Expecting your first baby is welcoming a bundle of joy who is about to see the outside world; however it is not just about baby clothes, toys and room that you have to plan, with all the joy and excitement do not forget to plan your finances. Having a baby brings a large impact on your budget, be ready. Here are 10 tips to be financially prepared.
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- Sign up for the Baby Bonus Scheme– Singapore government wants to support the parents for raising their children, thus the Child Development Co-Savings (Baby Bonus) Scheme was created under the Marriage and Parenthood Package. This includes the cash gift and CDA. This includes unwed single parents in the revised version of 2016.
- Cash Gift
For children born on or after 1 January 2015
- Child Development Account is a special savings account for children which automatically open once a parent joins the scheme. Parents can select a bank (OCBC Bank, DBS Bank or UOB Bank) on where they can open an account. Banks are not the same; each one offers a different promo. Take time to check which one will fit you best.
There are two ways around CDA:
- Save after July 1st of 2016 and the grant will automatically be saved on the account or
- Save before July 1st of 2016 and your child will not receive CDA First Step but will receive the current dollar-for-dollar matching.
Parents can save until the 31st of December of their child’s 12th year. The government with match the dollar to dollar savings on the following months until the cap has been reached based on the child’s order of birth.
Your child’s CDA funds can be used for medical and educational expenses in Baby Bonus Approved Institutions (AIs) such as:
- Child care centres, kindergartens and special education schools
- Providers of early intervention programmes
- Hospitals and clinics, Pharmacies and Optical shops
- Providers of Assistive technology devices
- Start shopping to consider which ones should be bought brand new and which ones could be second-handed. As for furniture such as cribs, high chair and strollers, buy them firsthand because damaged ones can cause injuries. You can download apps such as Bakipa to see some options on hand me downs. Try comparing prices with online shops and real shops. Take your time, it will yield saved money.
- Have an SOS Baby Fund starting from the point you plan to have a baby or from the time you discovered you are expecting. Setting goals may vary, but to be safe save up for three to six months’ worth of family expenses. It is also better to pay your debts now while you are saving. You might be doing fine now, but when the baby gets out, your finances will totally change.
To give you an idea, you must prepare these essentials:
- Portable bed or playpen
- Crib or cradle
- Moisture-proof mattress pads (1-3)
- sheets (2-4)
- blankets (3+)
- Baby monitor
- Diaper pail/bin
- Infant bathtub
- Nightlight or lamp
- Car seat
- Laundry detergent for babies or those with sensitive skin
- Nasal aspirator
- Infant pain reliever/fever reducer
- Feeding bottles
- Baby formula
- Bottle cleaning brush
- Bottle sanitizer
- Baby clothes that gets small in just a few weeks because the baby grows fast.
- Talk to your doctor on how you prefer to be billed through the nine months of pregnancy. Will it be monthly or with a flat rate. Weigh which option will save you more money.
- Create money management habits. Create a budget including your fixed expenses, your savings contribution, your flexible expenses, and then you money for leisure. Check where you can reduce expenses while still living within your means.
- Get 16 weeks of Government-Paid Maternity. You have a week before your expected date of delivery and 12 weeks after childbirth. Your employer is mandated by law to pay you for the first 8 weeks of maternity leave, pay after that is voluntary. Do not hesitate to ask your HR about it. Government-Paid Maternity Leave offers cash benefits employed for at least 90 days in the 12 months before the birth of your child. You can also have Shared Parental Leave.
- A MediSave account with S$3,000 grant is granted to single parents by the government. Single parents can be unwed, divorced and widowed.
- Medisave (drawn from your CPF) can defray the cost of maternity packages, know your contributions. Check if your chosen hospital is affiliated with Medisave. Also, the amount you can use will depend on your contribution. If you have normal delivery, usually Medisave will deduct $1200 from your expenses on maternity package. If you have other health insurance, talk to your provider on their coverage. Check if the cover some packages you can use.
- Ask family and friends for baby’s accessories for gifts. Don’t forget to make a wish list. Instead of buying stuff that you can get as a gift, you can then save money for your child’s future expenses such as milk formula and diaper. Do not hesitate to ask hand me downs from family and friends who had babies. Clothes and shoes and good second hands, after all your baby can outgrow them in a few weeks.
- Plan your work arrangements so your childbirth won’t affect your work. Talk to your employer before you have your maternity leave about your infant care arrangements. Your working schedule might change since you already have a child to take care of. If you are self-employed, weigh if you can afford an assistant to help you out.
Having a baby can bring a great impact on your expenses. It is important to plan before the baby comes out to avoid future financial problems. You can ask for your family and friends help. However, if there is nowhere to turn to in case of emergency, you can find a legitimate moneylender and check their offered personal loans such as in Cash Mart which offers loans that can best fit you. Cash Mart approves personal loans or payday loans in a day and even offers a 7-day guarantee, making sure that you also get the best customer experience just like you want only the best for your child.
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