may engage in cost-benefit analysis, mindful of the trade-offs that parenthood entails.


In a documentary entitled "Love and Marriage: a 20th Century Romance" which featured couples sharing their personal stories on marriage and starting a family in Britain in the 1900s, the ladies' views were very different. Stepping into the workforce and having a career was never a preference. Getting married and starting a family was considered appealing.


Another segment of the documentary was about a poor family who did not have a bathroom at home. Once a week, a tub would be dragged into the narrow kitchen where the children and adults would take turns to bathe. The narrator recounted that by the time it was his turn, the water was lukewarm and there was a layer of scum on the surface. Life was very hard but in his words, they were determined to be happy together.


It showed that in the early 20th century, financial constraints did not stop couples from having children. Families learn to make do with what they had and the joy of children could not be measured in dollars and cents


Making financial adjustments


The million-dollar question is how much is needed to raise a child from baby till he finishes his education. Ms Brenda Tan, Financial Services Director of Brenda Tan and Associates representing Prudential Assurance Company Singapore (Pte) Ltd, gives an estimate of about S$300,000 to S$600,000.


“Do bear in mind that the costs of raising a child can be radically different from one parent to another. While it is natural for parents to want the best for their child, learn to manage your expectations. It is easy to succumb to temptations to buy the best baby stuff in the market, or enroll Junior in numerous enrichment classes. What children really crave for is your love and time, which also happens to be the key ingredients for a child’s emotional and intellectual development,” she said.


In addition, there is no need to fork out the entire sum of money in a single day when baby arrives. Instead, the recurrent costs are spread out which makes it more manageable.


If anything, having a child can make us more money-savvy. We learn to manage our expenses more prudently, and become more professional at sniffing out bargains for baby items, toiletries, groceries and products to pamper ourselves with too.


While staying as DINKs may mean more freedom and money to spend on individual wants, they have to be measured against what a child can bring. Children equate joy, a continuation of us from a loving marriage, and allows us to re-live our childhood. Considering this, the parenthood decision may not be a tough one after all. It is possible to live within our means with baby on board. We just need to manage our expectations like everything else in life.


Ms Tan shares a list of useful financial tips:


> Review your finances (income & expenditure, assets & liabilities)
• Make financial adjustments so that you can fund this new goal – having a baby!


> Minimise Debt
• Do not over commit in housing and car loans as high debt obligations limit your saving ability and have severe impact on your other financial goals.

• Pay your credit card bills on time.


> Reduce your Expenditure
• Track your expenses diligently.
• Review your discretionary expenses (eg. fine dining, entertainment, shopping, etc) and decide how much to cut back (not totally eliminate).
• Set a budget to control your monthly expenses


> Increase your Saving
• Set a target on how much you want to save every month and gradually increase this amount. Ask – how much more can I save?
• Your total yearly savings can be systematically allocated to the following purposes -
a) Building an Emergency fund of about 6 months of your monthly expenses
b) Setting aside funds on a regular basis to acquire your personal Life Insurance and to save/invest towards your retirement goal.
c) Starting a regular saving plan to build up a Baby account to fund child-related expenses & to save/invest towards your child’s tertiary education goal.


> Prudent Buying
• Make a list of the items you intend to buy, and prioritise them.
• Buy necessities, not the frills, keeping in mind that children outgrow them very quickly especially for clothes, toys, books.
• Look for bargains and stock up non-perishables during sale, eg. baby diapers, baby wipes.
Evaluate options. Is branded really better? Do you need to buy premium items all the time? Keep in mind the “Value for money” concept.
• Some things can wait as your child will need it at later stage, eg. a highchair.
• Some things can be done without, eg. a baby-walker.
• Go for versatile items to give you extra mileage, eg. a steady cot that can be converted to a toddler bed, or a toddler table cum chair that can be converted to an easel.


> Consider other Alternatives
Gifts – you are likely to receive gifts/hampers from relatives and friends when your baby is born. Do not buy too many baby things for the first few months, like clothes, toys, feeding items, as you are likely to end up with duplicates that you won’t need.
Hand-me-downs that are in good condition is not a bad idea. For example, maternity clothes, car seat, pram, baby outfits, toys.
Borrow. Borrow books from the library instead of buying them.
Make your own. Be creative.
a) Instead of buying baby food in jars and packets, invest in a steam-cum-blend food processer to make your own fresh food for your baby.
b) Make your own toys by using what is available at home.
c) Teach your toddler how to read by making your own flash cards.
d) Have fun with your children doing craftwork by using scraps while teaching them about different themes like shapes, colours, etc.
e) Google to get ideas


> Insurance is Essential
• Make sure you are adequately insured so that unforeseen circumstances (eg. illness, accidents, disability, etc) do not drain your personal savings/resources accumulated for other financial goals.
• The following types of Insurance for your child can help cover some costs:
a) Medical insurance from some insurance companies help cover expectant mothers and babies from pregnancy through to childbirth.
b) Medical insurance from Medisave Approved Integrated Shield plan to cover expenses incurred in the event of hospitalisation and surgery for the child.
c) Endowment plans to save for your child’s future University education costs, which is probably the largest cost item especially if it is an overseas education.


> Start Early
• Whether it is to save, invest, or get insured, always start early. You have more time to reach your financial goal.


Maybe Baby would like to thank Ms Brenda Tan, Financial Services Director of Brenda Tan and Associates representing Prudential Assurance Company Singapore (Pte) Ltd for her contribution to the article.

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