By Lee Shou Yin
It’s true, having a baby will require more money, but the process of financial planning is actually much easier than you think. The secret to having enough does not lie with how much you can save or earn, but the right mindset and attitude towards money. Two young mums share their views on how budget wisely and positively for a baby.
1. Budget with a long-term view in mind
Raising a child is a long-term process. Likewise, you need to adopt the same mentality when it comes to budgeting for your child’s needs. As children grow up, they will have different needs along the way – toys, education, clothes, shoes, furniture and so on.
By bearing in mind that your family budget will fluctuate with your changing needs, you can learn to adjust the budget ahead of time to ensure you have enough for your family.
Start off with an initial plan for the most immediate needs: prenatal, delivery and postnatal expenses. Then, as your child gets a little older, focus more efforts on saving up for his or her education needs as he or she prepares to enters nursery or kindergarten.
When you break down the budgeting and saving plans into smaller bite sizes, any lifestyle changes you have to make will also be a lot less overwhelming, both psychologically and financially.
For Michelle Lim, 30, putting aside money for her 3-year-old daughter has become a habit.
“Budgeting for baby is not a one-off process, but a concerted and constant effort to make adjustments to your lifestyle. Sure, you can still have your steak dinners, but you may need to have it less often. It shouldn't be too painful knowing that it all goes into baby's budget at the end of the month.”
2. Small savings go a long way
Smart mums make it a point to spend wisely, because by saving a dollar here and a cent there, you can stretch your wallet a lot more than you think.
For stay-home mum Chew Ailin, 27, quitting her job to care for her son and twin daughters meant that the family had to live on her husband’s income.
To reduce unnecessary expenses, Ailin makes it a point to take all their meals at home and to cut down on shopping. She also saves by stocking up on groceries and daily necessities, such as diapers whenever they are on sale.
Like many smart couples, Ailin also knows not to spend on items that children will outgrow quickly and be willing to accept help when offered.
“Almost all our children's clothes, toys and baby gear are either gifts or hand-me-downs, which have been very helpful given the rate babies outgrow their clothes and lose interest in various toys, so we have not had to spend very much on these things.”
3. Cut back, not eliminate spending on the things you love
Many parents-to-be recognise that they need to change their spending habits and start focusing on their needs, rather than their wants, if they intend to have a baby. The hard part is putting this into practice.
The truth is, you don’t have to suffer or deprive yourself of the things you love in order to plan for a baby. (Unless the things you love are extremely pricey you’d need to hold two jobs / run up huge debts / strike a lottery in order to get them.)
The trick is moderation. Instead of eliminating manicures, cut back on the number of sessions you go for or get a DIY manicure kit to pamper yourself at home. That way, you can indulge in what you love and still remain on track with your savings plan.
A self-confessed foodie, Michelle admits she has had to make an extra effort to cut down on expensive meals so that she and her husband will have more savings at the end of the month.
Says Michelle, “Spending on food is actually less noticeable compared to splurging on the occasional big ticket item. You just have to spend $5 more on every meal and by the end of the month you would have spent $300 with nothing to show for it.”
Her advice for parents who find it hard to cut back on the things they love? The willingness to try and a never-give-up spirit.
“For me, a food lover whose greatest ‘vice’ is food rather than branded stuff, it actually requires more discipline (to spend less on meals). I am still adjusting!” she adds with a laugh.
4. Plan ahead and live within your means
When it comes to budgeting and planning to start a family, you must always save or invest ahead for a rainy day.
But more importantly, you should recognise that when it comes to money, it is not how much you have, but how you use it. No matter how much you have in your bank account, you can save yourself plenty of heartaches if you learn from mistakes and live within your means.
For Michelle, a near complication during her pregnancy proved to be an expensive lesson.
“On the eighth month of my pregnancy, I almost went into premature delivery, and had to be warded for two nights to stabilise the condition. The bill came up to more than $2000 and I need not have spent that money if I had been covered by hospitalisation policies. So we learnt a lesson as a result. ”
After her delivery, Michelle immediately took up two policies for her daughter when the little one was just a few months old – one to cover hospitalisation bills, the other to cover the general health and well-being of the child.
With three children to feed and only one source of income from her husband, Ailin has also learnt an important lesson in managing family finances –it’s not about getting more money but learning to make adjustments and cope with what you have.
“We are constantly bombarded with the notion that we need to have more, more of everything. There seems to be no end to what we ‘need’,” says Ailin, before concluding, “I think what is more important is learning to be contented and willing to work with what we do have. It may require some budget and lifestyle changes but the joys of having children more than make up for these ‘sacrifices’.”