So, you’ve decided that it’s time to fill up the spare rooms in that five-room flat you and your spouse bought and expand the family.
Well, you’ve got a lot to talk about before bringing a baby into the world—and not just whether Junior will be outfitted in blue, pink or a more gender-neutral colour.
Here are five major expenses you should discuss with your spouse when doing your sums to determine the affordability of a baby.
1. Hospital and other medical fees
Unless you plan to get your mother-in-law to stand in as a midwife, your baby is going to be delivered in a hospital. And hospitals in Singapore cost a great deal of money.
Discuss with your spouse which hospital you wish to use, as well as the type of room needed. A natural birth with epidural can cost anywhere between $3,500 and $12,000, and if a caesarian is needed you must be prepared to pay more.
The type of room and whether you use a private or public hospital will have the biggest impact on cost. Never assume your spouse is okay with sharing a room with others, or that the stricter visiting hours at public hospitals won’t make it hard for you to see each other.
2. Budget for baby products
If you think looking after a baby isn’t going to be that expensive because babies don’t eat as much as adults, think again.
There’s a ton of baby products you’re going to have to buy, from breast pumps and milk powder to strollers and cots. Then there are the Elsa plush toys and educational DVDs. It would be best to set a budget for the baby products instead of giving yourselves free rein to buy anything that would look cute in Junior’s new room.
Set a pre-birth budget so you don’t go overboard when preparing baby’s new room and buying the first set of necessities. Then work out a monthly budget for toys, clothes and educational materials. You may not want to scrimp on your own kid, but making prudent financial decisions is part of being a good parent, too.
3. Approach to the kid’s education and extra-curriculars
You want to know just how kiasu of a parent your spouse intends to be so you can gauge your financial readiness to have a child.
Some parents want to start enrolling their kids in pre-school preparation classes when they turn two, as well as give the child an education in anything from ballet and piano to competitive chess and coding. You’ll need to factor in the costs of these classes into your budget.
You also want to discuss how extreme you will be about tuition. Will your kid be placed in tuition when he’s in kindergarten, or will you refrain from making him attend any tuition at all unless he starts performing really horribly at school?
4. Care arrangements for the child and how it will impact your careers
Maternity leave isn’t forever, and if you intend to remain a dual-income household you will have to find somebody to look after your child when you go back to work after childbirth.
The first port of call tends to be in-laws. But don’t assume either of your parents will want to look after the child full-time—many elderly people (justifiably) want to enjoy their retirement. And if you or your spouse’s siblings have beat you to it and already hoisted their kids on the parents, they may be less inclined to want to look after yours, too.
Childcare is expensive, even with the current childcare subsidies, and you’ll also have to face the challenge of trying to get a spot at a childcare centre that’s not just reasonably priced, but also conveniently located. Other than factoring in the additional cost, you’ll have to work out details such as who will be free to drop off and pick up the child from the centre.
It’s also worthwhile discussing the impact children will have on your career. Other than one of you dropping out of the workforce or working part-time during the child’s formative years, there is also the option of one or both of you changing career tracks or taking on a less demanding job.
For instance, if your spouse is an accountant who is stuck at the office till 10pm every day, it’s totally understandable if he or she wants to find a new job in order to avoid being a phantom parent.
5. How all of the above expenses fit into your budget
You might be surprised at how many young parents fail to budget for the added expenses of having children, and end up falling into credit card debt. It happens more often than you think.
To avoid being another statistic, crunch some numbers and figure out whether you can afford to have a child and still meet your retirement goals while maintaining your current standard of living.
Chances are, something will have to change—you might have to cut back in some areas (if you want your baby to wear Burberry you might have to be content with wearing Cotton On yourself) or, alternatively, accept that your own retirement plans will have to change if you hadn’t factored in the cost of kids before (you might simply have to work longer, or look for an alternative income stream).
What are the most important financial factors to consider when having a child? Tell us in the comments!