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Raising children in Singapore doesn't have to be expensive.

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

 

1. My Expenses!

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 all nationally-recommended childhood vaccinations and developmental screenings are free in Polyclinics and CHAS General Practitioner Clinics for citizen children?  Find out more here!

Parents and parents-to-be can also tap on these schemes:

MediSave Maternity Package

The MediSave withdrawal limit for pre-delivery expenses* is $900 while the withdrawal limit for delivery expenses* is $750 - $2,150 depending on the type of delivery procedure.

Did you know, you can also withdraw up to $450 from your MediSave for each day's stay in the hospital for delivery?

*You can make MediSave claims for pre-delivery expenses such as prenatal 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.

For more information, click here

MediSave Grant for Newborns

All Singapore Citizen newborns qualify for the $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.

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.

Baby Bonus Cash Gift

Singapore Citizen children are eligible for the Baby Bonus Cash Gift in the following amounts:

Baby Bonus CDA

The Baby Bonus Child Development Account (CDA) is a special savings account. Eligible children will receive $3,000 of CDA First Step and every dollar saved into the CDA will receive a dollar matched by the Government, up to a cap depending on the child’s birth order.

To help more parents benefit from support provided by the CDA, Singapore Citizen children are provided with a $3,000 CDA First Step when the CDA is opened. This is given without parents having to save in the CDA first. Parents who continue to save beyond this initial balance will enjoy dollar-for-dollar matching, up to the Government contribution cap in the CDA. Parents can save any time before 31 December of the year their child turns 12 years old.

Good news for parents who wish to have a second child! The Government will double the maximum amount it will match dollar-for-dollar in the CDA of a second child from $3,000 to $6,000, for eligible children born or with EDD from 1 Jan 2021.

Source: www.madeforfamilies.gov.sg/

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 $12,000 and below are eligible for an Additional Subsidy, with lower-income families receiving a higher subsidy. Families with Singaporean children enrolled in kindergarten programmes in an Anchor Operator preschool or MOE Kindergarten are eligible for the Kindergarten Fee Assistance Scheme (KiFAS) if their gross monthly household income is $12,000 and below.

For more information, click here.

Baby Support Grant

The pandemic has not been easy on Singaporeans who are trying to get married and start their families. So to help reassure couples to proceed with their parenthood plans, the Government will provide a one-off Baby Support Grant (BSG) of $3,000, for children born from 1 Oct 2020 to 30 Sep 2022. 

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 $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 them 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 costs 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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