Yes, raising children can be expensive, and if you wait till you feel completely financially ready, you may never realise that bundle of joy.

Here are 5 steps to help you make room in your budget for baby – and prevent any financial freak out.


1. My Expenses!

"Don’t buy the Audi...Drive the Honda…and have kids!" ~ Suthesh, Father of 2 children below 6

To manage your finances wisely, Mr Paul See, senior financial services director of Professional Investment Advisory Services (PIAS) recommends using the tips below to compartmentalise your income into the different sections.

  • Essential Expenditure – Set aside 55% of your income for necessities such as insurance, transport, food, lodging and housing loan repayment scheme for couples who have already purchased a house.
  • Serviceable Debt – As far as possible, do not incur more than 35%. This means your housing loan repayment scheme should not be more than 35% of your income.
  • Purpose Fund – Put aside 10% of your income into this fund to kick-start your next goal in life – for example, planning for baby.
  • Financial Freedom Fund – The remaining 10% goes towards planning for your retirement or support a charity.


2. The Medical Expenses!

Do you know that most infant vaccinations are free in Polyclinics for citizen children?  Parents and parents-to-be can tap on these schemes:

MediSave Maternity Package

The MediSave withdrawal limit for pre-delivery expenses is $900 for mothers who have delivered on or after 24 March 2016.

You can make MediSave claims for pre-delivery expenses such as pre-natal consultations, ultrasound scans, tests and medications, as well as for delivery expenses (on top of the MediSave Withdrawal Limits for delivery expenses), incurred at both public and private healthcare institutions.

You can also withdraw up to $750 - $2,150 from your MediSave for delivery fees, depending on the type of delivery procedure.

For more information, click here

MediSave Grant for Newborns

All Singapore Citizen newborns born on or after 1 January 2015 qualify for the enhanced $4,000 MediSave Grant for Newborns. A CPF MediSave account will be opened for each newborn, and the grant will be credited automatically.

The grant helps defray your baby’s healthcare expenses, such as MediShield Life premiums, recommended childhood vaccinations, hospitalisation, and approved outpatient treatments.

Those born on or after 26 August 2012, but before 1 January 2015, qualify for a grant of $3,000.

For more information, click here.


3. The Cost of Raising the Baby!

“Planning for baby doesn’t mean setting aside huge chunks of money at one go, but devoting a little each month to the family fund.” ~ Mr Paul See, Senior Financial Services Director, PIAS

There are grants and subsidies to help defray the cost of raising your child. The Baby Bonus Scheme includes a cash gift, Child Development Account (CDA) First Step grant and Government matching to savings in your child’s CDA.

To also save time for busy parents, it will only take 5-10 minutes to complete an online form to join the scheme which may also be submitted as early as two months before your child is born (Estimated Date of Delivery) or after the birth registration.

Enhanced Baby Bonus Cash Gift

Singapore Citizen children born on or after 1 January 2015 will get a Cash Gift (inclusive of the Baby Bonus Plus) of:

Baby Bonus CDA

The Baby Bonus CDA is a co-savings scheme for children, where savings deposited by parents into a special savings account called the CDA are matched dollar-for-dollar by the Government, up to a specified cap depending on your child’s birth order.

To help more parents benefit from support provided by the CDA, eligible Singapore Citizen children born on or after 24 March 2016 will receive the CDA First Step. This is an initial balance of $3,000 (which comes from the Government's existing contribution caps) given without you having to save in the CDA first.

For more information on Baby Bonus and to check eligibility, click here.

Subsidies for Centre-Based Infant Care and Childcare

To help make infant and childcare services more affordable, parents with Singapore Citizen children enrolled in licensed childcare centres are eligible for a Basic Subsidy of up to $600 for full-day infant care and up to $300 for full-day childcare.

On top of the Basic Subsidy, families with working mothers, and with gross monthly household incomes of $7,500 and below, are eligible for an Additional Subsidy, with lower income families receiving more.

From January 2020, these subsidies will be enhanced. The Government will raise the gross monthly household income ceiling for Additional Subsidy to $12,000 and increase the subsidy amounts across all qualifying income tiers.

For more information, click here.


4. My Baby will Look Cute in That!

Baby shopping before delivery, ah, the temptation to buy that cute teddy bear rompers that cost $50 over a $20 for three ordinary rompers can be hard to resist for some, what more with online shopping being so accessible these days.

But, think about it, babies grow fast, and the chances of these rompers being used only once or forgetting to remove it from the packaging is highly possible. Why? Because, you don’t want to soil the expensive rompers or there is no chance of dressing baby up to go out because mummy was recovering from confinement.

Babies do not know the value of branded clothes. So consider accepting hand-me-downs or purchasing pre-owned clothes to even renting (especially if you are planning to do a photoshoot for baby) are ways to help keep cost down.


5. That’s a Relief!

Parents are eligible to claim the Parenthood Tax Rebate (PTR)* of $5,000 for their first child, $10,000 for the second child, and $20,000 for the third and each subsequent child.

Both the father and mother may share the PTR to offset their income tax payable. Any unutilised rebate can be used to offset the income tax payable in subsequent years until the rebate is fully utilised.

Working mothers can claim the Working Mother’s Child Relief (WMCR)* at 15% of their earned income for the first child, 20% for the second, and 25% per child for all subsequent children, with a maximum cap at 100% of their earned income.

For more information, click here.

“Parenting is a gift, not a liability, and you cannot just weigh the pros and cons of starting a family on financial terms. Once you become a parent, the joy of caring for a “mini-me” will supersede all the other considerations.” ~ Andy, Father of 5-year-old AJ

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