How much does it cost to raise a child from infancy to 21 years of age? $200,000? $360,000? $1,000,000?
It seems that every financial expert in the country has a number in their minds, as do consumers who have thought this through on their own. Whatever the number is, what’s more important is how the number is derived – which is a financial planning exercise in itself. We will leave your numbers to the fruitful financial planning sessions you will have with your Financial Consultant, so for now, we will go straight to some tips on how to spend wisely when raising your child in Singapore.
Tip 1: Ask Yourself, “Do You Really Need It?”
It is true that a baby needs many things, but if you take a closer look at baby products, you’d realise there are several products, such as maternity pillows and branded baby clothes, which are not necessary yet expensive. In fact, according to an article by entrepreneur Mr Ivan Guan, spending too much on their children is one of the biggest regrets retirees have.
“…. If we had invested the money instead, we would be able to give her [the child] more financial support today,” said one of the retirees featured in Ivan’s article.
Make a few tweaks in your life to help you save some money for your child. You could buy from second hand stores, let your child wear and use hand-me- downs, and shop online for discounts. However, do be discerning, as focusing on price alone might cause you to leave out important things, such as a quality baby seat or baby-friendly bath products.
Tip 2: Get an Education Endowment Plan and Other Insurance
Many parents in Singapore opt for an education endowment plan because of its obvious benefits. As admirable as that is, the truth is that with proper financial planning, parents can give their child a lot more than just a fine education in the future.
Taking the time to understand the market and making the effort to save in a disciplined manner can prove to be beneficial as you would have to commit decades to your insurance policy and let your investments ride out market corrections to reap their benefits. That being said, the sheer amount of investment products and insurance products in the market makes the task difficult. As such, you may wish to engage an independent financial advisory firm to help you narrow down all the products in the market so that you can use your money in smarter ways.
Bonus Tip: Spend LOADS of Time with Your Child
Babysitters, tutors, nursery…how much is enough? How much is too much? The decision differs across families. Theoretically, by doing away with all these external help, you’d get to bond with your child and reduce your expenses all at the same time. However, we are also aware that such help has its practical side. In getting such external help, do keep in mind that every minute your child spends with them is a minute your child is not spending with you.
Parents, do you agree with this list? Is there anything and/or experience you’d like to share with our readers? Comment below and let us know!
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Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs.